Classroom Companion: Business

 
Chapter 22 · Digital Regulation

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22
Regulating the digital economy—or a specific sector, domain, or market in the 
digital economy—can be achieved by using a combination of the four modalities. 
The principle is shown in 
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Example 
22.1
 using the music industry as example.
 
► Example 22.1 The Four Modalities Applied to the Music Industry
The regulation of music piracy is used as an example. One key problem in this industry 
is the violation of copyright and illegal downloading and spreading of music on the 
Internet. Such actions were made possible by the ubiquitous use of the Internet com-
bined with applications or websites such as Napster and 
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MP3. com
. This was a major 
issue in the 2000s and still is, however, with less intensity today since a combination of 
the modalities described above has been employed to regulate the issue.
Regulation by Legal Measures: In many countries, downloading copyrighted mate-
rial is illegal by law. People downloading and sharing such material may be prosecuted 
and punished according to the laws in their jurisdiction. This is an example of legal 
measures in Lessig’s model to regulate software piracy.
Regulation by Market: In the 2000s, new services offering access to copyrighted 
media were launched—Spotify, iTunes, and Tidal. These services created a market for 
legal access to music and contributed to regulating the market. This is an example of 
regulation by market.
Regulation by Technology: The 2000s also saw the emergence of technological copy-
right protection of music and other media by which copying a specific CD or DVD was 
not possible. This is the use of technological measures to regulate piracy.