Digital Fraud: A Market Regulation Approach to Digital Rights/Restrictions Management

S.K. Mehra (USA)


Digital rights management, copyright, fraud, antitrust, consumer protection


Digital Rights/Restrictions Management (hereafter DRM1 ) provokes strong reactions. Some view DRM as a potential threat to free expression. Others view DRM as a technological solution to bargaining failure, obviating some of the need for the “fair use” doctrine. But First Amendment and copyright law alone do not capture the pros and cons of DRM. Instead, basic concepts of consumer fraud and antitrust harm can help inform policy reactions to DRM. In particular, this article proposes that brick-and-mortar consumer fraud can explain antipathy to the process by which copyright holders impose DRM on consumers. Additionally, antitrust’s experience can help us understand antagonism to the substance of DRM’s effects. Combining the two can help us make sense of the regulatory initiatives aimed at DRM disclosure. Such regulation can address the information costs and lock-in effects that copyright holders may seek to exploit with DRM – a practice this article terms “Digital Fraud.”

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