Follow the Money: Online Piracy and Self-Regulation in the Advertising Industry

38 Pages Posted: 30 Mar 2017 Last revised: 23 Feb 2019

See all articles by Michail Batikas

Michail Batikas

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management)

Jörg Claussen

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Christian Peukert

Universidade Catolica Portuguesa

Multiple version iconThere are 2 versions of this paper

Date Written: February 22, 2019

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

JEL Classification: K4, L5, L8

Suggested Citation

Batikas, Michail and Claussen, Jörg and Peukert, Christian, Follow the Money: Online Piracy and Self-Regulation in the Advertising Industry (February 22, 2019). International Journal of Industrial Organization, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2943531 or http://dx.doi.org/10.2139/ssrn.2943531

Michail Batikas (Contact Author)

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Jörg Claussen

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Christian Peukert

Universidade Catolica Portuguesa ( email )

Portugal

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