Law analysis research

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Problem 8

We Take Anything

(hereafter

We

) operates an internet platform. Most of its revenue comes from

website operators that use

We’s

platform for their websites and who make revenue from advertisers

that place their adds on the various websites. The website operators then pay

We

20% of the

advertising revenue that they earn from the advertisers.

1

Do not staple this document to your submission.

2

Future writing assignments will be made up of bonus points.

The number of times that a website is accessed along with an ad is the calculation that is used to

compute the advertising revenue that the advertiser pays the website operator and from which the 20%

share is paid to We by the website operator. If the number of times that a website is accessed, but the

ads do not accompany the access, the amounts paid by the advertisers decrease. The website

operators, therefore, make less revenue and

We

also experiences a loss because of the decrease in

revenue from which its 20% share is computed.

3

Internet advertising is quite lucrative and, therefore, all companies in the chain of advertising revenue

tend to profit quite handsomely.

A new company has entered the world of “ad-blocking.” That company’s name is: Blocker Plus

(hereafter “Blocker”). It has a reputation for being very aggressive and for cornering the market on ad-

blocking. It has a stated mission of putting out of business advertisers that inundate consumers by using

unwanted internet advertising. It claims that unwanted ads consume a consumer’s bandwidth and that

many ads now present security concerns because they distribute malwear. This malwear issue occurs

when attackers purchase legitimate ad spots on legitimate websites, but secretly embed malware into

the code of the ads that they supply to be posted on the website. Furthermore, Blocker argues that

advertising networks frequently collect, involuntarily from users, information regarding their browsing

habits, etc. Therefore, Blocker claims that it is doing a public service by providing ad-blocking which is

what customers/users want.

Blocker’s system that it sells to consumers who want ads blocked functions by reading from a filter list

that lists what elements of a website to block. Blocker advertises that its system comes preconfigured

to read from a well-balanced and popular filter list so that it is fully functional upon initial installation

without the need for additional configuration. However, the system can also be customized so that,

with a few keystrokes, blocking of a multitude of additional ads can occur. Blocker’s system monitors

every content request to be downloaded to a user’s browser and decides whether the download will be

passed to the user or blocked. When Blocker’s system sees a request that matches an item on the filter,

it denies the request so that the content of the ad is never downloaded and it never shows up on the

user’s system. What the consumer gets is the website scrubbed of the identified ad content.

Because there are some ads that consumers want, Blocker has developed a “Clean List” that it uses, in

conjunction with its “Acceptable Ads Policy” to allow those ads to not be blocked, but to be downloaded

to the user’s browser. Blocker charges those advertisers a considerable premium fee to be on the Clean

List and to have their ads reach the consumers.

We

has tracked its advertising revenue stream. Since Blocker was developed and aggressively marketed,

We’s

revenue stream has decreased considerably.

We’s

CEO has come to you, as its Marketing Manager

and asked if there are any legal theories that

We

could assert in contemplated litigation against Blocker.

She specifically cites the Supreme Court’s development of the commercial speech doctrine under the

First Amendment and the Court’s clear recognition of the value of the free flow of commercial

information to a functioning democracy.

We’s

IT people have advised you that the ads blocked by

Blocker can be identified and the identities of companies that are blocking them. What advice do you

give? Are there any additional facts that you would need to know to respond to her inquiry?

3

Advertisers constantly monitor the websites using Blocker and other ad-blockers to determine when their ads

accompany, or do not accompany, the downloads of the websites.

Provide the legal issue that come from this fact pattern. Identify any legal rules and principles that you

would use to analyze the issues that you have identified. If you identify more than one issue, pick one

issue and analyze it in the context of the legal rules and principles that are applicable to that issue.

4

If

you need additional facts, identify them and tell me why they are relevant to your assessment of the

legal issues.