The big selling point for capitalism is usually “innovation and progress.” When folks compete in a free market, they try to make the best product at the lowest cost, and thereby win the customers and the money. The market rewards those who can find new ways to make a product more efficiently, or who can simply provide a better overall service. The winner is the one who can do the best job, and when your society is full of the best possible products and services, everyone is a winner.
But economists never count on some of the alternative strategies available. Sure, you can try to win more customers by making a better product—or you can surround your competitor’s store with lava. That’s another way to win.
Cheese or Cheating?
In the CS:GO quarterfinals of DreamHack 2014, Fnatic was losing a match to LDLC. Fnatic stunned the audience—and even the shoutcasters—when they performed a previously unknown “boost” maneuver that allowed them to see most of the map. Using this vantage point, Fnatic went on to stage an amazing comeback and win the quarterfinals round. LDLC filed a complaint with DreamHack administrators, arguing that the specific “boost” performed was not legitimate. DreamHack administrators eventually agreed, and determined that the match should be replayed (Fnatic declined to replay the match and LDLC advanced to the semifinals round, eventually winning the tournament).
The legitimacy of the boost remains an extremely controversial topic. Some argue that players should be permitted to do anything that the game allows them to do, provided that they do not modify the actual code of the game. Others argue that the effect of this technique gave clear evidence that it was a game flaw (to those who are familiar with the game), and Fnatic should have known that its use would not be permitted by the tournament rules. (Specifically, the use of the boost made some wall textures transparent and the boost was considered “pixel walking.”) Along with a lot of implications for game developers and esport tournaments, a central question here is: what is the difference between cheese and cheating?
Cheese is the use of an unorthodox or surprising strategy or tactic to attempt to win a game in a way that avoids the standard methods of play. It is often considered bad manners or unsportsmanlike, but finds some level of tolerance in competitive game play. (Cheese strategies are prone to backfire badly, as they often require a very drastic “all-in” decision which leaves little room for recovery if not successful.) Cheating also avoids standard methods of play, but does so through a violation of established rules.
Data Capping or Kneecapping?
Comcast supplies cable as well as internet. Thanks to the smorgasbord of entertainment options available on the internet, people don’t need 17,000 cable channels when they want to engage in one of America’s most popular past-times: doing “nothin’.” Many Americans are cancelling their cable subscription services (“Cutting the Cord“) because they can get the entertainment the need from the internet. Comcast might have noticed the drop in their cable subscriptions, because they started imposing data caps on some cities. The effect is that people can’t watch unlimited Netflix if they only get 100GB/month, so they have to go back to cable if they want to watch shows and movies. Comcast is using its power as an ISP to “leverage” its revenues as a cable provider—not by making its own product better, but by interfering with its customer’s ability to access a competitor’s product.
So, is Comcast bending rules or breaking them? There is no law against ISPs imposing data caps on customers. Comcast’s merger with NBC-Universal was approved by the Department of Justice. Comcast’s market conditions are not like the capitalist’s ideal free market: Comcast has the incentive to interfere with entertainment-content providers, and they have very few competitors who would prevent them from doing so. The effect might not be the kind of innovation that capitalists hope to see from competition, but it’s still led to an innovative way to undermine competition.
I imagine that either the FCC or the DoJ will have to examine this behavior and decide whether this constitutes a violation of antitrust law or is unduly harmful to consumers. It seems easy to make the case that it undermines innovation and competition, but because these regulators have approved all of the conditions that caused this activity, it will require a lot of regulatory untangling to explain why the natural result of several legal decisions turns out to be illegal.