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Month: June 2021

Illicit trade is booming: what can be done

The Irish Revenue recently released their annual report for 2020.

According to the findings, there has been a 250% increase in illegal cigarettes seized since 2019. The sharp increase represents an urgent need for the Irish government to reconsider its approach towards fighting illicit trade. Contrary to popular opinion, taxes are not effective in achieving that.

Illicit trade is a consequence of restrictive policies that create valuable incentives for criminals to provide consumers with a cheaper — and less safe — alternative. Irish fiscal policies aimed at cutting down the demand for cigarettes, for example, such as a 50 cent increase of the excise duty on a pack of cigarettes, plays to the benefit of smugglers seeking quick profits. 

Smugglers exploit a regulatory disparity within Europe, in particular that concerns countries that are in close territorial proximity to the EU. In Minsk the price of a pack is around 1.40 EUR, 10 times cheaper than in Ireland. In 2020 alone, Latvian authorities confiscated 21 million illegal cigarettes from Belarus through a single border entry. It is important to keep in mind the numbers include only the detected cases, and, in reality, the scope of criminal undertakings is much greater. 

The same applies to products across the board, such as drugs. In February, in Cork, the Revenue made one of the largest seizures of cocaine valued at 12.04 million EUR. These are illicit products that can threaten consumer well-being. Some 20 per cent of Irish teenagers have consumed illegal drugs at some point in their lives, and the only way to obtain these is through the black market, where no regulations or age-restrictions apply.

Black markets exist not only because there are groups willing to take the risk of smuggling products across borders, but also because there is a demand for overregulated products. A survey conducted by iReach for the Forest Ireland in October 2020 found that 70% of adults (including 67% of non-smokers) in Ireland agree that it is “understandable” that consumers might choose not to buy cigarettes and tobacco from legitimate retailers in Ireland. 

Ireland as a tobacco high-cost country is, therefore, especially vulnerable to criminal activities, and while detection efforts should be extended, decisive steps in the form of tax cuts or commitment to abstain from further tax increases should be taken. 

A 2010 study on the impact of cigarette tax reduction on consumption behaviour in Canada published by CIRANO (Centre interuniversitaire de recherche en analyse des organisations) in Montreal found that each additional dollar in final applicable taxes raises the incentive to resort to consuming contraband cigarettes by 5.1 per cent, while each additional dollar in tax cuts decreased it by 5.9%. Therefore, higher taxes increase the attractiveness of the black market, and the deeper the tax cuts, the higher the likelihood of stopping smuggling.

While it is true that the cigarette prevalence in Ireland has been consistently dropping, it doesn’t mean that if the government cut taxes the rates would shoot back up. Canada provides a valuable example. In 1994, the Canadian government slashed taxes on cigarettes to tackle the booming illicit trade. Despite alarmist expectations, the smoking prevalence dropped, and the trend has persisted. Compared to pre-tax cuts times, illicit trade has also significantly decreased.

The Irish Heart Foundation’s recommendation to annually increase the price of cigarettes so that the overall cost of a pack reaches €20 by 2025 doesn’t stand up to scrutiny, and will only lead to further spikes in illegal trade in Ireland. 

In order to succeed, the Irish government should escalate detection efforts to target the supply side of the illicit market, and consider significant tax cuts, or, at least, disregard calls for more increases of tobacco excise taxes.

Originally published here.

Bahaya Pelarangan Vape di Negara Berkembang

Dunia saat ini masih terus berperang melawan pandemi COVID-19 yang muncul pada akhir tahun 2019 lalu. Sudah satu setengah tahun lamanya, virus yang sangat mudah menyebar antar manusia ini telah meluluh-lantahkan berbagai kegiatan, seperti acara musik dan perhelatan olahraga, serta keseharian miliaran orang di berbagai tempat di dunia.

Salah satu dampak yang paling terlihat dari munculnya pandemi ini adalah semakin banyaknya orang-orang yang sadar akan pentingnya kesehatan dan kebersihan. Semakin banyak dari kita yang menyadari bahwa mencuci tangan atau membersihkan badan setelah keluar rumah adalah sesuatu yang sangat penting untuk dilakukan agar terhindar dari segala macam penyakit, khususnya COVID-19.

Tidak hanya dari masyarakat, banyak pemerintahan di berbagai belahan dunia juga mulai mengkampanyekan gaya hidup sehat untuk mencegah penyebaran virus tersebut. Beberapa diantaranya yang kita kenal di Indonesia adalah gerakan 5M, yakni Memakai masker, mencuci tangan pakai sabun dan air mengalir, menjaga jarak, menjauhi kerumunan, serta membatasi mobilisasi dan interaksi (kesehatan.kontan.co.id, 26/1/2021).

Namun, berbagai upaya memperbaki kesehatan publik yang diadvokasikan oleh sebagian pihak guna mencegah penyebaran COVID-19 juga tidak hanya melalui kampanye, tetapi juga melalui pelarangan berbagai produk yang dianggap membahayakan kesehatan. Salah satunya produk yang kerap menjadi sasaran adalah produk-produk tembakau seperti rokok.

Salah satu negara yang memberlakukan pelarangan tersebut adalah Afrika Selatan. Pada tahun 2020 lalu misalnya, Afrika Selatan melarang pembelian produk-produk tembakau seperti rokok (bbc.com, 17/5/2020).

Akan tetapi, tidak hanya produk-produk rokok konvensional yang dibakar saja yang diadvokasi oleh beberapa pihak untuk dilarang. Salah satu produk lain yang diadvokasi oleh sebagian pihak untuk dilarang adalah produk-produk rokok elektronik, atau yang dikenal dengan nama vape, karena dianggap juga membahayakan kesehatan.

Salah satu pengusaha dan filantropi yang mengadvokasi kebijakan tersebut adalah pengusaha besar asal Amerika Serikat, Michael Bloomberg. Bloomberg telah meluncurkan inisiatif global untuk pengendalian tembakau sebesar USD1 miliar, atau sekitar 14 triliun rupiah.

Dampak dari inisiatif global yang dilancarkan oleh Bloomberg ini sudah muncul di berbagai negara, khususnya di negara-negara berkembang. Di Filipina misalnya, lembaga regulator kesehatan mulai mempresentasikan berbagai dokumen kebijakan tidak hanya melarang rokok, namun juga vape, di negara tersebutm setelah mendapatkan dana dari inisiatif global Bloomberg (brusselstimes.com, 18/3/2021).

Tidak hanya di Filipina, Meksiko juga mengalami kejadian yang serupa. Di Meksiko belum lama ini, terungkap bahwa salah satu staf pengacara dari lembaga advokasi kesehatan yang didanai oleh Bloomberg, yang bernama Campaign for Tobacco-Free Kids, telah menyusun undang-undang yang bertujuan untuk melarang impor dan penjualan produk-produk vape (brusselstimes.com, 18/3/2021).

Kebijakan ini tentunya merupakan sesuatu yang sangat memprihatinkan, khususnya di negara-negara berkembang. Pelarangan terhadap produk-produk vape atau rokok elektronik berarti akan semakin banyak orang yang beralih ke produk-produk rokok konvensional yang dibakar, atau produk-produk vape ilegal yang sangat berbahaya hingga dapat menimbulkan kematian.

Hal ini akan semakin berbahaya bila terjadi di negara-negara berkembang, apalagi pada masa pandemi, karena secara umum negara-negara tersebut tidak memiliki fasilitas layanan kesehatan yang baik. Bila produk-produk vape dilarang, terlebih lagi pada masa pendemi, maka akan semakin banyak orang yang beralih ke rokok konvensional yang dibakar, yang secara ilmiah sudah terbukti menyebabkan berbagai penyakit kronis seperti kanker dan penyakit jantung.

Vape atau rokok elektronik sudah terbukti merupakan produk yang jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar. Pada tahun 2015 lalu, lembaga kesehatan Britania Raya, Public Health England (PHE), mengeluarkan laporan bahwa vape atau rokok elektronik merupakan produk yang 95% jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar (Public Health England, 2015).

Oleh karena itu, kebijakan untuk memperbaiki kesehatan publik dengan cara melarang produk-produk vape atau rokok elektronik adalah kebijakan yang tidak tepat. Untuk memperbaiki kesehatan publik dari dampak negatif dari rokok konvensional, akan lebih efektif bila dengan membeirkan opsi produk lain yang lebih aman kepada para perokok.

Hal ini sudah terbukti di negara-negara di mana pemerintahnya bukan melarang produk-produk vape, namun justru mendorong para perokok untuk beralih ke produk-produk rokok elektronik yang jauh lebih aman. Di negara-negara tersebut, jumlah perokok justru menjadi berkurang. Di Selandia Baru misalnya, berdasarkan survei tahun 2018, ada 13,2% perokok. Jumlah tersebut berkurang dari tahun 2013 ketika angka perokok sejumlah 15,1% (stats.govt.nz, 10/10/2019).

Sebagai penutup, bila kita ingin membantu para perokok, khususnya di negara-negara berkembang yang jumlahnya sangat besar, maka kita harus mampu menyediakan produk alternatif yang dapat digunakan oleh para perkok untuk menghentikan kebiasaannya. Jangan sampai, intensi baik kita untuk memperbaiki kesehatan publik justru semakin menghasilkan sesuatu yang lebih buruk.

Originally published here.

The EU should drop the Digital Services Tax

European consumers risk paying more

With the rise of the digital economy, a trend towards increased regulation of digital services has come to the fore. Digital services tax (DST), under which multinational enterprises are taxed in countries where they provide services through a digital marketplace, has become one of the most popular means to tame the big players.

In 2018, the European Commission initiated the introduction of a 3 per cent DST on the revenues generated in the EU digital market, including online sales and advertising. However, with the opposition of countries such as Sweden or Ireland, no agreement at the Council level has ever been reached. Despite the lack of compromise, member states went on to introduce DSTs on national levels. As a result, Austria, Belgium, Czech Republic, France, Hungary, Italy, Poland, Slovenia, Spain have proposed, announced or are already implementing some sort of digital tax. 

According to a KPMG report, the said tax is generating 2 to 3 percent of the countries’ government revenues from a narrow group of large Internet companies. Although rates slightly differ between the member states – 7.5 percent in Hungary and 3 percent in France – the target is generally the same: large multinational companies.

Under current international tax rules, a country where multinational service companies are subject to corporate income tax is generally determined by the place where  production occurs rather than where consumers or users are. However, the proponents of DST argue that digital businesses get income by selling to users abroad through the digital economy but do so without physical presence there and conversely they are not subject to corporate income tax there.

The Organisation for Economic Co-operation and Development (OECD) has called on more than 130 countries to amend the international taxation system. This current proposal would require multinational businesses to pay some of their income taxes where their consumers or users are. According to the OECD, the dilemma could be unlocked this year, and great hopes are put into the Biden administration to help make that happen.

DSTs distort the market

While Austria and Hungary are taxing just advertising, in France, Turkey, and Italy, the tax scope is much broader. It includes revenues from providing a digital interface, targeted advertising, and data transmission about users for advertising purposes. Ultimately these taxes and the additional costs companies will have to be borne by consumers. Higher costs for advertising are likely to result in higher prices for these companies’ products and services. According to a 2019 study on the economic impact of the French Digital Service Tax “approximately 55 percent of the total tax burden will be borne by consumers, 40 percent by businesses that use digital platforms, and only 5 percent by the large internet companies targeted.”

Turkey and Austria provide a valuable insight into how these taxes work.

According to the report mentioned above, in Turkey, in September 2020, an additional 7.5 percent fee was added to the costs of in-app subscriptions and other types of payment made on the digital platforms. In Austria, 5 percent of DST has been added to developers and advertisers’ invoices when promoted as part of the Austrian DST. 

These additional costs are paid by consumers and small developers and do nothing to address the evolving nature of the digital market. In economic terms, DSTs increase the deadweight loss.

At first glance, it seems unfair that big multinationals don’t pay taxes while traditional businesses are overwhelmed by taxation and regulation. The EU Commission found that within the EU, digital companies had to pay 9.5 percent in tax on average while traditional business models were subject to a 23 percent  average effective tax rate. However, if the goal is to enhance economic well-being, a better solution would be to drive down taxes for both types of businesses. 

Digital platforms are creating innovation and wealth within the economy. The “app economy” has created millions of jobs in the last few years, with 800,000 jobs in Europe and the United States in 2017 alone.

On the opposite of the current political belief, the digital service tax won’t affect big multinationals, but small developers will have to increase their price. European innovation will suffer too. If the prices of scaling up go up, small developers and innovators won’t be able to effectively compete with the US companies.

Digital platforms and services have helped millions of people working from home during the recent COVID-19 pandemic and generally have revolutionised the global economy. It is exactly because digital platforms are different from the supply chain that had been prevalent for hundreds of years, that there is a temptation to overregulate them, otherwise to put brakes on them in order to limit risks stemming from the lack of knowledge. 

Every tax, including a revenue tax, is more preoccupied with collecting profits rather than enhancing innovation. When talking about DSTs, it is key to understand what goal we are pursuing. If we want the European Union to become an innovation hub, then the DST definitely isn’t the way forward but if we want to punish big tech companies valued by European consumers for their success, then it is exactly what we need. 

And yet, even if we were to go down that road and continue to stand by the DST, we should do so by encouraging tax competition within the EU instead of imposing even more tax centralisation. Competition would allow EU member states to compete between themselves as regulatory regimes. In a similar fashion, that would provide digital services and platforms with more choice.

Digital economy boosts economic well-being. Some apps, such as Shazam, which recognizes the song played in that moment, or Slack, a service that provides instant messages for companies and teams, have been created by young entrepreneurs. Since then, they have exponentially expanded, becoming part of our daily life. 

In order to increase competitions in the digital market the EU should look to push more to smartly regulate the digital platform not to tax them. Such regulation would include clear rules of conduct defining blacklisted practices (e.g.i.e. self-preferencing) in order to self regulate certain aspects of a digital platform conduct, including transparency towards users, reporting obligations and prohibitions. 

Such an approach would safeguard the competition so that SMEs are able to compete with big players and create the dynamic market that benefits all consumers.

If, on the other side, European countries continue to push to introduce and increase DSTs without any agreement at the global level, European consumers risk paying more than their North American or South Asian counterparts and lose innovation and choice. DSTs are ineffective, and the EU should walk away from it once and for all.

Originally published here.

How Can We Ensure Consumer Privacy?

Each and every week, we hear of new data breaches, hacks, and disclosures of sensitive financial and personal information.

Last month, it was the cyberattack on the Colonial Pipeline in the United States, causing spikes in gas prices and long lines at the pump. Before that, news broke of a data leak affecting half a billion Facebook accounts, a bot that has successfully scraped 500 million LinkedIn accounts, and a hack at Stanford University that exposed thousands of social security numbers and financial details. The cycle is endless.

The sheer number of reports of data leaks, hacks, and scams on affected accounts has now grown so gargantuan that consumers and users are left numb. The more that number grows, the more we grow numb.

But breaches of private data matter. And consumers should be rightly ticked off.

Because for every company screw-up, hacker exploit, and insecure government database, there are thousands of firms and organizations doing it right, keeping users’ data secure, encrypted, and away from prying eyes.

And while individual countries in the European Union have their own privacy and data laws, the more troublesome aspect here is the troubled General Data Protection Regulation (GDPR), which all too often makes it more difficult for legitimate businesses to secure data, not less.

While we should always be vigilant about potentials for leaks and hacks, a chief concern of a smart and common-sense data privacy law or directive should be in championing innovation, which isn’t the case at present.

For every new health data company, logistics firm, or consumer wearable, proper data collection and retention are a core value. The more that rules are uniform, clear, and do not create barriers to entry, the more innovation we will see when it comes to data protection.

We should incentivize firms to adopt interoperability and open data standards to ensure data is portable and easy to access for users. Major social media networks now allow this prevision, and it has been the standard for website data for several years.

If that becomes the standard, consumers will be able to choose the brands and services that best cater to their needs and interests, rather than just companies left standing in the wake of overregulation.

At the same time, if we are to have revised privacy rules in the EU, we should enshrine the principle of technology neutrality, where government avoids decreeing winners and losers. That means that regulating or endorsing various formats of data, algorithms, or technology should be determined by firms and consumers, not government agencies without the knowledge necessary to make good decisions. The EU’s recent attempt to designate the “common phone charger” as the micro-USB connection, at a time when USB-C connections are becoming the industry standard, is an easy example.

This also extends to innovation practices such as targeted advertising, geo-targeting, or personalization, which are key to the consumer experience.

Added to that, we should be wary of all attempts to outlaw encryption for both commercial and personal use.

Pressure has mounted on the European Commission to overhaul encryption by private actors, but that would be a mistake.

The reason encryption remains a powerful tool in the arsenal of companies and agencies that handle our data and communications is because it works. We must defend it at any cost.

While there is plenty to be concerned about when it comes to online breaches and hacks, consumers should be able to benefit from an innovative marketplace of products and services, unencumbered by regulations that all too often restrict progress.

This balance is possible and necessary, both if we want to have a more secure online experience, and if we want to continue to have the best technology at our disposal to improve our lives.

Originally published here.

Regulate vaping to keep youth vaping incidences to a minimum, says consumer advocacy group

Regulating vaping can help keep youth vaping incidences to a minimum, said a UK-based consumer advocacy group.

In a statement today, the London-based Consumer Choice Center (CCC) said that in the UK, where vape is regulated, youth vaping incidences have been minimised.

It cited a report in 2021 by Action on Smoking and Health, which examined the use of e-cigarettes or vape among youths in Great Britain, that found that a large majority of 11 to 18-year-olds have never tried or are unaware of e-cigarettes (83%). This finding has remained consistent since 2017.

It said the survey further found that vaping is much less common among youths who have never smoked. A large majority of “never smokers” aged 11-18 years, 94.1% in total, have either never vaped (87.9%) or are not aware of them (6.2%).

In its recent policy note entitled “Age Restrictions of Vape Products”, CCC recommended the following:
• Introduce smart regulations and enforce strict age restrictions on vaping devices and liquids at the points of sale
• Use modern age verification technology for online sales
• Learn from other industries such as alcohol and fireworks on how to improve compliance rates
• Retail and industry should be encouraged to be more proactive with the enforcement of rules
• Do not punish legal adult vapers for the lack of enforcement of age restrictions

CCC managing director Fred Roeder said that instead of taking drastic measures such as banning vape, which will only drive more consumers to illegal products on the unregulated black market, a more coordinated approach by both regulators and industry can and should be explored.

“We believe that the regulations with strict enforcement on no-sale to the underage marks the distinction between consenting adult consumers and those who have not reached the legal age to make these decisions,” he said.

He also cited examples from the UK on how controls are put in place to stop the underage from purchasing products with age restrictions.

An example of such a solution is AgeChecked, a UK-based secured online age verification system that requests a buyer’s full name, billing address, and date of birth when placing an order.

This information must be entered as it will appear on the buyer’s driver’s license, electoral roll, or be used for a UK credit card, he said.

Originally published here.

The Consumer Choice Center stands opposed to antitrust actions on innovative tech firms

Today, the Consumer Choice Center sent a letter to the members of the House Judiciary Committee to explain our opposition to a series of bills soon to be introduced on the House floors related to antitrust actions.

The full letter is below, and available in PDF form to share.

Dear Member of the House Judiciary Committee,

As a consumer group, we write to you to raise your attention about a series of bills that will soon be introduced on the floor of the House and make their way to the House Judiciary Committee.

These bills, soon to be introduced by Democrats and co-sponsored by some Republicans, relate to antitrust actions to be taken against tech firms based in the United States.

These include the Merger Filing Fee Modernization Act, End Platform Monopolies Act, Platform Anti-Monopoly Act, Platform Competition and Opportunity Act, and Augmenting Compatibility and Competition by Enabling Service Switching Act.

In our view, these bills are not about concern for the consumer, the consumer welfare standard as traditionally understood in antitrust law, or even because companies like Amazon, Facebook, Twitter, and Microsoft are “too big.” 

Rather, these actions are a zealous takedown of American innovators that will harm consumers and punish innovation. This is a dangerous precedent.

Many of the tech companies in the crosshairs offer free or inexpensive services to consumers in a competitive marketplace that boasts hundreds of social apps for messaging, photo sharing, social networking, and online marketplaces that offer quick delivery, stellar service, and unbeatable prices.

As consumers of these services, we understand that there are often decisions made by these companies that raise concerns. For political conservatives, the issue hinges on whether there is bias in the moderation of accounts, comments, and products. For liberals, it is about whether these companies are too powerful or too big to be reined in by government, and questions about how they pay their taxes or whether various tech companies played a part in getting Donald Trump elected in 2016.

These are all valid concerns, and we have been active in calling them out where necessary.

However, using the power of the federal government to break up innovative American companies subject to domestic law, especially in the face of mounting competition from countries that are not liberal democracies, such as China, is wrong and will lead to even more unintended consequences.

The American people benefit from a competitive and free market for all goods, services, and networks we use online. Weaponizing our federal agencies to break up companies, especially when there is no demonstrated case of consumer harm, will chill innovation and stall our competitive edge as a country.

If there are breaches of data or if consumer privacy is compromised, the Federal Trade Commission should absolutely issue fines and other penalties. We agree with this. If there are egregious violations of law, they should be dealt with immediately and appropriately.

Let us be clear: The internet is the ultimate playground for consumer choice. Government attempts to intervene and regulate based on political considerations will only restrict consumer choice and deprive us of what we’ve thus far enjoyed.

The overwhelming majority of users are happy with online marketplaces and with their profiles on social platforms. They’re able to connect with friends and family around the world, and share images and posts that spark conversations. Millions of small businesses, artists, and even news websites are dependent on these platforms to make their living. This is an especially important point.

Using the force of government to break apart businesses because of particular stances or actions they’ve taken, all legal under current law, is highly vindictive and will restrict the ability for ordinary people like myself or millions of other consumers to enjoy the platforms for which we voluntarily signed up. 

We should hold these platforms accountable when they make mistakes, but not invite the federal government to determine which sites or platforms we can click on. The government’s role is not to pick winners and losers. It’s to ensure our rights to life, liberty, and pursuit of happiness, as the Declaration of Independence states. 

As such, when these bills come before you as legislators, we urge you, as a consumer advocacy group speaking for millions of people just like you around the country, to reject them. 

Sincerely Yours,

Yaël Ossowski

Deputy Director, Consumer Choice Center

yael@consumerchoicecenter.org

The EU should commit to the concept of harm reduction

A few days ago, I came across a 2017 TEDMED talk on the harm reduction model of drug addiction by Dr Mark Tyndall.

Although mainly focused on drug addiction treatment, the speech provides a valuable insight into the nature of harm reduction that can be applied more generally. In particular, that concerns vaping as a cessation tool.

In the talk, Dr Tyndall argues that “starting with abstinence is like asking a new diabetic to quit sugar or a severe asthmatic to start running marathons or a depressed person to just be happy. For any other medical condition, we would never start with the most extreme option. What makes us think that strategy would work for something as complex as addiction?”

Taxes, marketing and advertising bans along with other restrictions on both tobacco and vaping products pursue a strategy of abstinence. Based on the assumption that smokers can quit overnight after they see a price increase, the reality is that such policies do nothing to reduce smoking rates. Advocates of such an approach point to the declining smoking rates as evidence of their success. However, the causation link is hardly traceable there because of multiple variables at play. 

Although smoking rates in tobacco in vaping restrictive countries such as Ireland, really are declining, it is hardly a reason for optimism. The downward trend in smoking prevalence is driven by people who are dying prematurely from smoking, according to Dr Tyndall. Vaping, on the contrary, could save those lives, and discouraging it is ignorant of consumers’ needs.

Blinded by their pursuit of smoke-free Europe, European policymakers are consistently missing the opportunity to actually help smokers quit. We at the Consumer Choice Center have stressed many times the data point that vaping is 95 percent less harmful than tobacco cigarettes and that it targets adult consumers who seek to quit smoking. E-cigarettes are an adult-only product and do not serve as a means to entice underage smoking. Although scientifically proved, these facts are overlooked by the EU. 

As such, the flawed belief that vaping contributes to rising underage smoking rates casts a shadow on harm reduction. It is also one of the main reasons underlying the proposed Dutch vape flavour ban. A 2017 study published in Tobacco Control found that as the number of vapers in the US and UK went up, there was no increase in youth smoking. Between 2011 and 2016, smoking in the past 30 days declined from 6.3 percent to 4.3 percent among middle school students and from 21.8 percent to 13.8 percent among high school students in the US.

Overregulation of vaping in the European Union and its member states won’t bring the expected results. Smokers should not be seen as children who have to be punished into abstinence for choosing to smoke. A much better way forward is to encourage them to switch to vaping thereby helping them reduce health associated risks. 

Before it’s too late, we should strongly commit to the concept of harm reduction. Now, that would really help us beat cancer.

Originally published here.

Biden’s broadband plan may hurt providers, consumers

It is no secret that access to reliable, high-speed internet is more important now than ever before, especially given how we spent this past year. We now rely heavily on virtual connections for school, work and perhaps a few never-ending Netflix marathons in an attempt to stay sane throughout lockdowns.

With a more online life, it’s not surprising that broadband usage increased 40% over the last year. Many suspect this level of demand for broadband will continue, but there are millions of individuals across the country who do not yet have access, including 368,000 rural Michigan households.

It’s estimated that there is over $2.5 billion in potential economic benefit that is lost among Michigan residents disconnected from the internet, making it clear that we need to find a solution to end this digital divide.

President Joe Biden recently proposed $100 billion to expand broadband through the American Jobs Plan. While this may seem like a worthy infrastructural investment to some, the fine print of the plan proposes lackluster solutions that create a stormy future for Michigan consumers.

A glaring issue is the prioritization of government-run broadband networks with “less pressure to turn profits and with a commitment to serving entire communities.” It’s well documented that these networks are ineffective 𑁋 a Phoenix Center study found that prices in markets with a municipal provider are higher than those in markets without one.

Michigan allows municipal broadband networks only in unserved or underserved areas and if their benefits outweigh the costs. However, local governments have been giving municipal networks advantages over private providers by providing subsidies and privileged regulatory treatment to showcase the illusion of compliance.

This happened recently in Marshall, and the results were dreadful. According to a report released by the Taxpayers Protection Alliance highlighting failed government-run broadband networks, Marshall’s fiber broadband network, called FiberNet, cost $3.1 million and serves only a fraction of its population. It’s worth noting that private broadband services are also available in Marshall.

Another key issue with Biden’s plan is that it exclusively prioritizes building out fiber broadband. While fiber may be a great option for some, it’s not always practical for rural communities due to the high costs and installation process required. Rural households can be located miles apart, and with fiber installation costing as high as $27,000/per mile, the estimated demand from rural communities often does not offset the costs of building fiber networks in those areas.

Innovative solutions like Elon Musk’s Starlink project, which aims to provide low-cost satellite broadband internet access across the globe, should be encouraged. By the end of this year, there will be over 1,000 satellites providing internet to more than 10,000 customers worldwide through Starlink. This is an exciting development because satellite networks are often cheaper, more efficient and can provide faster speeds to rural households than fiber.

The final major issue with Biden’s plan is that it vows to get America to 100% broadband coverage, but this doesn’t take into account all consumer preferences. According to Pew Research, 15% of Americans rely on smartphones and don’t have broadband services. Although it’s not certain as to why, one potential reason is the frequency of free Wi-Fi available in many public spaces which may result in some households opting out of paying for broadband.

To help Michigan live up to its full economic potential, it’s crucial that we get the 368,000 rural households access to high speed internet quickly. The state should embrace private internet service providers, practice technology neutrality by not favoring one broadband type over another and encourage more innovations that benefit consumers.

Originally published here.

The Path We Shouldn’t Take on Tech Regulation

Let’s conduct a thought experiment: At the behest of several large legacy news outlets, a government institutes a law requiring that every time a news story is linked to on social media, the social network must pay a fee to news outlets.

In other words, to allow a newspaper column or celebrity gossip blog link to appear elsewhere, that website will have to shell out money to the news outlet where it originated.

While such a case seems laughable elsewhere, that is precisely what Australia recently attempted in its escalating war against tech companies like Facebook and Google.

And countries like Canada, the United Kingdom, France, and other EU nations are lining up to be next.

Late last year, the News Media Bargaining Code was introduced in the Australian Parliament to “address bargaining power imbalances between Australian news media businesses and digital platforms.” The bill was the multi-year effort of the country’s competition and consumer commission, requested by the conservative-leaning Liberal Party.

In pitching the law, Prime Minister Scott Morrison made all the necessary overtures signaling opposition to “Big Tech.”

By imposing a link tax on tech firms, the idea was to bolster Australian media companies that have been losing advertising revenue to these platforms. But that comes at a significant cost to both consumer choice and to the openness of the Internet itself.

The founder of the World Wide Web, Tim Berners-Lee, said such a proposal would make the Internet “unworkable,” imposing costs and taxes on what is supposed to be a free space on the open network. In other words, these regulations would likely halt the most basic principles the internet was founded on in the first place.

It is up to media firms to discover innovative and effective methods of capturing digital audiences, not lobby governments to siphon money for them.

Google conceded early in the fight, creating a “news showcase” in countries like Australia, the UK, and Argentina that would offer some premiums to publishers. But Facebook stood its ground.

And though Morrison and his fellow parliamentarians unleashed the pendulum, it eventually swung back hard against Australian consumers.

Recently, millions of Australians logged onto Facebook to find out they could no longer share links or articles from Australian news sites. Rather than upend their business model to comply with proposed legislation, the company decided to block domestic news from being shared on the platform altogether.

It was a bold move intended to demonstrate to the government that media outlets need Facebook more than they need them.

Later, however, Facebook announced it struck individual agreements with smaller publishers in the commonwealth country.

“After further discussions with the Australian government, we have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers,” said Facebook global news VP Campbell Brown.

This precedent is important for two reasons.

First, Australia’s bill is one of the most brazen attempts to use domestic media law to score revenue from an American tech company.

Second, it shows that this has everything to do with bailing out traditional media companies and almost nothing to do with consumers.

Much like in the European Union and some Latin American countries, the fixation on taxing and restricting tech companies hinges on getting a piece of the pie. Concern for the consumer, and their continued access to information online, is secondary.

We have seen it with Uber and Apple in Brussels and London, and it will no doubt continue as tax-starved countries attempt to reign in what they perceive as the golden goose.

That is why these policies are so destructive to consumers and the fundamental principles to an open Internet.

The key to media outlets thriving and evolving in the digital age will be innovation and creativity, all of which benefit consumers, not bans, tax hikes, or zealous media laws.

Originally published here.

Why the Dutch vaping flavour ban won’t drive down underage smoking rates

Although noble in intent, the ban would have the opposite effect, argue the Consumer Choice Center’s Maria Chaplia and World Vapers Alliance’s Michael Landl.

Starting from 1 July 2022, flavoured e-liquids might be banned in the Netherlands. The decision to proceed with the ban – originally proposed in June 2020 – is drastically at odds with public opinion, let alone science. Combined with the EU Beating Cancer Plan’s restrictive anti-vaping measures, the flavour ban demonstrates Europe’s incessant drift away from evidence-based policymaking.

Vaping is facing such regulatory hardships primarily because it’s misunderstood. Invented as a cessation tool, vaping targets adult smokers, in particular heavy ones, to help them quit. In the UK, electronic cigarettes are even given to smokers at hospitals. And vape flavours play a crucial role in the crusade for lowering tobacco smoking rates.

The Dutch government’s reasoning for the vape flavour ban is to tackle teen smoking. As such, the goal is indeed noble since e-cigarettes should be adult-only products and strict age restrictions need to be enforced. However, if that is really the goal then the Dutch government is shooting in the wrong direction.

According to a recently published study by Yale School of Public Health, a San Francisco vape flavour ban doubled high school students’ probability of smoking conventional cigarettes. The California city saw a 30 percent increase in underage use of cigarettes for the first time in more than a decade, while other cities across the country continue to see declining rates.

“Without solving the teen smoking problem, the ban will have disastrous unintended consequences and undermine harm reduction efforts”

According to a 2017 study published in Tobacco Control, as the number of vapers in the US and UK went up, there was no increase in youth smoking. Between 2011 and 2016, smoking in the past 30 days declined from 6.3 percent to 4.3 percent among middle school students and from 21.8 percent to 13.8 percent among high school students in the US.

Without solving the teen smoking problem, the ban will have disastrous unintended consequences and undermine harm reduction efforts. In the Netherlands, 3.1 percent of adults use e-cigarettes, and, with the ban in place, nearly 260,000 Dutch vapers might return to smoking.

Flavours play a vital role for smokers who want to quit. Adult consumers, who have used vaping to quit smoking say that flavours, other than tobacco, were a decisive factor in preventing them from returning to smoking. By using flavoured e-liquids they are 230 percent more likely to quit smoking than if using tobacco-flavoured ones.

The proposed ban won’t drive down demand for flavours. What it will do, however, is boost illicit trade. As demonstrated by high taxes, marketing and advertising bans, and other restrictions across the board, restrictive policies do not achieve the desired outcomes. Despite a nicotine sales vaping ban in Australia, more than half a million consumers vape, while 2.4 million people have tried it at some point.

As demonstrated by Public Health England, vaping is 95 percent less harmful than tobacco cigarettes. Therefore, both in the short-and long-term, the Dutch vape flavour ban is too high of a price to pay, especially in light of our shared European efforts to reduce cancer rates.

“By using flavoured e-liquids they [adult smokers] are 230 percent more likely to quit smoking than if using tobacco-flavoured ones”

In light of the strong opposition expressed by citizens’ in the public consultation, with 98 percent of submissions opposing the ban, as well as the lack of legitimacy of this cabinet, the Dutch anti-vaping aspirations are completely unethical. This is a huge blow for tobacco harm reduction efforts and all the vapers who raised their voices, and it is likely to tarnish the reputation of the Netherlands.

Originally published here.

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