car salesman knows your preferences and what you are really looking for. a you want to get into market exchange were you give a lower price or try to have an equal value, the dealership actually knows you really like this red model and have looked at it 20 times in the last week to read that is the one you want. that creates an unfair interaction between you and the marketplace. the other example is more recent. we are looking at companies that offer different prices in different locations, so we found staples would offer different prices for staplers based on how far you were from a competitor's door. if it was a further for you to drive to this competitor store, further fort was a you to get to the store, they

would give you a higher price. some travel sites would offer different prices for rentals based on the type of devices you connect with. if you are an ipad user, you get a discount or sometimes if you are a mac user, you get a higher price. is generally trying to make -- this goes to some of the stuff around credit card offers. discover would offer different introductory offers to different consumers based on whether they come from certain locations are different profiles of their activity. using data from an individual perspective, there

is an asymmetry where people who tod this data are able approach the market place with a benefit on their side to extract the maximum price a consumer is willing to pay. first-degree price information will allow you to extract all of the economic surplus subject to the data holder. if i know your willingness to pay for something, i can charge you that regardless of whether someone would be willing to promote -- willing to pay lower than that. >> in my view, it gets to the harm question. the harm story with add

matching is not as obvious. another,ne at verses it's not clear how he might act on it. but you are paying more for that car. even though the economists in the room might think it is still efficient merely because all of the surplus goes in one direction verses the other. from a consumer's respect -- from a consumer's perspective, you are being harmed by paying a higher price except you are being harmed on the basis of your information. up idea is you are giving information on yourself and that information is being used in order to harm you in a concrete, economic way. , it mayea changes true improve our arms story to a large degree. the challenge is most

consumers don't realize this is going on. said this is our best price or this is our lowest price. consumers don't realize that and symmetry is in place know what my willingness to pay is an willing to extract that for full value. let me turn to our three panelists and you can go in any order you want. general comments? i heard a couple of things -- ryan's persuasion profiling and the ideas that the ad market or profiling market is changing and getting more sophisticated and starting to focus not on whether

ryan is a democrat or not but what is going to be persuasive to you. change what you see so that you see the authority coming from a friend or coming from an expert or whatever. guys focuseard you prey we are beginning to on psychological weakness or psychological by cs. maybe information asymmetries' are being exacerbated that not diminished by all information. the seller is beginning to know so much about you that they did and it feels are unfair. that is the thrust there. comments anybody from practice,

from your perspective at facebook? shouldre i start, i thank you for inviting me here. it's exciting and interesting program and having these discussions with people from a lot different perspectives is valuable to help us figure out what the right way is to address these topics is. >> i think where i want to start in theirhlight a theme remarks earlier today which is around the idea that i would call transparency. you talked about as asymmetric, but it is the same thing. there is nothing inherently bad about inflation and there's nothing bad about going to a car dealership and buying a car.

what you are focused on what a lot of people are focused on is people don't necessarily know how that's happening and they don't know what is going on. i worked at facebook and that is something we think about. when we target ads, we have a privacy policy that goes into that but we try to be clear with information weat have and what information we are using for that purpose. i think it is important to do that and important to have transparency into the way it is being used and what that ecosystem looks like. i think that is probably an important place to start. what is the right way to communicate that? i don't think there is a single answer that works across the board. as we continue to think about

it, that is what i heard and i think it is important. i know you have done all lot of work looking at harms and i think that is important to think about, how we regulate or self context, whenever the is. but when you look at things like price discrimination or i try to get a mortgage and because somebody thinks i'm a specific category, i get a higher or lower interest rate. play in that space, so i'm limited in what i know about it. but what you're talking about is there are things that are going on, there's discrimination going on and we have discrimination laws. one thing that is important as we look at these issues is what is on the good side of the line and bad side of the line.

it's not technology specific. his not that you are using a web site or that you provided information in an electronic way. we have information are concerned about and a lot of cases, we have existing laws to address that. but that is an important point i want to highlight. at those things, the transparency addresses a lot of the issues and people understand how it is being used. if they can have the ability to control it and that companies that make that claims are being transparent are held accountable, those are the building blocks of with the path forward is. to do allk, we try those things and be clear and we can certainly talk about that. intended toare

synthesize the remarks we have heard so far and highlight the past is there. she -- should there be anything about why did i get this price? >> i think it depends on the context. it depends on a lot of things. we have to draw a line somewhere. in some of your work, you have talked about information being used to show different offers in different contexts. targeting ads, you come to facebook and say you are a male who lives in washington d.c., we show adds to men in washington d.c.. you are getting ads that are more interesting to you rather than a restaurant in san francisco that he may not patronize. i think there is value their.

ason't think that it's bad four different kinds of products just on the basis of those categories. when information is being collected, you should know how it is being used and that is important. i have of paper i just wrote that came out this year that says we should be doing notice better and not abandon it as a concept. really facebook has some innovative approaches. i think the view ads, that you can target and add to yourself, i think that is great. of the benefit side of the ledger, the fact we can't unpacked people the way that we can do also means we can give them better notice. somebodyderstand how

takes, you can convey information in a way they will understand. if they are a visual learners, you can show them in a visual way. but there are two kinds of incentives i worry about -- yet regular targeting and super add targeting, if you have this persuasion profile and it is more lucrative, there's going to be a market incentive to move it to the persuasion profile. maybe transparency can correct that problem. it turns out many of these techniques, if you tell people you are doing it, it doesn't work. imagine -- nine out of 10 experts agreed to buy colgate. we told you that because you are a sucker for experts. that doesn't work. the incentives for disclosure are not going to be terribly good. hopeful about the role of

transparency. i am assuming when you are talking let the car dealership, getting all of this information, you say the physical car dealer knows what you were doing online. transparencyt is or fear? you don't know that they know that you have been on their web site. know youaid you, we were on the web and you like that read model. but does thatork, solve your problem or does transparency not get you there? this is not because you are online. the way that web browsers traditionally deal with third parties, of third parties you

don't have air action with gives rise to a larger amount of data available about you to be used for these types of purposes. one of which is when you visit iss.com, a third party recording that activity and thatng it to a dealership he physically what into. it doesn't really strike you. maybe transparency might help here in terms of educating people and making sure they understand. there are all of these context falltions where it could you into a store and car dealership, that might help, but the earlier point i briefly

touched on, the level of sophistication is much higher than on the consumer side to understand these things. maybe that is the fault of the market, but by understanding always my data is tracked and monitored, i might be able to get a $100 price benefit when buying that car. on the dealerships' side, for all the thousands of people they do this and sell cars to, it's 1000 times $100. they will always have more incentive to do this better and more sophisticated way and but time and resources into the sophistication of how this system works and i think consumers will have the incentives to dig into and this is where i think transparency would fail. for you to comprehend all the

way this happens, i don't believe that's the and all solution. with respect to the transparency issue, as i'm listening, and thinking what i used transparency what to charge you a higher price on the car? that would be the deal killer. notice hasbout how got to be at hand and the notices are excessively long which keeps most of us employed. awould much prefer to write shorter, more synched policy that makes more sense to individuals. when we have to get so granular and all the uses of date of this way, it is perplexing and difficult. and noticed isy key, but how much do you drill down.

the benefits to the merchants and benefits on the individual consumers is going like this. point, where we are talking about the persuasion profile, we are now going like this. >> let me go back to what is wrong with all of this or what is the harm exactly? because myotiation interest is in how markets are moving in changing. i worked in a rug dealership in istanbul. a rug dealer in istanbul to look anyone in the audience and say they know where you are because of the brand of shoes you are wearing and they're incredibly sophisticated at targeting prices at tourists.

why? because that is how they make a living. the tourists have no idea. get off the cruise ship and they think they're getting that same price as the next them tourists. but there are not. neither is the person who walks into the car dealership and old world. a look at the car that you drove in on and all sorts of things to figure out who you are and what you are going to pay. what is different? >> that's an excellent question. i was trying to frame that you speakrness, but of a man vs. machine type of a rug dealere might have 20 years of experience, but he is still one guy and it's my wits against

so i know how to negotiate. but if it turns out it's him and all his friends and all the airports on the cruise ship that i have gone to and what my negotiation tactics have been in that context, then it feels like it is out of balance. thelevel of disadvantage purchaser is put in is quite a bit more. >> a quick question about whether you think technology -- you are talking about aggregating data across sellers and the benefits that provides any advantage that provides to them. is there a market for or do products are the exist that allow consumers to better

educate themselves and determine what the sellers are doing? your car sales analogy seems like a perfect one to me because 20 years ago, you could not get online at look at the invoice price and manufactures special retail price and what the last 10 or 15 car sales in your area were. for a highly valuable transaction like that, i'm in a much stronger position than i was 10 or 15 years ago. i don't negotiate with the car dealer anymore. i tell them what a great deal is because he just spent 15 minutes and made a sale. a great paper on this about contracting in the age of augmented reality. the notion that consumers are empowered to do the kind of price comparison you could never do before. >> you didn't know that. >> how did you establish the price you are going to pay me?

that said, what we have is an arms race. i'm going to go with huge, big companies as winning that arms race. i think there are stories you can tell with the confines of economics. imagine a situation where if i or $1 and thatto third party is going to spam me so much it's going to take $10 of africa. my privacy is worth $10, and i gave it up not knowing anything for $1. my privacy did not go to the highest value the user. i'm the highest value user and i did know it and give it to a lower value user. the rug dealer example, to compare that to the

work at stanford, where they talk about how persuasive computers can be because of ,ertain advantages they hold they never get tired. they can change their parents and they can avail themselves of all the same techniques an individual person can do. computers can be persuasive and the way we are persuasive. one anecdote and i will give up the microphone or maybe it will wander away from me. think about this one example. we are more likely to talk about ourselves to people who talk about themselves. computers -- there's a study suggesting if a computer says i was made in 2005, when were you born? you will be statistically more likely. if you compound that with not

only can i know people are generally susceptible to if you tell me something, i tell you something, i'm able to get individualized information about your biases. maybe that doesn't work on you but maybe something else does. i absolutely love that paper and i think there is a helluva lot to it. about anlked a lot economic model for innovation and trading on privacy. how do you value the inherent companiesovided by that have services -- they used free e-mail, free of facebook pages and the reason they are able to do that is because maybe with some degree of knowledge, consumers have decided they want to be on that site and it is worth it to them to receive an

ad. how do you figure that into your economic model? >> the benefit of platforms like facebook and the fact you get all of this amazing context for free is that we should be thinking about how important and valuable this. conclusion, logical it would suggest we have no conclusions whatsoever. there has to be a point at which you draw a line. no matter how valuable it is, milk is a valuable, but we don't let people but are stake in it -- we don't let people put arsenic and it. you don't go to mill can say it's valuable -- there has to be a limit between the two. >> on going to make it others shameless pitch. economics heret

and it's great. to poll the panel before get to audience questions and pull it out of that economic discussion and into the technology discussion. the commissioner mentioned do not track and we can talk about that and other technologies and innovations you are seeing out there that deal privacy protected to you and that are providing benefits. is a policy control mechanism for opt out. all lot of my work has been on privacy preserving technologies. as built into the browser and a tool to help consumers have transparency.

i don't want to pull back to economics, but for me, it is about incentives. my research shows time and time again, when there are technical tools consumers try to deploy to protect their privacy, the incentive is on the side of companies to circumvent those and this is examples of tracking and these kinds of things, the incentives are on the side to circumvent those privacy enhancing technologies. like a company trying to track something faster, i will be able to defend. >> let me respond to that.

you raise this issue that -- the technology arms race, technology is absolutely part of the picture. of it's not the only piece it at facebook. sometimes people think what we're doing is great and sometimes they don't and enough people read it that people understand what changes we make on our service and people understand when we evolve and people understand what we don't. bepanies are always going to one step ahead. thatve an incentive to do and if we work to what you are day,g, at the end of the it's because people will trust us. what you aree in saying, but there's another piece to it. we have an incentive and people

realize we're trying to overcome their preferences in a consistent way. i will bess plug -- reading on the plane -- my a shameless plug is you asked about privacy technologies and one of the things we think a lot about that facebook is an textual control. this past month, we rolled out a number of changes to our service that built on things we're doing to make sure people have privacy controls and information that makes sense. we have what i think is a good privacy policy. aware of another company that does this, but maybe there are. when you post, you have a choice

to is going to see this. you have the ability to type and what you want to do and we bring you to explanation of how you want to a company that. when we are thinking about technology and context of what we have been talking about, at a place where it is a meaningful, it is something we have tried to do. >> some going to push back a little bit. in those disclosures, one of the issues in one of the cases i worked on, when you said -- when you provide tools to limit the sharing of animation, your definition of public was different from everyone else's definition of public. friendsrestrict mind to

and only, but there is all of as companiesions innovate and perhaps there is a hiccup. this is a sophisticated audience and people understand the controls and the tools, but do people understand facebook through this mechanism shares information not just in the facebook context, but you match up information from offline purchases to measure the effectiveness of ads. onlines the offline- enhancement stuff. i'm not familiar with any notice on facebook that would make it easy for me to understand my ad impressions could potentially be compared against my offline behavior and used to provide measurements of ads. >> i don't want this to turn

into a session on facebook. to be clear, we have a number of disclosures in a number of react tot i want to one specific thing which is inaccurate. we're not disclosing information to advertisers. i know you understand but i want to make sure that is clear. there are lots of places where we tell people how information will be used but we try to do that in a way that of privacy protected or do it in a way people are not expecting. i don't want to go down that rabbit hole. and tos hard to convey rely on transparency as the incentives are on the side to innovate. the paying customers are advertisers. >> when we were grabbing coffee,

you were talking about changes that seemed beneficial. as i go through and see things that are privacy protected or advantageous, i want to come back to that conversation a little bit. >> one of the things i have been looking at carefully is the development and advancement of facial recognition technology. it has been around a long time and has been used by government entities and of law enforcement. transfer intot to the retail commercial sector and what i see is there are some definite benefits to the use of this type of technology. more customized experience, better customer experience based on some of the customization that can occur. there is always the balance that has to be struck, the creepy

privacy issues and am i being tracked in a retail establishments. there is a scene in "minority report" as tom cruise walks into a gap store and is told based on your purchases, this is what you would like. we are not there yet, but there is direction going there. there are technology manikins that have cameras in their eye sockets that can track what customers are looking at and what brings them into the store and which way they turned and what kind of inflation they are processing. >> that is it greedy because they put them in the mannequin. if they would put the camera and the wall, it would be a little creepy but in the eyes of the american? who sought to do that? obtrusive it is less

and you get closer. holes where these the irises and if you want to keep looking. keep going. well andare cameras as it used to be cost prohibitive. but it's now becoming much more cost-effective. $800 a month can get you these cameras in the store that can process what people are looking at a gathering this information. the information is interesting because it goes to the notion of general tracking, jenrette -- gender a proximate age verses the actual person. this is joe smith that he was here and he was in our other and when you town are tracking individual verses regular transactions, there are some advantages from the

commercial perspective to assist the customer in the commercial experience. made andhas to be there has to be disclosure as to what is happening and what is going on and how that need to be so people can evaluate. that store as tracking, maybe i will shop there. is that what's going to happen? if the information taken from the store is used to set up where the sales rack is -- how people track within the store and different deals, that could be beneficial to consumers. i find it fascinating. with a basic question of is it a benefit or a negative where your counterpart in the transaction, any kind of seller can know more about you to know who you are.

at some point, the turn of information over the last decade has caused a lot of inaccuracies. i've heard a lot of you talk about if a seller think you are one kind of person that you are a different kind of person, that could be bad for you. you actually have an incentive to tell the more about yourself so you get the good credit card. it is moving into the offline space. we're moving into the do not track or yes, please track in the car dealership or in that gap. you know what i mean. the proverbial gap. i want to go to questions from the audience. our tradition is to start with a question from a a student. it looks like we have one. microphones. we have to be disciplined. in the back.

do we have more than one microphone? how exciting. my question is back to the rug dealer. the drug dealer, it still like there are two different ways to look at privacy. as privacy is the interest being heart -- being harmed. if my privacy is a violated, and being harmed. privacy is the aggravating factor that makes me harm. the regular is doing the same thing. you are going to do more. if you are going to look at the red one, they're going to charge more for it. the price is the harm, but it was obtained through a privacy

breach. somebody paying more than somebody else doesn't seem like a harmony traditional sense. am wondering what you think what the actual nature of the harm or is there an underlying change being made worse by privacy? >> i think it is an ongoing difficult quintessential question, whether or not there is some kind of intrinsic value wrapped up an autonomy or whether privacy is a stand been for other values. i come down on the view that doically, privacy has to with that consequences of being observed. those consequences can be material in the sense that you

get a worse price or they could be psychological in the sense that you experienced discomfort and what ties privacy arms together is the fact they are tied up in observation. other people in this space have wildly different views about it. i do think there should be harmed. i think courts and regulators really should not interfere with practices in the absence of harm. but we have been awfully stingy in our interpretations of harm and part of the concern is there is no limiting principle. once you get beyond economic harm, you start to get into continental philosophy. taking a crack at trying to expand the notion of

harm and at the same time expand the limited principle. i don't know what you are asking, but that's my view. the big hook is around opaque discrimination. that dealership example, if you have a coupon that you are willing to jump through hoops, you have the option of getting a lower price if you want to go through. you want to, you have that choice that you can't enact the changes that will give the that price, but because you are wearing a purple shirt, because of some attribute that is intrinsic to you, you must get this price. there must be a sense of self -- sense ofself or

identity. in the u.s. perspective of everyone is equal and fair, that feels like discrimination. we can't externalize it or do anything about it. is that the individual doesn't know why they're getting the price because one thing we are leaving out of the analysis is the consumer can walk away if they are not intrinsically happy with the price they're being offered. that has got to be -- youhere are harms that experienced directly and viscerally. of the dressing room and you are startled by the vatican with the camera eyes and you feel uncomfortable. there are studies about the influence of how people feel

uncomfortable buying certain items when there is a camera trained on them. are sot that they anthropomorphic would exacerbate that. that has nothing to do with whether you have seen the price or not. to is to it feels bad be observed. sometimes you wonder about what's going to happen. we are worried because our credit score is wrong not because we've been denied an opportunity at that moment but because we are concerned we might be denied an opportunity down the line. there is a psychological dimension, but if you know what can get up and walk away, it is hard to tell harm story. i assume you would agree that has to weigh benefits against time. go away in the back.

>> substantial injury is this a key to unfairness? a practice that causes substantial injury that's not outweighed by countervailing benefit and consumers themselves cannot avoid it? you have been talking about price discrimination which might be referred to as variable pricing. i find that an interesting example because the flip side of every person who pays more is some people pay less. in fact, the overall system could be a lot more efficient in an overall sense and the first quarter but also in the sense that if you have a rule that says smokers pay more and non- smokers pay less, it's not that some people pay more and some people pay less, but the rule

itself make society better off because people are encouraged to stop smoking. when you are talking about harmon you are talking about benefit, how do you deal with the differences between a potential harm to one individual that might be outweighed by benefit to another individual versus the overall collective assessment of harm and in that sense, that's not just a hypothetical concept. to consumers or to competition -- they have a sense this is collective. how do you deal with that? >> there are a bunch of tentative hand's going up. as anyone want to take a response to that? we talked about the harm from discrimination in general and

discrimination people are not aware of. the other things to consider is that while in perfect pricing, you have one individual who pays more and one who pays less. out priced the commission, you have what becomes an economic surplus that goes to a social surplus. the people willing to pay more but will end up paying less because the company has to price something where they will . ll a maximum number this is like economics 101. the price curve. as you start adding points, you start taking the people who were originally willing to pay more but ended up paying less and the money that comes from that ends up going to the merchant. that is how i frame that economic harm from perfect

pricing. >> i think the idea of harm that comes from a great mission as theout that fact that consumer rather than a system -- what i found the lack of --islation rhumb privacy, it's the nature of asymmetrical or non pervasive threats. to electgh uncertainty legislators not move quickly. i would like to come back to what been said about south

america and how we have some different viewpoints on this topic. my view point is i would like to hear a lot more about privacy as a system. want unbiased access to information. it as much from my republican friends as much as my democratic friends. one -- i read the army has an investigation into bradley manning. i think we are assuming there is the corporatey to environment and state environment. >> let me ask you to get to a

question because i have a bunch of other hands. >> the question is, is this merely just an economic forum are wet for consumers or addressing citizenship? the filter bubble question, the larger implications of what we have been talking about. >> and is trying to think about which part of the question you would like me to try and address. i agree with you that there is a risk of letting yourself to an economic model and look in at these issues strictly through the lens of purchaser-consumer. i think that is the orientation of this particular panel and

that may be why there is some of that focus. in a more structured relationship between government and system, there is a lot more positive law in place that governs the conditions under which someone can conduct a wiretap or obtain information from a telephone service provider, that kind of thing. places limitations in the ways that people in position and that people have received information from the government can disclose that information to round out the bradley manning comment. i agree we need to be looking at all aspects of this issue and privacy as a citizen is equally as important as privacy as a consumer. the focus is because that is where the panel went, not that any of us think that aspect is less important.

>> where is the microphone? >> hold up closer to your mouth. about the a question andlarity of notice [inaudible] it would somehow be okay and in some cases, it's still not ok.

[inaudible] if you want to give people notice, how do you give them meaningful notice so that they are learning what they should be learning from your notice? over and the company really wants to give you notice to provide exactly how much information they want. you want to share because you know they are really good. , you wantthe outside to scare them may be said they don't talk too much.

the time you are explaining you are are doing, getting to the transparency paradox. how do you explain what you are doing with the data? how do weion is continue having hope in something like transparency says that you are arriving at some kind of socially acceptable way of telling people what they need to know? are a number of interesting points embedded in your question. let me try to address those. the first one i want to talk about is this idea of incentives. to company's incentive is

give information that causes the maximum amount of information. think case, i don't that's exactly right. we want people to share it. that's what our services for and a lot of people use of for that service. we want people to be comfortable and feel like to have a good understanding. if they feel uncomfortable, they will opt out and the things we built will be useful. it's more complicated than just say we want people to have comfort. we want people to have comfort so they're willing to use our products but we want them to feel like they understand what is going on. that leads to your second point which is there are a lot of ways to provide notice. we can argue about how much notice to give and what context, but i tend to believe there are a number of different ways to provide information and people will look for different amounts

of information in different ways. our approach is to try to provide information in as many ways as we can think about that scales to the way people look at it. there is not a perfect answer to this. answers not a perfect because there are lots of different ways that information is used and a lot of different preferences. consumers consumer information and people consumer information and lots of different ways. it is the right question to be thinking about. smart and ife are we communicate with them, they will make decisions that are right for them. i agree there is a paradigm where most people if you explain it to them can make the decision that is right for them. as a society, we've made a judgment that some things are not ok. racial discrimination is not ok. even if you disclose it, it's

not ok and we have to figure out where that line is. if you give people a meaningful choice, people can make a good one for themselves. >> week just measure comprehension. you can measure and two have talked but we about there are ways to measure comprehension in privacy practice. is the practice, the disclosure, and you can measure what people take away from whatever, whether it is their videos or whatever. measure it but there's not get the incentive to. let's come down to the front right.

if you could stand up, that would be helpful. the mannequins can zoom in on the better. we about discrimination -- have laws that this -- that private discrimination based on race, gender, sexual orientation, but there are no discrimination laws that prohibit discrimination based on toring a purple shirt or accept authority. my question as whether you think the discrimination law has inome of data or maybe sufficient or if there is a method for them to become much more granular.

realistically, it could be infant. -- it could be infinite. know if't discrimination laws are the right place to locate this. there are a couple of different moves you can make. one is around better transparency which has the quite -- has the kind of limitations and there is strengthening privacy laws they have more control over your information so once you know what to do, i give you those choices. i can't say it's much developed, but there are a lot of places in

the law where you are imposing a duty on one party of fair dealing. the reason you are doing that is very often around information asymmetry. your broker knows a lot about your financial situation. are in thehat you market for and there incentives are such that the of more you . y for your house, the better we don't save write down every single limit of what this fair dealing means. we'd backfill that with a common-law system. there's a legal apparatus in place. ammunition me more against scott on the rug vendor, not that we have anti- we don'tation laws,

prevent that because we are not able to do so. and suddenly we are able to do it. that's why the analogy is imperfect. does that make sense? >> i think we have time for one more question as long as it is short. when we come to the middle here. >> one of the things technology has given us is a memory. if the analogy is ephemeral and disappearing, their arms and benefits associated with that, but what do you think the policy implications are? we don't have a place for somebody who just happens to keep really accurate records on

things for a large set of data. anybody want to take a crack at that? >> >> nothing is shocking. skeletons in have their closet. we will all have this long history of activity that people can make decisions on. we might propose limitations on what things we can make limitations about. this is one outcome. while there around is this memory, some people are better than managing than others. some parents will not allow their kids to post on facebook or do certain activities at an early age.

manicuredave a better manage a digital based on ability to manage this stuff. we might get disparities' often opportunities based on how well they were able to manage their profile in the past. >> that is my thinking. >> i think it is time for lunch. i want to say thank you to the panel. lunch is three those double doors. we reconvene at 12:30. have one hour. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> the sequencer will reduce our roughlyy about 5% which

equates to $22 million or so which will be distributed among the various licensees and stations that i have described. a 13% andken about are finding other the past few years. the entire federal government the cutsined a cut -- to be $500 million smaller. we feel we have made a substantial contribution to this within our own contacts. >> the impact of spending cuts and television. >> and next to the supreme court hears the first of two cases on the constitutionality on same- sex marriage. in the case of this, in the course -- the court considers

the constitutionality of proposition 8 that passed in the november 8 elections, amending the constitution to recognize marriage as only between a man and woman in the state. the court is expected to get a decision by the end of the term in june. this is one hour and 20 minutes. >> we'll hear argument this morning in case 12-144, hollingsworth v. perry. mr. cooper? >> thank you, mr. chief justice, and may it please the court -- new york's highest court, in a case similar to this one, remarked that until quite recently, it was an accepted truth for almost everyone who ever lived in any society in which marriage existed -- >> mr. cooper, we have jurisdictional and merits issues here. maybe it'd be best if you could begin with the standing issue. >> i'd be happy to, mr. chief

justice. your honor, the official proponents of proposition 8, the initiative, have standing to defend that measure before this court as representatives of the people and the state of california to defend the validity of a measure that they brought forward. >> have we ever granted standing to proponents of ballot initiatives? >> no, your honor, the court has not done that. but the court has never had before it a clear expression from a unanimous state's high court that -- >> well, this is -- this is -- the concern is certainly, the proponents are interested in getting it on the ballot and seeing that all of the proper procedures are followed, but once it's passed, they have no proprietary interest in it. it's law for them just as it is for everyone else.

distinguishable from the california citizenry in general? >> they're distinguishable, your honor, because the constitution of the state of california and its election code provide, according to the unanimous interpretation of the california supreme court, that the official proponents, in addition other official responsibilities and authorities that they have in the initiative process, that those official proponents also have the authority and the responsibility to defend the validity of that initiative -- >> i guess the attorney general of this state doesn't have any proprietary interest either, does he? >> no, your honor, nor did -- >> but he can defend it, can't he -- >> nor did -- >> because the law says he can defend it. >> that's right, your honor. nor did the legislative leaders in the karcher case have --

>> could the state -- >> any particular enforcement -- >> could -- could the state assign to any citizen the rights to defend a judgment of this kind? >> justice kagan, that would be a -- a very tough question. it's by no means the question before the court, because -- because it isn't any citizen, it's -- it is the -- it is the official proponents that have a specific and carefully detailed -- >> well, i just -- if you would on the hypothetical -- could a state just assign to anybody the ability to do this? >> your honor, i think it very well might. it very well might be able to decide that any citizen could step forward and represent the interests of the state and the people in that state -- >> well, that would be -- i'm sorry, are you finished? >> yes, your honor. >> ok. that may be true in terms of who they want to represent, but a state can't authorize anyone to proceed in federal court, because that would leave the definition under article iii of the federal constitution as to who can bring -- who has standing to bring claims up to

each state. and i don't think we've ever allowed anything like that. >> but, your honor, i guess the point i want to make is that there is no question the state has standing, the state itself has standing to represent its own interests in the validity of its own enactments. and if the state's public officials decline to do that, is within the state's authority surely, i would submit, to identify, if not all -- any citizen or at least supporter of the measure, certainly those, that that very clear and identifiable group of citizens -- >> well, the chief -- the chief justice and justice kagan have given a proper hypothetical to test your theory. but in this case the proponents, number one, must give their official address, they must pay money, and they must all act in unison under california law.

so these five proponents were required at all times to act in unison, so that distinguishes -- and to register and to pay money for the -- so in that sense it's different from simply saying any citizen. >> but of course it is, and i think the key -- that'scan you tell me -- a factual background with respect to their right to put theballot initiative on ballot, but how does it create an injury to them separate from that of every other taxpayer to have laws enforced? >> your honor, the question before the court, i would submit, is not the injury to the individual proponents, it's the injury to the state. the legislators in the karcher case had no individual particularized injury, and yet this court recognized they were proper representatives of the state's interests, the state's injury -- >> at least one of the amici have suggested that it seems

counterintuitive to think that the state is going to delegate to people who don't have a fiduciary duty to them, that it's going to delegate the responsibility of representing the state to individuals who have their own views. they proposed the ballot initiative because it was their individual views, not necessarily that of the state. so -- >> well -- >> justice scalia proffered the question of the attorney general. the attorney general has no personal interest. >> true. >> he has a fiduciary obligation. >> the attorney general, whether it's a fiduciary obligation or not, is in normal circumstances the representative of the state to defend the validity of the state's enactments when they are challenged in federal court. but when that officer doesn't

do so, the state surely has every authority and i would submit the responsibility to identify particularly in an initiative -- an initiative context. >> why isn't the fiduciary duty requirement before the state designate a representative important? >> your honor, i would submit to you that i don't think there's anything in article iii or in any of this court's decisions that suggest that a representative of a state must be -- have a fiduciary duty, i would also suggest -- >> well, generally you don't need to specify it because generally the people who get to enforce the legislation of the government are people who are in government positions elected by the people. >> and, your honor -- >> here these individuals are

not elected by the people or appointed by the people. >> and the california supreme court specifically addressed and rejected that specific argument. they said it is in the context when the public officials, the elected officials, the appointed officials, have declined, have declined to defend a statute. a statute that, by the way, excuse me, in this case a constitutional amendment, was brought forward by the initiative process. the court said it is essential to the integrity, integrity of the initiative process in that state, which is a precious right of every citizen, the initiative process in that state, to ensure that when and aftericials -- all, the initiative process is designed to control those very public officials, to take issues out of their hands. and if public officials could effectively veto an initiative by refusing to appeal it, then the initiative process would be

invalidated. >> that's -- historically, i think, 40 states, many states have what was called a public action. a public action is an action by any citizen primarily to vindicate the interest in seeing that the law is enforced. now, that's the kind of action i think that this court has interpreted the constitution of the united states, case in controversy, to say that it not lie in the federal system. and of course, if that kind of action is the very kind that does not lie, well, then to say, but they really feel it's important that the law be enforced, they really want to vindicate the process, and these are people of special interests, we found the five citizens who most strongly want to vindicate the interest in the law being enforced and the process for making the law be enforced, well, that won't distinguish it from a public action. but then you say, but also they

are representing the state. at this point, the dellinger brief which takes the other strong it is making a argument, well, they are really no more than a group of five people who feel really strongly that we should vindicate this public interest, and have good reason for thinking it. so you have read all these arguments that it's not really the agent and so forth. what do you want to say about it? >> what i want to say, your honor, is according to the california supreme court, the california constitution says in terms that among the responsibilities of official

proponents, in addition to the many other responsibilities that they step forward and they assume in the initiative process, among those responsibilities and authorities is to defend that initiative if the public officials which the initiative process is designed to control have refused to do it. it might as well say it in those terms, your honor. >> counsel, if you want to proceed to the merits, you should feel free to do so. >> thank you very much, your honor. excuse me. as i was saying, the accepted truth -- excuse me. the accepted truth that the new york high court observed is one that is changing and changing rapidly in this country as people throughout the country engage in an earnest debate over whether the age-old definition of marriage should be changed to include same-sex couples. the question before this court is whether the constitution puts a stop to that ongoing democratic debate and answers this question for all 50 states. and it does so only if the respondents are correct that no rational, thoughtful person of goodwill could possibly disagree with them in good faith on this agonizingly difficult issue. the issues, the constitutional

issues that have been presented to the court, are not of first impression here. in baker v. nelson, this court unanimously dismissed for want of a substantial federal question. >> mr. cooper, baker v. nelson was 1971. the supreme court hadn't even decided that gender-based classifications get any kind of heightened scrutiny. >> that is -- >> and the same-sex intimate conduct was considered criminal in many states in 1971, so i don't think we can extract much in baker v. nelson. >> well, your honor, certainly acknowledge the precedential limitations of a summary dismissal. but baker v. nelson also came fairly fast on the heels of the

loving decision. and, your honor, i simply make the observation that it seems implausible in the extreme, frankly, for nine justices to have -- to have seen no substantial federal question if it is true, as the respondents maintain, that the traditional definition of marriage insofar as -- insofar as it does not include same-sex couples, insofar as it is a gender definition is irrational and can only be explained, can only be explained, as a result of anti- gay malice and a bare desire to harm. >> do you believe this can be treated as a gender-based classification? >> your honor, i -- >> it's a difficult question that i've been trying to wrestle with it. >> yes, your honor. and we do not. we do not think it is properly viewed as a gender-based classification. virtually every appellate court, state and federal, with one exception, hawaii, in a superseded opinion, has agreed

that it is not a gender-based classification, but i guess it is gender-based in the sense that marriage itself is a gendered institution, a gendered term, and so in the same way that fatherhood is gendered more motherhood is gendered, it's gendered in that sense. but we agree that to the extent that the classification impacts, as it clearly does, same-sex couples, that classification can be viewed as being one of sexual orientation rather than -- >> outside of the -- outside of the marriage context, can you think of any other rational basis, reason, for a state sexual orientation as a factor in denying homosexuals benefits or imposing burdens on them?

is there any other rational decision-making that the government could make? denying them a job, not granting them benefits of some sort, any other decision? >> your honor, i cannot. i do not have any -- anything to offer you in that regard. i think marriage is -- >> all right. if that is true, then why aren't they a class? if they're a class that makes any other discrimination improper, irrational, then why aren't we treating them as a class for this one thing? are you saying that the interest of marriage is so much compelling than any other

interest as they could have? >> no, your honor, we certainly are not. we are saying the interest in marriage and the -- and the state 's interest and society's interest in what we have framed as responsible pro -- procreation is vital, but at bottom, with respect to those interests, our submission is that same-sex couples and opposite-sex couples are simply not similarly situated. but to come back to your precise question, i think, justice sotomayor, you're probing into whether or not sexual orientation ought to be viewed as a quasi-suspect or suspect class, and our position is that it does not qualify under this court's standard and traditional tests for identifying suspectedness. quiteass itself is amorphous. it defies consistent definition as -- as the plaintiffs' own experts were -- were quite vivid on. it does not -- it does not qualify as an accident of birth, immutability in that -- in that sense.

again, the plaintiffs -- >> so you -- so what -- i don't quite understand it. if you're not dealing with this as a class question, then why would you say that the government is not free to discriminate against them? >> well, your honor, i would think that -- i think it's a -- it's a very different question whether or not the government can proceed arbitrarily and irrationally with respect to any

group of people, regardless of whether or not they qualify under this court's traditional test for suspectedness. and the hypothetical i understood you to be offering, i would submit would create -- it would -- unless there's something that is not occurring to me immediately, an arbitrary and capricious distinction among similarly situated individuals, that is not what we think is at the -- at the root of the traditional definition of marriage. >> mr. cooper, could i just understand your argument. in reading the briefs, it seems as though your principal argument is that same-sex and opposite -- opposite-sex couples are not similarly situated because opposite-sex procreate, same-sex couples cannot, and the state's

principal interest in marriage is in regulating procreation. is that basically correct? >> i -- your honor, that's the essential thrust of our -- our position, yes. >> is there -- so you have sort of a reason for not including same-sex couples. is there any reason that you have for excluding them? in other words, you're saying, well, if we allow same-sex couples to marry, it doesn't serve the state's interest. but do you go further and say that it harms any state interest? >> your honor, we go further in the sense that it is reasonable to be very concerned that redefining marriage to -- as a genderless institution could well lead over time to harms to that institution and to the interests that society has always used that institution to address. but, your honor, i -- >> well, could you explain that a little bit to me, just because i did not pick this up in your briefs. what harm you see happening and when and how and -- what harm to the institution of marriage or

to opposite-sex couples, how does this cause and effect work? >> once again, i would that we don't believe that's the correct legal question before the court, and that the correct question is whether or not redefining marriage to include same-sex couples would advance the interests of marriage as a -- >> well, then are you conceding the point that there is no harm or denigration to traditional opposite-sex marriage couples? so you're conceding that. >> no, your honor, no. i'm not conceding that. >> well, but, then it -- then it seems to me that you should have to address justice kagan's question. >> thank you, justice kennedy. have two points to make on them. the first one is this -- the plaintiffs' expert acknowledged that redefining marriage will have real-world consequences, and that it is impossible for anyone to foresee the future accurately enough to know

exactly what those real-world consequences would be. and among those real-world consequences, your honor, we would suggest are adverse consequences. but consider the california voter, in 2008, in the ballot booth, with the question before her whether or not this age-old bedrock social institution should be fundamentally redefined, and knowing that there's no way that she or anyone else could possibly know what the long-term implications of profound redefinition of a bedrock social institution would be. that is reason enough, your honor, that would hardly be irrational for that voter to say, i believe that this

experiment, which is now only fairly four years old, even in massachusetts, the oldest state that is conducting it, to say, i think it better for california to hit the pause button and await additional information from the jurisdictions where this experiment is still maturing. >> mr. cooper, let me give you one concrete thing. i don't know why you don't mention some concrete things. if you redefine marriage to include same-sex couples, you must -- you must permit adoption by same-sex couples, and there's considerable disagreement among -- among sociologists as to what the consequences of raising a child in a -- in a single-sex family, whether that is harmful to the child or not. some states do not permit adoption by same-sex couples for that reason. >> california -- no, california does. >> i don't think we know the answer to that. do you know the answer to that, whether it -- whether it harms or helps the child? >> no, your honor. and there's --

>> but that's a possible deleterious effect, isn't it? >> your honor, it is certainly among the -- >> it wouldn't be in california, mr. cooper, because that's not an issue, is it? in california, you can have same-sex couples adopting a child. >> that's right, your honor. that is true. and -- but, your honor, here's the point -- >> it's true, but irrelevant. they're arguing for a nationwide rule which applies to states other than california, that every state must allow marriage by same-sex couples. and so even though states that believe it is harmful -- and i take no position on whether it's harmful or not, but it is certainly true that there's no scientific answer to that question at this point in time. >> and that, your honor, is the point i am trying to make, and it is the respondents' responsibility to prove, under rational basis review, not only that there clearly will be no harm, but that it's beyond

debate that there will be no harm. >> mr. cooper, you are defending -- you are opposing a judgment that applies to california only, not to all of the states. >> that's true, your honor. and if there were a way to cabin the arguments that are being presented to you to california, then the concerns about redefining marriage in california could be confined to california, but they cannot, your honor. >> i think there's substantial -- that there's substance to the point that sociological information is new. we have five years of information to weigh against 2,000 years of history or more. on the other hand, there is an immediate legal injury or legal -- what could be a legal injury, and that's the voice of these children. there are some 40,000 children in california, according to the red brief, that live with same- sex parents, and they want their parents to have full

recognition and full status. the voice of those children is important in this case, don't you think? >> your honor, i certainly not dispute the importance of that consideration. that consideration especially in the political process, where this issue is being debated and will continue to be debated,

certainly, in california. it's being debated elsewhere. but on that specific question, your honor, there simply is no data. in fact, their expert agreed there is no data, no study, even, that would examine whether or not there is any incremental beneficial effect from marriage over and above the domestic partnership laws that were enacted by the state of california to recognize, support, and honor same-sex relationships and their families. there is simply no data at all that would permit one to draw that conclusion. i would recall, justice kennedy, the point made in romer, that under a rational basis of review, the provision will be sustained even if it operates to the disadvantage of a group, if it is -- if it otherwise advances rationally a legitimate state interest. >> mr. cooper, we will afford

you more time. you shouldn't worry about losing your rebuttal time, but please continue on. >> oh -- >> as long as you are on that, then i would like to ask you this -- assume you could distinguish california, suppose we accept your argument or accept justice scalia's version of your argument and that distinguishes california. now, let's look at california. what precisely is the way in which allowing gay couples to marry would interfere with the vision of marriage as procreation of children that allowing sterile couples of different sexes to marry would not? i mean, there are lots of people who get married who can't have children. to take a state that does allow adoption and say -- there, what is the justification for saying no gay marriage? certainly not the one you said, is it? >> you're -- >> am i not clear? look, you said that the problem is marriage, that it is an institution that furthers procreation. >> yes, your honor. >> and the reason there was adoption, but that doesn't apply to california. so imagine i wall off california and i'm looking just there, where you say that doesn't apply. now, what happens to your argument about the institution of marriage as a tool towards procreation?

given the fact that, in california, too, couples that aren't gay but can't have children get married all the time. >> yes, your honor. the concern is that redefining marriage as a genderless institution will sever its abiding connection to its

historic traditional procreative purposes, and it will refocus, refocus the purpose of marriage and the definition of marriage away from the raising of children and to the emotional needs and desires of adults, of adult couples. suppose, in turn -- >> well, suppose a state said, mr. cooper, suppose a state said that, because we think that the focus of marriage really should be on procreation, we are not going to give marriage licenses anymore to any couple where both people are over the age of 55. would that be constitutional? >> no, your honor, it would not be constitutional. >> because that's the same state interest, i would think, you know. if you are over the age of 55, you don't help us serve the government's interest in regulating procreation through marriage. so why is that different? >> your honor, even with respect to couples over the age of 55, it is very rare that both couples -- both parties to the couple are infertile, and the traditional -- [laughter] >> no, really, because if the couple -- i can just assure you, if both the woman and the man are over the age of 55, there are not a lot of children coming out of that marriage. [laughter] >> your honor, society's interest in responsible procreation isn't just with respect to the procreative capacities of the couple itself. the marital norm, which imposes

the obligations of fidelity and monogamy, your honor, advances the interests in responsible procreation by making it more likely that neither party, including the fertile party to that -- >> actually, i'm not even -- >> i suppose we could have a questionnaire at the marriage desk when people come in to get the marriage -- you know, are you fertile or are you not fertile? [laughter] >> i suspect this court would hold that to be an unconstitutional invasion of privacy, don't you think? >> well, i just asked about age. i didn't ask about anything else. that's not -- we ask about people's age all the time. >> your honor, and even asking about age, you would have to ask if both parties are infertile. again -- >> strom thurmond was -- was not the chairman of the senate committee when justice kagan confirmed. [laughter] >> very few men -- very few men

outlive their own fertility. so i just -- >> a couple where both people are over the age of 55 -- >> i -- >> a couple where both people are over the age of 55. >> and your honor, again, the marital norm which imposes upon that couple the obligation of fidelity -- >> i'm sorry, where is this -- >> i'm sorry, maybe you can finish your answer to justice kagan. >> i'm sorry. >> it's designed, your honor, to make it less likely that either party to that -- to that marriage will engage in irresponsible procreative conduct outside of that marriage. outside of that marriage. that's the marital -- that's the marital norm. iniety has an interest seeing a 55-year-old couple

is -- just as it has an interest of seeing any heterosexual couple that intends a prolonged period of cohabitation to reserve that until they have made a marital commitment, a marital commitment. so that, should that union produce any offspring, it would be more likely that that child or children will be raised by the mother and father who brought them into the world. >> mr. cooper, we said that somebody who is locked up in prison and who is not going to get out has a right to marry, has a fundamental right to marry, no possibility of procreation. >> your honor is referring, i'm sure, to the turner case, and -- >> yes. >> i think that, with due respect, justice ginsburg, way over-reads -- way over-reads turner against safley. that was a case in which the prison at issue -- and it was decided in the specific context of a particular prison where there were both female and male inmates, many of them minimum security inmates. it was dealing with a regulation, your honor, that had previously permitted marriage in the case of pregnancy and childbirth.

the court -- the court here emphasized that, among the incidents of marriage that are not destroyed by that -- at least that prison context, was the expectation of eventual consummation of the marriage and legitimation of the children. so that -- >> thank you, mr. cooper. >> thank you, mr. chief justice. >> mr. olson?

>> thank you, mr. chief justice, and may it please the court -- i know that you will want me to spend a moment or two addressing the standing question, but before i do that, i thought that it would be important for this court to have proposition 8 put in context, what it does. it walls-off gays and lesbians from marriage, the most important relation in life, according to this court, thus stigmatizing a class of californians based upon their status and labeling their most cherished relationships as second-rate, different, unequal, and not ok. >> mr. olson, i cut off your friend before he could get into the merits. >> i was trying to avoid that, your honor. >> i know -- [laughter] >> well, i think it's only fair to treat you the same. perhaps you could address your jurisdictional argument? >> yes. i think that our jurisdictional argument is, as we set forth in the brief, california cannot create article iii standing by designating whoever it wants to

defend the state of california in connection with the ballot. >> but this is not whoever it wants. these are five proponents of the measure, and if we were to accept your argument, it would give the state a one-way ratchet. the state could go in and make a defense, maybe a half-hearted defense of the statute, and then when the statute is held invalid, simply -- simply leave. on the other hand, if the state loses, the state can appeal. so this is a one-way ratchet as it favors the state, and allows governors and other constitutional officers in different states to thwart the initiative process. >> that's the -- that's the way the california supreme court saw it with respect to california law. the governor and the attorney general of california are elected to act in the best interests of the state of california. they made a professional judgment given their obligations as officers of the state of california. the california supreme court has said that proponents -- and by the way, only four of the five are here. dr. tam withdrew from the case because of some -- many things

he said during the election campaign. >> well, mr. olson, is it your position that the only people who could defend a ballot, a law