Batikas, Claussen and Peukert (2019)
Contents
Source Details
| Batikas, Claussen and Peukert (2019) | |
| Title: | Follow the money: Online piracy and self-regulation in the advertising industry |
| Author(s): | Batikas, M., Claussen, J., Peukert, C. |
| Year: | 2019 |
| Citation: | Batikas, M., Claussen, J., & Peukert, C. (2019). Follow the money: Online piracy and self-regulation in the advertising industry. International Journal of Industrial Organization, 65, 121-151. |
| Link(s): | Definitive , Open Access |
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| About the Data | |
| Data Description: | In the data collection process, the researchers initially identified 736 piracy domains associated with unlicensed content, as well as a sample of legitimate websites with a similar audience size. They selected two comparable legitimate domains positioned one rank above and one below each piracy domain from market research firm Alexa's top 1 million websites. Historical data on HTTP requests to third parties was collected from HTTPArchive. To prepare for matching, a time-varying measure of third-party domain popularity was constructed, considering their appearance across different publishers. Meta information about third-party domains was obtained from market research firms (whotracks.me and Evidon), allowing categorization by service types. The treatment and control groups were defined based on advertising-related and non-advertising-related third-party requests, with nearly half being pure advertising services. Geographical locations of third-party services were inferred from their top-level domains. The resulting dataset contained information on 392 piracy websites, 784 comparable legitimate websites, and their associated third-party services, aggregated at the third-party-domain-snapshot-level, including 487 advertising services not based in the European Union, advertising services within the EU, and 6659 non-advertising services. |
| Data Type: | Primary and Secondary data |
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| Cross Country Study?: | No |
| Comparative Study?: | Yes |
| Literature review?: | No |
| Government or policy study?: | No |
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Abstract
“We study the effects of a self-regulation effort, orchestrated by the European Commission in 2016 and finalized in 2018, that aims to reduce advertising revenues for publishers of copyright infringing content. Data on the third-party HTTP requests made by a large number of piracy websites lets us observe the relations of the piracy and advertising industry over time. We compare these dynamics to a control group of non-advertising services which are not subject to the self-regulation. Our results suggest that the effort is limited in its effectiveness. On average, the number of piracy websites that make requests to EU-based advertising services does not change significantly. Only when we allow for heterogeneity in the popularity of third-party services, we find that the number of piracy websites that interact with the most popular EU-based advertising services decreases by 42%. We do not find evidence that non-EU-based advertising services react to the self-regulation. This implies that only a small share of the firms in the market comply with self-regulation in a way that is visible in our data. We also do not find evidence that the demand for piracy websites decreases due to this “follow the money” initiative.”
Main Results of the Study
The researchers provide a serious of baseline results, and also adopt various methods to test their findings, including a dynamic perspective, tests of the parallel trending assumption, counterfactual analysis, and experiments. In the conclusion section, the researchers articulate their main results that “In this paper, we have evaluated the effectiveness of “follow the money” copyright enforcement based on a private-public self-regulation effort. We use a unique dataset that allows us to observe the interconnections between third-party advertising and consumer tracking services, and piracy websites and legitimate websites. We compare the dynamics before and after the advertising industry, under pressure from the European Commission, has agreed to a self-regulation that aims to reduce the financial incentives for piracy websites. Our results suggests that the presence of advertising services on piracy websites does not change significantly, at least not on average. Once we allow for heterogeneity in terms of popularity, we show that more popular advertising services, i.e. those that are overall more diffused on the Internet, reduce their presence on piracy websites significantly more. We find that the number of piracy websites that interact with the most popular EU-based advertising services decreases by 42%, results from a regression that assigns more weight to more popular third-party services yields an estimate of an average effect of −18%. We show that non-advertising services, out of which a substantial fraction is in the business of collecting, analyzing (and indirectly selling) data about consumers’ web behavior, do not change their presence on piracy websites – irrespective of their overall popularity.”
Policy Implications as Stated By Author
[[Has intervention-response::The study does not make any explicit policy recommendations. There might be implicit suggestions as the authors conclude that “[t]he basic mechanics that we highlight in this paper – coming from important heterogeneity in terms of firm type and firm size, as well as that we don’t find much evidence for spillover effects beyond the European Union –are informative for the design of future initiatives for self-regulation. Although there are differences in the market structure of online advertising intermediaries, online payment and logistics and transportation intermediaries, the overall effectiveness of such measures might be improved by establishing greater incentives to join for small firms, specialized firms, or firms outside of the European Union.”]]
Coverage of Study
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