Foreign Influences on Research Integrity: A Legitimate Threat or an Overreaction?

By: Om Patel

In 1979, an international agreement between US President Jimmy Carter and China’s political leader, Deng-Xiaoping, sparked larger-scale science and technology collaboration between US and China.[1] The deal was struck to benefit both countries. For China, a partnership with the US meant its scientists would be exposed to innovative Western practices, thus enhancing its technological capabilities and strengthening its economic clout; for the US, the arrangement meant access to a highly-skilled talent pool and the opportunity to collaborate in important scientific discovery in a nascent foreign market.[2]

Since 2000, the dynamic of the partnership has shifted as China’s spending on research and development has seen an eightfold increase, while US spending on research has not kept pace.[3] Faced with a shortage of research funds, American universities flocked to foreign countries for funding and talent, and China supplied.[4] As a result, Chinese graduate students began to fuel many publications in prominent science journals, and by 2018, China emerged as the US’s top research collaborator.[5] The seemingly symbiotic partnership had one major problem: many American universities could not account for the extent of their faculty’s involvement with the foreign sources.[6] For example, some universities did not know which professors were even participating in programs hosted by Chinese universities and some faculty members failed to report their foreign research to US granting agencies.[7]

The loose and decentralized relationship with China has been viewed as the source of recently research integrity violations by faculty at major research universities.[8] As a result of these alleged breaches and the geopolitical tensions of the two countries, in March 2018, the Council on Foreign Relations cautioned higher education leaders that if they did not develop rules to govern their relations with the Chinese government, Congress or the executive branch would.[9]

The warning has put significant pressure on the National Institute of Health (NIH) to ensure that the research community is fully aware of the threats of foreign influence and that universities that receive NIH-funding are taking the requisite steps to protect their work. This includes identifying approaches to ensure that research interests are accurately reported and safeguarded and additional steps are taken to protect the integrity of the peer review process.[10] In addition, the State Department has also put restrictions on Chinese students seeking visas to study in certain research areas and the Departments of Energy, Defense, and Commerce have announced plans to cut back research in “sensitive” countries to protect technology from theft and to tighten export controls.[11]

According to many academic leaders, however, the government’s protectionist messaging undervalues the long-held contributions and productive relationships with foreign scientists and undermines our ability to attract scientists from all over the world.[12] Furthermore, they believe that the political rhetoric surrounding the government’s guidance seems to improperly taint all Chinese scholars as threats to academic research integrity.[13]

As geopolitical tensions between the US and China escalate, are both countries setting the stage for another Cold War? Though it may be too early to tell, both countries are well aware of the stakes: the nation that most quickly develops and sells leading technology and innovations (i.e., artificial intelligence, the internet of things, electric and autonomous vehicles, and 5G connectivity) will be the dominant nation moving forward and each will vie to the bitter end to wield that control.

 

 

[1]                Lindsay Ellis & Nell Gluckman, Partners No More?, Chron. of Higher Educ., June 7, 2019, at A2.

[2]                Id.

[3]                Id. at A4.

[4]                Id. at A2.

[5]                Id.

[6]                Id.

[7]                Id.

[8]                In 2015, Tianjin University professors who earned their PhD’s at the University of Southern California were charged with stealing trade secrets that could bolster military operations; a former Chinese Duke University researcher was believed to have stolen “invisibility cloak” military technology that could shield objects from detection. See id.

[9]                Id. at A3.

[10]              Jeffery Balser, et al., Nat’l inst. of health, ACD Working Group for Foreign Influence on Research Integrity 12–13 (2018).

[11]              In April 2018, the Massachusetts Institute of Technology (MIT) said it would start more carefully scrutinizing “elevated risk” collaborations between its faculty members and people or entities in China, Russia, and Saudi Arabia. MIT along with Cornell and Stanford are also beginning to reject Chinese money for research and halting any new research agreements with Chinese corporations. See Ellis & Gluckman, supra note 1, at A5.

[12]              Id. at A4.

[13]              Id. at A5.

Should Web Browser Developers be able to Hinder Adblocking Capabilities of Third-Party Addons?

By: Zaid Qasem

Targeted advertisements have become an essential part of experiencing the internet. Content providers offering entertainment, information, or services for free are usually able to sustain their business through advertisements. These ads sometimes come in more reserved forms such as static banners or square ads and sometimes are a bit more intrusive in the form of flash ads, pop-ups, invisible overlays, and videos that automatically play once you open a webpage.

As internet ads become more prevalent, web browser addons that automatically block ads have become more popular.[1] Consumers download adblockers not just to block advertisements but also to improve the speed and smoothness of their browsing experience as well as avoid potential viruses and data overages. [2] Some developers have even created web browsers that have built-in adblocking functionality as soon as they are installed such as Firefox Focus for iOS and Android and Brave Browser which is available on mobile platforms as well as PC and Mac.[3]

Chrome, a browser made by Google, holds more than half of the market share worldwide.[4] Google’s Chrome browser is based off Chromium which is also developed by Google.[5] Chromium is open-source and used by other web browsers including ones that have sizeable userbases such as Opera, Brave[6], and most recently Microsoft Edge.[7] Google, which is in the business of selling ads[8], allows these addons to be installed on their browser directly through their Chrome addon store. In their recent 10-K filing to the SEC, Alphabet, the parent company of Google, noted that adblockers pose a risk to their business model.[9] In what many believe to be a response to the rising popularity of adblockers, Google has announced plans to change their Chrome web browser through a series of changes they call “Manifest V3.”[10] In a nutshell, the changes will severely diminish the adblocking capabilities of adblockers like uBlock Origin, which have been extremely efficient in blocking ads across a vast portion of the internet.[11]

The question that naturally arises from this is whether the use of adblocking tools should be considered a right in need of legal protection. The Supreme Court of Germany recently passed down a ruling in favor of Eyeo GmbH, the parent company of Adblock Plus, which determined that people have a right to block ads.[12] The court reasoned that users are not subject to any contract to view the ads displayed on a webpage, therefore it is within their right to have them blocked.[13] Furthermore,  If the trend against adblockers continues, similar legal battles within the U.S. are likely to arise.

[1] Aigerim Berzinya, Ad Blockers are Super Popular Right Now and for a Reason, turtler (Jun. 03, 2019), https://turtler.io/news/ad-blockers-are-super-popular-right-now-and-for-a-reason

[2] German Adblocking Ruling Said Important for Global Publishers, Advertisers, Washngton Internet Daily (May 04, 2018), https://advance.lexis.com/api/permalink/8b853348-1c27-4350-bcc2-811e70faa6e0/?context=1000516

[3] Berzinya, supra.

[4] Browser Market Share Worldwide, statcounter GlobalStats (June 2019), https://gs.statcounter.com/browser-market-share#monthly-201906-201906-bar

[5] The Chromium Projects, https://www.chromium.org/ (last visited Sept. 22, 2019)

[6] Catalin Cimpanu, Brave Browser moves to Chromium codebase, now supports Chrome extensions, ZDNet (December 13, 2018, 5:30 AM), https://www.zdnet.com/article/brave-browser-moves-to-chromium-codebase-now-supports-chrome-extensions/

[7] Brad Chacos, Microsoft Edge embraces open-source Chromium code, plans move to Windows 7, 8, and Macs, PCWorld (December 10, 2018 9:59 AM), https://www.pcworld.com/article/3326521/microsoft-edge-chromium-macs.html

[8] Google Inc., Annual Report (Form 10-K) (Dec. 31, 2018)

[9] Aamir Siddiqui, Google’s Manifest V3 will change how ad blocking Chrome extensions work: Is it to cripple them, or is it for security?,xdadevelopers (June 30, 2019, 10:05 AM), https://www.xda-developers.com/google-chrome-manifest-v3-ad-blocker-extension-api/

[10] Id.

[11] Id.

[12] Rich Mullikin, Adblock Plus Parent Eyeo GmbH Wins Supreme Court Ruling: Ad Blocking and Whitelisting Revenue Model Declared Fair and Legal Once-and-For-All, BusinessWire (April 19, 2019, 3:13 PM), https://www.businesswire.com/news/home/20180419006363/en/Adblock-Parent-eyeo-GmbH-Wins-Supreme-Court

[13] Ben Williams, Five and oh…look, another lawsuit upholds users’ rights online, Adblock Plus and (a little) more (March 29, 2016, 11:12 PM), https://adblockplus.org/blog/five-and-oh-look-another-lawsuit-upholds-users-rights-online

 

Data Breach Incidents and the SEC

By: Shradhha Patel

Advances in technological software often coincide with a heightened risk of data breach incidents. Interestingly, the Securities and Exchange Commission (“SEC”) can and has brought action against regulated entities for breach of federal securities laws which result in data breach incidents. Such cases have been brought against R.T. Jones Capital Equities Management, Inc.[1] (R.T. Jones), Morgan Stanley Smith Barney LLC[2] (MSSB), Voya Financial Advisors, Inc.[3] (Voya), and Altaba Inc. f/d/b/a/ Yahoo! Inc.[4] (Yahoo). Liability was based upon violations of either the Safeguards Rule of Regulation S-P[5], the Identity Theft Red Flags Rule of Regulation S-ID[6], or Rules 12b-20, 13a-1, 13a-11, 13a-13, and 13a-15 of the Exchange Act[7] for failure to report the breach in filings to the SEC.

R.T. Jones and MSSB were found to have violated the Safeguards Rule by failing “to adopt written policies and procedures reasonably designed to protect customer records and information.”[8] VFA had violated not only the Safeguards Rule, but also the Identity Theft Red Flags Rule, which requires registered investment advisers and broker-dealers to “develop and implement a written Identity Theft Prevention Program designed to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account.”[9] Action was brought against Yahoo, on the other hand, for its failure to disclose and report a massive data breach in public filings for approximately two years after discovering it.[10]  As such, Yahoo was found negligent in filing materially misrepresentative reports following the data breach incident, and in violation of both Securities Act and Exchange Act Rules.[11]

It is noteworthy that all of these cases involved data breaches that happened within the regulated entities. What if the breach involved a privately held third-party software provider whose software was used by regulated entities? While the SEC has not yet brought such an action, it would be interesting to see if they could or would.

[1]  See R.T. Jones Capital Equities Mgmt, Inc., Advisers Act Release No. 4204, 2015 WL 5560846, *1 (Sept. 22, 2015).

[2] See Morgan Stanley Smith Barney LLC, Exchange Act Release No. 78021, Advisers Act Release No. 4415, 2016 WL 3181325, *1(June 8, 2016).

[3]  See Voya Fin. Advisors, Inc., Securities Act Release No. 84288, Advisers Act Release No. 5048, 2018 WL 4627393, *1 (Sept. 26, 2018).

[4] See Altaba Inc. f/d/b/a/ Yahoo! Inc., Securities Act Release No. 10485, Exchange Act Release No. 83096, Accounting and Auditing Enforcement Release No. 3937, 2018 WL 1919547, *1 (Apr. 26,2018).

[5] 17 C.F.R. § 248.30(a) (2019).

[6] 17 C.F.R. § 248.201 (2019).

[7] 17 C.F.R. §§ 240.12b-20, 240.13a-1, -11, -13, -15 (West 2019).

[8] R.T. Jones Capital Equities Mgmt, Inc., Advisers Act Release No. 4204, 2015 WL 5560846, *1, at *1 (Sept. 22, 2015); See also Morgan Stanley Smith Barney LLC, Exchange Act Release No. 78021, Advisers Act Release No. 4415, 2016 WL 3181325 (June 8, 2016).

[9] Voya Fin. Advisors, Inc., Securities Act Release No. 84288, Advisers Act Release No. 5048, 2018 WL 4627393, *1, at *1 (Sept. 26, 2018).

[10] Altaba Inc. f/d/b/a/ Yahoo! Inc., Securities Act Release No. 10485, Exchange Act Release No. 83096, Accounting and Auditing Enforcement Release No. 3937, 2018 WL 1919547, *1, at *1 (Apr. 26, 2018).

[11] Id. at *2.

Loot Boxes in Video Games: A Virtual Slot Machine

By: William Yang

Video games have become a popular culture within our society, with 64% of the US population buying or playing video games[1]. Age is not a boundary as consumers range from those minors below 18 years old to those seniors over 50 years old, playing either on their computers or video game consoles and even their phones[2]. As the consumer base for games goes up, companies begin to employ new methods either to extends its longevity or increase the profits by using currently one of the most controversial systems in video game history: loot boxes.

What exactly is a loot box? Loot boxes are virtual chests that contain items that are in the game[3]. However, what exactly is in those chests is randomized, so you will never know what exactly you will receive until you open one[4]. The items found in these loot boxes typically have a scale of rarity, usually in terms like common to rare to super rare, and with a possibility of getting something you already own[5]. In order to get these loot boxes, players either need to spend time playing the game or spend real currency to buy them[6]. Loot boxes have gained a lot of criticism from people who play games, as well as parents of children who play games, for being akin to gambling as the money you spend on buying these loot boxes may go to waste for not getting that item that players want and thus buying more loot boxes[7].

This is especially prominent in certain games, such as Electronic Arts’, “Star Wars Battlefront II”, in which players can either buy the loot boxes or spend approximately 4,258 hours, or approximately 177 full days, playing the game to get all the items in the game[8]. In other words, in order to fully enjoy the game, which customers bought, they need to put in 177 sleepless days playing the game or pay more for a chance to get the full experience of the game they already own[9]. Hence, many have considered this as a way video game producers attempt to siphon money from kids and “prey on user addiction” by introducing a shortcut known as loot boxes, which are not guaranteed positive results regardless of the money that is used to buy them, which is eerily similar to another act that some people do in real life: gambling[10]. There are horror stories involving buying in-game purchases and using excessive amounts of money attempting to gain virtual items, with one consumer spending over $10,000 in-game purchases of loot boxes[11] and another spending $70,000 on a similar system in a mobile game[12].

How do other countries view the loot box system? Some countries have attempted to limit or outright remove these transactions from video games[13]. Belgium considers loot boxes as “games of chance” and thus subject to gambling laws and Australia has concerns over that “loot boxes may be a gateway to later gambling behavior.”[14] Other countries have maintained a different stance, with Japan considering the items in loot boxes as “prizes” not constituting gambling and United Kingdom considers loot boxes as not gambling as it offers purely virtual rewards[15]. The stance within the United States is not definitive as of now. Recently, US Senator Josh Hawley created a bill, “The Protecting Children from Abusive Games Act,” would attempt to outlaw loot boxes that encourages spending and limit companies from exploiting children[16]. As this is still just a bill, it is not yet law nor is it an official stance of the US regarding loot boxes, thus it is subject to debate. With growing pressure from parents for advocacy and the video game producers for leniency, whether there will be laws for regulations on loot boxes may be in the luck of the draw.

 

[1] 2019 Video Game Industry Statistics, wepc.com (June 2019), https://www.wepc.com/news/video-game-statistics/.

[2] Id.

[3] Ed Chansky & Erica Okerberg, Loot Box or Pandora’s Box? Regulation of Treasure Chests in Video Games, natlawreview.com (July 22, 2019), https://www.natlawreview.com/article/loot-box-or-pandora-s-box-regulation-treasure-chests-video-games.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Michael Rosen, A Modest Proposal for Solving the Loot Box Problem, aei.org (August 9, 2019 6:00 AM), http://www.aei.org/publication/a-modest-proposal-for-solving-the-loot-box-problem/.

[9] Id.

[10] Id.

[11] Ethan Gach, Meet The 19-Year-Old Who Spent Over $10,000 on Microtransactions, kotaku.com(November 29, 2017 5:12 PM), https://kotaku.com/meet-the-19-year-old-who-spent-over-10-000-on-microtra-1820854953.

[12] Daniel Epstein & Miho Inada, Meet the Man Who’s Spent $70,000 Playing a Mobile Game, the wall street journal (March 15, 2018), https://www.wsj.com/articles/meet-the-man-whos-spent-70-000-playing-a-mobile-game-1521107255.

[13] Chanksy, supra note 3.

[14] Id.

[15] Id.

[16] Andy Chalk, US Senator Introducing Legislation Banning Loot Boxes in Games Aimed at Minors, pcgamer.com (May 8, 2019), https://www.pcgamer.com/us-senator-introducing-legislation-banning-loot-boxes-in-games-aimed-at-minors.