Digital copyright and the "new" controversy: Is the law moulding technology and innovation?

This exploratory article sets out to examine if and how the new digital copyright laws in the U.S. and Europe are affecting innovation on the Internet. It argues that these laws, in balance, at least to date, are having a positive effect on Internet innovation, despite the strident argument that these laws will inhibit innovation. The innovations the article discusses are peer-to-peer (P2P) file sharing technology and the new business models for music retailing that P2P has spawned. It concludes that digital copyright laws could create perverse incentives for innovation and wonders if legislators may not require a better understanding of the innovation process when crafting IP laws. (c) 2005 Elsevier B.V. All rights reserved.