Future Enforcement Research Articles

Unpacking the Digital Markets Act: a milestone ruling against ByteDance and its implications for potential gatekeepers

The General Court of the European Union recently issued the first substantive ruling addressing the interpretation of the EU Digital Markets Act. In that ruling – in Case T-1077/2 ByteDance v. Commission – the General Court endorsed the European Commission’s approach to applying the ‘gatekeeper’ criteria under Article 3(1) of the Digital Markets Act, confirming the Commission’s decision to designate ByteDance as a gatekeeper in respect of its online social networking service, TikTok. This article explains the context in which the dispute between ByteDance and the Commission arose, including the process through which the initial group of gatekeepers was designated. It then goes on to dissect the General Court’s reasoning and comment on its implications for future enforcement of the Digital Markets Act – particularly when it comes to the designation of additional gatekeepers and/or core platform services.

Offence trajectories of young Australian novice drivers

This paper aims to add to the sparse research on patterns of traffic offending in young novice drivers by examining the trajectories of young Australian novices throughout the graduated driving licensing system (GDLS). Data on licensing, crashes and traffic offences for all persons aged under 25 years first licensed from July 2007 to June 2008 in New South Wales were supplied by transport authorities, with follow-up to January 2014. Eight hierarchical categories of offence were defined by seriousness. Total numbers of offences per month were plotted for one year after initial licensure while under supervision (L), after transitions to the first (P1) and second (P2) provisional licence phases and to unrestricted licensure (U). After excluding novices not transiting to P1, 75,470 novices (51.5 % male, 77.7 % 16 years old at L) remained. Of these 63,070 had a year of follow-up after P2 (52.5 % male, 82.3 % 16 years old at L) and 28,861 had a year of follow-up after U (55.5 % males, 91.7 % 16 years old at L), Offences were uncommon under at L but spiked after P1 and again after P2. Omitting GDLS offences there was a small increase after U. Patterns were broadly similar by age at L and time in L. Novices aged at least 18 years at L had the highest offence rates in the learner phase; those aged 17 years at L had the highest rates in P1 and P2. The longer novices spent in the supervised driving phase the lower their subsequent offence rates even allowing for age at P1. Urban or regional residence had little influence on offence rates but lower aggregate socio-economic status as measured by a census-derived index was associated with appreciably higher offence rates. Speeding was the most common offence type; dangerous/negligent driving was common immediately after P1, declining thereafter. These results are in broad agreement with previous research in noting the increase in offending as GDLS restrictions eased. They highlight the need for better understanding of the function of a GDLS in improving the safety of young drivers. They may also inform future enforcement and education policies for novice drivers. For example, rehabilitative interventions should occur coupled with enforcement soon after citation. Visible display of GDLS status would assist their identification.

Shedding Light on the Dark: The Impact of Legal Enforcement on Darknet Transactions

Practice and Policy-Oriented Abstract Law enforcement bodies have largely responded to the increase in darknet activities through site shutdowns, which involve significant investment of policing resources. Despite these efforts, new darknet sites continue to show up after the site takedowns. We offer a new look at this issue by assessing the viability of selectively targeting large drug vendors operating on darknet sites. We find that the arrest of a major drug vendor reduced subsequent transaction levels by 39% and the number of remaining vendors by 56% on Silk Road 2.0. This deterrent effect also spilled over to drug vendors located in countries beyond the prosecutorial jurisdiction of the arrested vendor. We further find that small darknet drug vendors were most deterred by the arrest and vendors selling dangerous drugs were relatively more deterred. Our study findings hold policy-relevant implications to government agencies and law enforcement. Whereas site shutdowns can disrupt these markets momentarily, the selective targeting of large-scale drug vendors should be given serious consideration and used to a broader extent. The design of future enforcement strategies should also account for the finding that darknet markets are made up of both small-scale drug dealers new to the drug trade and large-scale drug syndicates.

Tax enforcement activities: Evidence on the impact of a threat-of-audit letter

As part of their ordinary enforcement activities, tax authorities around the world use letters and other forms of personalised communications to elicit tax compliance at a low cost. The literature shows that the impact of a threat-of-audit letter (TAL) depends critically on the credibility of the letter which, in turn, depends on the information disclosed to the taxpayer. We study a TAL that is credible because it also uses third-party information to target a form of cost manipulation but, at the same time, incentivises alternative forms of cost manipulation by not targeting them. We find that the direct impact on the targeted cost manipulation is stronger than the strategic increase in other costs, and therefore the overall effect of the TAL on taxable income is positive. Our approach can be applied to any letter or enforcement action that reveals information to taxpayers and thus prompts their strategic responses. By observing the taxpayers’ responses along all relevant dimensions, the tax authority can evaluate the impact of the strategy and also obtain valuable information to target future enforcement activities.

E-cigarette and tobacco product use among NYS youth before and after a state-wide vaping flavour restriction policy, 2020–2021

SignificanceReducing youth e-cigarette use is a New York State (NYS) public health priority. In May 2020, a state-wide restriction on flavoured e-cigarettes, except tobacco flavour, was passed. This study examines...

What’s Up, Latin America? Between Competition, Data and Consumer Protection

Abstract There is no doubt as to the growing importance of personal data to companies. Along with this fact, there is an exponential growth of data concentration on the hands of the biggest global technology companies. Regulators around the world are taking action in digital markets, either through legislation or judicial enforcement, to address the implications of data concentration. This article analyzes a true paradigm shift in the collaboration between antitrust, data protection and consumer authorities in handling the case of changes to WhatsApp’s privacy policy in Argentina, Brazil and Chile. We analyze how the institutional arrangements favored (or not) a more connected and integrated role of different authorities in the investigation of abuses of dominant position, which resulted in a stronger message for actors in the digital market. Institutional factors, such as operational and enforcement capabilities, are also analyzed with regard to the ability and effectiveness of the authorities in these countries to intervene. This article attempts to bring critical considerations in the evaluation of Latin American cases compared with international evolution to drive some useful lessons for future enforcement.

China’s defense against secondary sanctions: lessons from the EU blocking statute

PurposeWith the rise of geopolitical tensions among the leading state actors, the Chinese citizens and companies are increasingly targeted by the unilateral restrictive measures. These frequently include the so-called secondary sanctions, i.e. penalties imposed on third parties for failing to comply with the sanctions regime, the US practice being a prominent example. The purpose of this paper is to analyze China's legal instruments related to imposition of and protection from unilateral restrictive measures of third countries.Design/methodology/approachThe present paper discusses China’s legal defenses counteracting the extraterritorial sanctions by comparison with the legislative and enforcement practices of the EU, which has accumulated substantial experience trying to shield its businesses from the US secondary sanctions. The paper identifies the differences between the two anti-sanctions regimes and highlights the key factors that will affect the future enforcement of blocking rules in China.FindingsWhen designing its anti-foreign sanctions legislation, China has considered similar legislation adopted by other jurisdictions, most notably – the EU blocking statute. The comparative assessment of the two blocking regimes reveals substantial similarities in legislative and procedural standards with important differences in enforcement capabilities and institutional frameworks.Originality/valueThe paper represents one of the first attempts to anticipate the directions in enforcement of China's blocking legislation taking into account the EU experiences in this domain.

Spoofing and its Regulation

Nearly a century after the United States enacted its first securities laws, urgent questions remain as to the scope of manipulation law: whether manipulation is possible in principle, and if so, how the law should respond in practice. Sharp disagreement among courts, economists, and legal scholars as to whether trading or quoting activity constitutes illegal manipulation has led to a legal framework that lacks precision and cogency. Moreover, the poorly articulated normative basis for court rulings has resulted in enforcement that is both under-inclusive and over-inclusive in ways that do a poor job of discouraging socially harmful transactions and enabling socially beneficial ones. 
 This Article seeks to clarify this confusion. Drawing on microstructure and financial economics, this Article offers a new understanding of a common kind of quote-driven manipulation, often referred to as “spoofing.” By employing an analytical and normative framework developed previously by two of the authors in assessing another major form of manipulation, trade-driven manipulation, this Article assesses the impact of spoofing on what occurs in the securities markets and carefully evaluates its effects on social welfare and economic efficiency. The result is a new understanding of quote-based manipulation that helps resolve essential questions in manipulation law and provides guidance for future regulation and enforcement.

Formulation of Customary Criminal Law in Future Criminal Code and Legal Enforcement in Indonesia

The pros and cons were debated in limiting national legal substance with full recognition of Customary Criminal Law in the bill of Criminal Code and its future enforcement. On the other hand, there are arguments against the inclusion of Customary Criminal Law in the Criminal Code and the resulting disparities in legal enforcement caused by some Judges’ ignorance of judging customary criminal cases settled with the imposition of customary sanctions, which resulted in an unjust situation. This article aims to serve as a legal academic framework for establishing, identifying, and analyzing the formulation of Customary Criminal Law into the Indonesian Criminal Code, as well as to contribute to the discussion of judges’ roles in sentencing customary criminal cases, which they should determine and judge based on customary law. This article demonstrated the use of normative legal research in conjunction with statutory law, legal conceptual, and philosophical approaches to law. This article discovered that: first, several issues concerning the formulation of Customary Criminal Law into several national Bills of Criminal Code were debatable; second, it also cannot be enacted due to conflicting contexts with Criminal Law principles, unwillingness, and an ambiguous law-making process. Furthermore, the prospect of including the Customary Criminal Law in the Bill of Criminal Code is based on various justifications and legal needs that reflect the diverse local genius that still exists and adheres to Pancasila law principles. Additionally, it relates to a proposed new paradigm that Judges and other legal enforcers should adopt when enforcing Customary Criminal Law in any criminal customary case.

The Viability of Deferred Prosecution Agreements (DPAs) in the UK: The Impact on Global Anti-Bribery Compliance

Deferred prosecution agreements (DPAs) provide an alternative enforcement tool to tackle economic crime. Prosecutors tailor punishment and remediation measures more accurately to satisfy the principles of prosecution. The companies in question can avoid criminal charges, provided that they comply with agreed terms and conditions. The use of DPAs is conducive to relieving collateral consequences, while being able to deter, punish and reshape corporate behaviour. In principle, enforcement authorities can maximise the leverage with criminal liability over companies to cultivate a robust corporate culture against bribery. It is argued that an effective global anti-bribery regime rests with not only transnational cooperation, but also adequate governance and rigorous compliance. With the DPAs having increased in prominence as a mainstay of the US enforcement regime, it remains to be seen whether the potent tool will be viable and further reshape the future enforcement landscape of the anti-bribery regime in the UK and even on a global basis.

The Draft Fining Guidelines and the future of antitrust fines in China

Abstract Fines are a major part of the punishment and deterrence in China’s enforcement of its Antimonopoly Law. China has been drafting antitrust fining guidelines in the past several years and the current version is believed to be close to final. One natural question is: will the antitrust fining guidelines lead to harsher antitrust fines in China’s future enforcement? We attempt to answer this question by assessing whether fine recipients in China’s historical antitrust investigations would have received higher fines according to the Draft Fining Guidelines. Based on a large number of historical non-merger case decisions issued by China’s antitrust agencies through September 2019, our quantitative analysis shows that higher future fines should be expected in the future. We also explore several factors that might explain why historical fines were below the level predicted by the Draft Fining Guidelines.

Platforms as regulators

Abstract The proposition that certain digital platforms act as ‘regulators’ within their own business models is a key pillar of the European Commission report on Competition Policy for the Digital Era, and the basis upon which its authors build a wide-ranging duty for dominant platforms to secure competition that is ‘fair, unbiased and pro-users’. This article seeks to shed light on this novel contention, exploring its meaning and the implications for platform operators. It considers the rationale provided within the report and compares the approach with established Article 102 TFEU case law, specifically the ‘special responsibility’ doctrine. Consideration is further given to whether the platforms-as-regulators notion aligns with alternative modes of regulation within the digital sphere. The aim is to explore whether this approach is coherent, and actually useful, as a means by which to frame and direct future enforcement against digital platforms.

The SEC's Revolving Door: Insights from Boards of Directors

ABSTRACT This study aims to shed light on the determinants and consequences of the revolving door at the Securities and Exchange Commission (SEC). While revolvers may be good monitors due to their SEC experience and, thus, continuously create benefits for the economy (“schooling”), it is possible that they exploit their insights into the enforcement process and private connections to undermine enforcement (“regulatory capture”). Using a newly created dataset of revolvers who moved from the SEC to company boards, this study shows that not all revolvers are appointed for the same reasons and create the same benefits for their new employers. I demonstrate that those revolvers most closely involved in the enforcement process are associated with fewer future enforcement actions, while accounting quality does not improve. Contrarily, external revolvers seem to use their monitoring and advising duties to improve accounting quality. Data Availability: The newly created dataset is available in the Online Appendix; all other data sources are cited in the text.

Effective Water Resources Management for Communities in the Chi River Basin in Thailand

Using the participatory action research methodology (IPAR) method, the input and knowledge of different stakeholder groups is an ongoing process to establish best water user practices to allocate limited resources. Ongoing studies are being held for barrier and flood prevention solutions, integration of competing water user sectors, and evaluation of customary practices and rules. The establishments of updated regulations are necessary for the future enforcement so that water allocation and management is effective and fair for all users. This article addresses effective and fair water resource management regulation (EFWRMR) for water user organizations in the Chi River Basin in Thailand. The development of water resource management regulations of water users organizations are based surveys, analysis, and development of regulations through methodologies and research from organizations and users which broadly include water users, households, community leaders, government agencies, NGOs, other institutions and organizations characterized as Integrated Participatory Action Research (“IPAR”). Using the IPAR methodology, the study compiled information form a comprehensive survey. Topics included problems floods and droughts, and water and solutions such as developing water reservoirs along the natural swamps, other storage capacities and water management. Legal experts were consulted legal experts were consulted on water management, the current state of the ecological community, and draft governmental regulations.

Using Zoning as a Public Health Tool to Reduce Alcohol Outlet Oversaturation, Promote Compliance, and Guide Future Enforcement: a Preliminary Analysis of Transform Baltimore.

Alcohol outlet oversaturation often exacerbates negative public health outcomes. Recently, Baltimore City passed an extensive zoning rewrite ("TransForm Baltimore") that sought to give local government and residents a tool to reduce alcohol outlet oversaturation through land use regulation. The present investigation evaluated the outlet and neighborhood characteristics of stores impacted by two components of TransForm Baltimore: (1) a requirement that taverns licensed for on-premise consumption in addition to off-premise, carryout sales generate at least 50% of their business from on-premise sales, and (2) a requirement to close, repurpose, or relocate all package stores (i.e., off-premise alcohol outlets) that have been operating as "non-conforming" in residential zones since 1971. Research assistants visited every off-premise alcohol outlet in the city (n = 685) to complete an observational assessment. Approximately 77% (n = 530) of these off-premise alcohol outlets were open, including 292 taverns and 238 package stores. t tests and chi-square tests were used to compare neighborhood characteristics (neighborhood disadvantage, median household income, and racial segregation) of sham taverns (i.e., taverns with less than 50% space dedicated for on-premise sales that were primarily operating as a package store) and non-conforming package stores. Of the 292 taverns accessible during the study, the remainder were chronically closed (n = 130); 24 (8.2%) were deemed sham taverns. Sham taverns were more likely to be located in communities with more economic disadvantage and lower median household income (t test; p < 0.05). Compared to taverns, a lower proportion of sham taverns had visible dance floor space, patrons drinking, and menus available (chi-square test; p < 0.001). There were 80 residentially zoned, non-conforming alcohol outlets. These non-conforming alcohol outlets were disproportionately distributed in predominately poor and African American communities (t test; p < 0.05). As compared to conforming alcohol outlets, more non-conforming alcohol outlets sold sex paraphernalia and healthy foods (chi-square test; p < 0.05). With active enforcement, TransForm Baltimore offers the opportunity for local government and residents to improve public health and increase health equity in vulnerable and marginalized neighborhoods.

Descriptive Analysis of the Department of Health-Medical Assistance Program Utilization at the University of the PhilippinesPhilippine General Hospital from January to June 2018

Objective. The objectives of this paper were to describe and analyze the utilization of the Department of Health Medical Assistance Program (DOH-MAP) at the University of the Philippines-Philippine General Hospital (UP-PGH) in order to provide actual data on its implementation and to give recommendations on future enforcement.&#x0D; Methods. Clinical and fiscal records of DOH-MAP recipients were prospectively tracked and analyzed from January to June 2018.&#x0D; Results. A total of Php 20,875,291.98 was utilized in the program from January to June 2018. The departments of Medicine (29.68%), Surgery (26.25%), and Neurosciences (15.99%) were identified as the clinical departments with the highest allocation of assistance fund. The pharmacy (64.28%), laboratory (12.87%), and outsourced medical equipment and services from EQUILIFE (10.26%) were determined to be the cost centers with the highest allotment.&#x0D; Conclusion. The clinical departments and cost centers with high funding utilization identified in this study are recommended to be given appropriate increase in budget allocation, equipment procurement, maintenance and enhancement, and service improvement in order to provide a comprehensive health service delivery for patients of UP-PGH.

Response to the Subcommittee on Antitrust, Commercial, and Administrative Law Committee on the Judiciary, U.S. House of Representatives

Response to the Subcommittee on Antitrust, Commercial, and Administrative Law Committee on the Judiciary, U.S. House of Representatives

Platforms as Regulators

The proposition that certain digital platforms act as ‘regulators’ within their own business models is a key pillar of the European Commission report on Competition Policy for the Digital Era, and the basis upon which its authors build a wide-ranging duty for dominant platforms to secure competition that is ‘fair, unbiased and pro-users’. This article seeks to shed light on this novel contention, exploring its meaning and the implications for platform operators. It considers the rationale provided within the report, and compares the approach with established Art.102 TFEU case-law, specifically the ‘special responsibility’ doctrine. Consideration is also given to whether the platforms-as-regulators notion aligns with alternative modes of regulation within the digital sphere. The aim is to explore whether this approach is coherent, and actually useful, as a means by which to frame and direct future enforcement against digital platforms.

The Role and Problems of Environmental Impact Assessment in Governing Hydro-Power Projects in Cambodia

Hydro-power projects on the Mekong River may cause great impacts on sustainability of the river. This paper investigates the role of Cambodia’s environmental impact assessment (EIA) in governing hydro-power projects and examines whether the current EIA legal regime is capable to address the challenges raised by hydro-power projects. The author finds that Cambodia has established high standards in EIA legal framework. Some proposed requirements, such as the consideration of the impacts of climate change and trans-boundary impacts, may constitute great challenge for future enforcement. Case study in hydro-power projects suggests that the implementation of EIA is far from fulfilling the purposes promised by the black letters in the law. Currently, the main difficulties in implementation are lack of capacity building and public participation. The imperfection of land law as an external element is another obstacle to the effectiveness of EIA law. As a mid-stream riparian state of the Mekong River, on one hand Cambodia is facing potential negative impacts of hydro-power projects in Lao PDR and China, on the other hand, its hydro-power projects may add more threats to the sustainability of Mekong River. This paper argues that for the sustainability of the Mekong water system, Cambodia should implement its EIA law seriously and speed the work of land titles.

Application of factor and cluster analyses to determine source–receptor relationships of industrial volatile organic odor species in a dual-optical sensing system

Abstract. Most odor nuisance investigations rely on either human olfactory examination or on-site sampling and analytical techniques, but these methods are often subject to spatial and temporal limitations and thus impractical for locating odor emission sources. This study developed an alternative approach with a dual-optical sensing system, a meteorological station, and the combination of factor and cluster analyses to identify and characterize emission sources of multiple air contaminants. Factor and cluster analyses were employed to establish the emission profile of multiple odorous substances from each emission source. Both receptor and source monitoring data were collected to characterize the emission sources of various odorous substances. Open-path Fourier transform infrared (OP-FTIR) as a receptor path detected concurrent trends of several organic solvents with concentrations higher than the reference odor threshold values, indicating that these compounds were potential causes of odor nuisance. Qualitative source apportionment by factor and cluster analyses suggested that these odorous substances were used as organic solvents in surface coating or painting processes. Closed-cell Fourier transform infrared (CC-FTIR) at two nearby surface-coating companies indicated that only one company's stack exhibited the same odorous substance profile found by the OP-FTIR receptor path. The major odor emission source was thus identified in this study. This study demonstrated the feasibility of using the alternative investigative framework to successfully identify emission sources from an industrial odor nuisance site. The major emission sources were identified, and future enforcement plans can be conducted to enhance odor investigation efficiency and improve overall air quality.