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Follow the money: Online piracy and self-regulation in the advertising industry

Michail Batikas, Jörg Claussen and Christian Peukert ()

International Journal of Industrial Organization, 2019, vol. 65, issue C, 121-151

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.

Keywords: Piracy; Copyright enforcement; Online advertising; Natural experiment (search for similar items in EconPapers)
JEL-codes: K4 L5 L8 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:65:y:2019:i:c:p:121-151

DOI: 10.1016/j.ijindorg.2019.02.001

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