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This chapter examines the interaction between automated, algorithmic markets and fundamental legal concepts in securities regulation, an area to which policy-makers have devoted little attention. Recent advances in communication technology have facilitated the rapid rise of algorithmic trading and automated market mechanics. This chapter surveys eight framework notions critical to regulation and discusses how these might apply in an automated marketplace. Specifically, it examines reasonableness; strict liability; foreseeability; contribution; scienter; damage and harm; evidence and proof; and disclosure and information dissemination. This analysis reveals how deeply-held assumptions guiding regulatory law sit uneasily in today’s complicated and fast-paced markets.

This chapter explains how the transnational regime uses search engines (especially Google) and domain name registrars (specifically GoDaddy) to throttle access to infringing sites. It traces efforts by the U.S. and U.K. governments, along with rights holders, to pressure Google and GoDaddy into adopting the non-binding agreements. It then presents two case studies. The first discusses search engines’ regulation of search results linking to infringing sites and a non-binding agreement struck among search engines (Google, Yahoo, and Microsoft) at the behest of the U.K. government. The second case study examines GoDaddy’s efforts to disable so-called illegal online pharmacies that operate in violation of U.S. federal and state laws. The chapter concludes that Internet firms’ practice of using chokepoints to dissuade access to targeted websites is highly problematic as legitimate websites are mistakenly targeted and sanctioned. Automated enforcement programs exacerbate this problem as they significantly increase the scale and speed of rights holders’ enforcement efforts without a corresponding increase in oversight.

eBay and Taobao represent a different dimension of the private transnational anti-counterfeiting regime. These marketplaces are legally operating marketplaces in which some individuals illegally sell counterfeit goods, which differ from infringing sites that may have few, if any, legitimate activities. eBay and the China-based Taobao marketplace have been subject to considerable government and industry pressure to strengthen those enforcement efforts outside legislation and judicial orders. This chapter examines two little-known informal agreements. In the first, eBay agreed, at the behest of the European Commission, to work with rights holders throughout the European Economic Area to crack down on the online sale of counterfeit goods. In the second case, Taobao, China’s largest online marketplace, has worked at the direction of the U.S. government and U.S. rights holders to overhaul its enforcement policies. The marketplaces’ strategies of policing their platforms using automated enforcement programs raise challenges similar to those identified in chapters 4 and 5. Rights holders often employ brand-protection companies, part of the larger private security industry, to identify and remove sales listings for counterfeit goods.