Apps for Fraps? ‘Buck That

This past week, Starbucks Coffee Co. unveiled a new electronic payment system enabling its customers to pay for in-store purchases via smartphone application.  The Starbucks Card Mobile App, which works in conjunction with the Starbucks debit card, generates an on-screen barcode at the command of the account holder, which is then scanned at the register to complete the transaction.  In addition, the app is free to download and also allows loyal Starbucks customers to check and reload their Starbucks account balances from their mobile devices.

To some, this whole idea may sound silly.  Not to me.  I think it’s great.  I just downloaded it TWICE.  In my opinion, the Starbucks Card Mobile App is the coolest invention since the Starbucks card.  However, all sarcasm aside, perhaps it’s not such a bad idea.  After all, according to the press release, over $1.5 BILLION were loaded onto Starbucks cards in 2010.

Or perhaps it is a bad idea.  Here’s why:

First of all, no sensible person buys a Starbucks card for him/herself.  Like any gift card, a Starbucks card is a last-minute gift idea for someone you probably don’t even care for.  If giving cash as a gift wasn’t considered tacky, gift cards probably wouldn’t exist in the first place.

Second, perhaps you’re one of those people who actually has bought a Starbucks card for personal use, in an effort to control the amount of money you waste on coffee.  Adding high-tech convenience to the spending process probably isn’t the best idea, is it? 

Finally, think about how stupid you’ll look when you initially pull out your credit card, say “Oh-oh-oh WAIT!”, pull out your smartphone with your other hand, struggle to find the app, realize your Starbucks account has a zero balance, and end up paying with your credit card anyways.

Having said all that, if anyone can make it work, it’s probably Starbucks.  Why?  Well, because they seem to make everything work.  Personally, I think that Café Bustelo's coffee tastes just as good, if not better, but where do I go for coffee most of the time?  Starbucks.  For me, it’s not even about the coffee.  It’s just a place to go when I need to get out of the house… to study, or to do absolutely nothing.  For others, it’s a place to be seen, to show others that they have “taste” and a keen appreciation for the finer things in life.  I’ll even admit that when I pay $3.00 for a cup of coffee, I feel like a slightly better version of me.  I feel more sophisticated, taller, more handsome, and more intelligent even though I could’ve just brewed the same cup at home at almost no cost.

Last but not least, I should also probably admit that I actually have bought a Starbucks card for myself.  Why?  I guess I’m just one of “those people”.  ‘Buck me. 

Chinese Internet Population Grows, as does U.S. Frustration

According to recent reports, there are now an estimated 457 million internet users in the People’s Republic of China.  Not to point out the obvious, but considering that the entire population of the United States (online or not) is a mere 312 million… that’s a pretty big market, to say the least. 

Wow, that sounds like a great opportunity for U.S. tech firms, doesn’t it?

Not so fast.  Due to a string of strict internet controls implemented by China’s government, U.S. tech firms have found that capitalizing on China’s expansive online market isn’t so easy. 

Huh?

China’s government initially implemented internet restrictions in order to prevent its domestic internet users from accessing pornography and other forms of vulgar and “sensitive” information.  However, as the scope of “sensitive” internet content has grown in recent years, so has the severity of China’s internet controls, perhaps to oppressive levels.  That is, in addition to strict controls over sexually-explicit material, the restrictions have spanned to regulate media reports, social networking applications and any other forms of web-based technology that may facilitate the discussion of topics found controversial or objectionable by the government.

As a result, popular websites such as Facebook, Myspace, Youtube, Twitter, Blogger, and Wikipedia have become inaccessible in mainland China.  In addition, Google (the world’s most popular search engine) has been forced to alter its Chinese search results in order to remain operational in the PRC.

And then?

The predominant U.S. perspective on China’s strict internet controls is that the policies are essentially protectionist, and restrictive to free trade.  As stated by David Drummond, Google’s Chief Legal Officer:

“Internet censorship is really a trade barrier, and is operating that way for U.S. companies that are trying to do business abroad.  If this were happening with physical trade and manufactured goods, we’d all be saying this violates trade agreements pretty fundamentally…  If you want to be part of the free trade community, you are going to have to find a way for the internet to be open.”  

Some even argue that the motivations behind China’s strict internet controls are more economic than social; suggesting that China’s fight against pornography and “sensitive” information is merely a façade for China’s true (and arguably rightful) interests in promoting “indigenous innovation” in high-tech industries, such as software development.  In other words, by eliminating reliance on various foreign technological innovations, it is suspected that China’s true objective in censoring the internet is to spur the growth of its domestic technology sector, perhaps to eventually compete in the global market. 

So what does all of this imply for the global economy?

Well, it depends… I guess we’ll have to wait and see.       

File-Sharing: All the Piracy, None of the Scurvy

This past October, new legislative measures in the United States and across the globe came down hard on the world of internet piracy.  Perhaps the most significant result of the new legislation is that Limewire, the popular and heavily-utilized peer-to-peer file-sharing application, was forced to shut down.  Upon hearing the news, I immediately asked myself the following questions:

1)      What on earth is file-sharing??? 

2)      Will this legislation put an end to internet piracy?

3)      Will this legislation succeed in limiting copyright infringement without obstructing our fundamental rights (such as such as freedom of expression, the right to privacy, etc)?

4)      How are these legislative measures logical?

After consulting with a group of friends who patiently educated me on the concept of file-sharing, its history, and its potential illegal uses, I came to the conclusion that this legislation will likely not spell the end of online copyright infringement.  More precisely, these newly enacted laws will likely do nothing to curtail the practice of online piracy as we know it, at least not in the foreseeable future.  Consider the following points:

• Limewire was initially released in May of 2000, meaning it took over 10 years for the legal shutdown to occur.
• Limewire operates on the Gnutella peer-to-peer network, which is unaffected by the new legislation.  Other Gnutella-based file-sharing applications (such as Ares and Frostwire) are still fully functional and LOADED with great music. 
• Technically, Limewire hasn’t been completely shutdown yet.  Older versions of the software (those prior to v5.5.11) are still working just fine.

Now, assuming the contrary (that these new laws will successfully put an end to internet piracy), would our fundamental rights not be impeded in the process?  It’s hard to say.  Perhaps the fundamental right(s) most relevant to the issue is one’s right to privacy and protection against illegal searches and seizures.  That is, does the government have the right to monitor one’s online activity and/or the contents of one’s hard drive without consent and/or probable cause?  Further, whether one accesses the web from a public or private location, isn’t the internet essentially a public forum?  How much privacy can one really expect?  Again, it’s hard to say.                    

Last but not least, it should be mentioned that the logic being used by our legislators in the fight against internet piracy is seemingly flawed, quite heavily.  That is, rather than penalizing the people who actually commit the illegal acts, our legislators are instead coming down on those who create and distribute the software that may be used to facilitate illegal activity.  To illustrate the point with a popular analogy: Shouldn’t our government then shut down a gun manufacturer and/or retailer each time a firearm is used to commit a murder or some other violent crime? 

Wouldn’t that be sensible?

E-Commerce and Information Privacy: Reward without Risk?

Earlier this month, the U.S. Federal Trade Commission released a preliminary report containing the framework for the possible future of consumer privacy with regards to e-commerce and other forms of online communication.  One notable proposal mentioned in the report is the creation of a "Do Not Track" mechanism that, by design, would allow "consumers to opt out of the collection of information about their Internet behavior for targeted ads."  The mechanism will operate similar to a cookie and will be...

Ok, here's what I think...

In my eyes, at the heart of the issue is not the actual practice of online consumer tracking, but the associated risk of potential breaches in security.  In isolation, consumer tracking is great, and potentially beneficial to both consumers and businesses in the online marketplace.  And what’s not to love about the online marketplace?  Without having to stand up, get dressed, or speak to another person, we’re able to purchase the goods we want and need, quite often at a significant discount.  If that's not easy enough, consumer tracking attempts to simplify the process even further: performing searches and providing suggestions for the consumer, based on previously gathered information on his or her online behavior.

So what’s the big deal?            

Sadly, the world is not perfect, and neither is the online marketplace.  With the advantages provided by e-commerce and consumer tracking, comes the inherent risk that the confidentiality of [gathered and stored] consumer information will be compromised and used for deviant, non-marketing purposes.  Clearly, no one in their right mind wants to become a victim of identity theft and/or any other form of internet fraud. However, as a subscriber to the notion that technology will always outpace legislation, it is my belief that this risk cannot feasibly be eliminated by legislation alone.  Risk is reality; we must accept it and move on.

Another discomforting reality is that identity theft and other forms of information leakage are not unique to e-commerce.  For example, in 2008, the parent company of Sweetbay Supermarkets fell victim to a security breach in which 4.2 million credit and debit card numbers were compromised, with nearly 2,000 cases of fraud eventually being linked to the breach.  Essentially, whether one chooses to engage in e-commerce or not, no consumer is truly safe in the current technological climate.    

Not to say that consumer protection laws are a completely lost cause, they are certainly necessary to at least mitigate the dangers of identity theft.  However, considering again that technology is usually a few steps ahead of legislation, can consumer protection laws really be that effective without slowing down business?  Probably not, and just because our lawmakers can’t prevent fraudulent acts from occurring, does not mean that they should prevent businesses from engaging in innovative and essentially harmless marketing practices.  E-commerce is a two-way street: Businesses and consumers share the benefits.  Shouldn’t they share the risks as well?        

All in all, the relative truth of the matter is that the conveniences provided by technology and innovation go hand-in-hand with the drawbacks; they always have, they always will.  In today’s so-called post-privacy society, the identity and personal information of internet users will never be 100% safe.  To enjoy the rewards of online communication and e-commerce, one must be willing to live with the additional risk(s).  Don’t count on legislation to change that anytime soon.