Is the Market Classification of Risk Always Efficient? - Evidence from German Third Party Motor Insurance

This paper studies the empirical effects of risk classification in the mandatory third-party motor insurance of Germany following the European Union’s directive to de-regulate insurance tariffs of 1994. We find evidence that inefficient risk categories had been selected while potentially efficient information was dismissed. Risk classification did generally not improve the efficiency of contracting or the composition of insureds in this market. These findings are partly explained by the continuing existence of institutional restraints in this market such as compulsory fixed coverage and unitary owner insurance.

UsedSoft and the Big Bang Theory: Is the e-Exhaustion Meteor about to Strike?

Since the UsedSoft ruling of the CJEU in 2012, there has been the distinct feeling that – like the big bang - UsedSoft signals the start of a new beginning. As we enter this brave new world, the Copyright Directive will be read anew: misalignments in the treatment of physical and digital content will be resolved; accessibility and affordability for consumers will be heightened; and lock-in will be reduced as e-exhaustion takes hold. With UsedSoft as a precedent, the Court can do nothing but keep expanding its own ruling. For big bang theorists, it is only a matter of time until the digital first sale meteor strikes non-software downloads also. This paper looks at whether the UsedSoft ruling could indeed be the beginning of a wider doctrine of e-exhaustion, or if it is simply a one-shot comet restrained by provisions of the Computer Program Directive on which it was based. Fighting the latter corner, we have the strict word of the law; in the UsedSoft ruling, the Court appears to willingly bypass the international legal framework of the WCT. As far as expansion goes, the Copyright Directive was conceived specifically to implement the WCT, thus the legislative intent is clear. The Court would not, surely, invoke its modicum of creativity there also... With perhaps undue haste in a digital market of many unknowns, it seems this might well be the case. Provoking the big bang theory of e-exhaustion, the UsedSoft ruling can be read as distinctly purposive, but rather than having copyright norms in mind, the standard for the Court is the same free movement rules that underpin the exhaustion doctrine in the physical world. With an endowed sense of principled equivalence, the Court clearly wishes the tangible and intangible rules to be aligned. Against the backdrop of the European internal market, perhaps few legislative instruments would staunchly stand in its way. With firm objectives in mind, the UsedSoft ruling could be a rather disruptive meteor indeed.