Regulating Code:Towards aProsumer LawChris Marsden (Sussex) &Ian Brown (Oxford)#icis201311 April 2013
‘Governments of the Industrial World, you weary giants of flesh and steel, I come fromCyberspace, the new home of the Mind. On behalf of thefuture, I ask you of the past to leave us alone. You are notwelcome among us. You have John Perry Barlow no sovereignty where we A Declaration of the gather.’ Independence of Cyberspace (1996) response to CDA 1996 (partly struck down in Reno v. ACLU 1997)
Regulation and governance Internet use now ubiquitous ◦ but governments, legislators and regulatory agencies falling further behind rapidly changing Internet technologies and uses Critical analysis of regulatory shaping of ―code‖ or technological environment ◦ ‗Code is law‘ and coders operate within normative framework ◦ More economically efficient and socially just regulation ◦ Critical socio-technical and socio-legal approach
Test the existing ‗received truths‘1. Self-regulation and minimal state involvement is most efficient in dynamic innovative industries; ◦ technology is never neutral in societal impact ◦ network and scale effects drive massive concentration2. Self-regulation critically lacks constitutional checks and balances for the private citizen, including appeal3. Multi-stakeholder co-regulation chance to reconcile the market failures and constitutional legitimacy failures in self-regulation ◦ voters will not allow governments to ignore the Internet.
Empirical investigation Five case studies and one ‗prior art‘ (encryption, anonymity, security) ◦ Multi-year empirical investigation ◦ Builds on various EC/other studies including ‗Self-regulation.info‘ (2001-4), ‗Co-regulation‘ (2006-8), ‗Towards a Future Internet‘ (2008-10), ‗Privacy Value Networks‘ (2008-11), ‗Network neutrality‘ (2007-10) ‗Internet science‘ (2012-15) Reassesses prior art in view of ‗hard cases‘ ◦ Topics with no organised regulation/self-regulation ◦ Due to lack of consensus over solutions ◦ Clash between market outcomes and human rights
Literature Previous legal focus on elephant‘s trunk? ◦ Benkler, Wu, Lessig, Zittrain, Van Schewick ◦ General US scepticism of government action ◦ Leaves only bottom-up Wiki-panacea Ohm‘s Myth of the Super-User More empirical view: ◦ Mueller (2010), De Nardis (2009) ◦ Institutional economics and political science
Governance and Law How suitable is our current system? ◦ Is it fit for 21st century? Open data, open code, and human rights Blizzard of Internet governance principles 2011 ◦ Law/economics, or human rights, do not translate Urgent task: dialogue between discrete expert fields ◦ ICT growth driver and transformative technology ◦ transformative role in communication ‗arms trade‘ in censorship technology; Twitter ‗revolution‘ (sic)
Prosumers not super-users Web 2.0 and related tools make for active users, not passive consumers US administrative & academic arguments ◦ self-regulation may work for geeks, ◦ but what about the other 99%? European regulatory space ◦ more fertile ground to explore prosumerism ◦ as both a market-based and ◦ citizen-oriented regulatory tool
Penguin and Leviathan? Is the West (and East) already won? ◦ A billion Facebook users ◦ A billion Weibo users Are we oil in the digital economy? ◦ Crushed under the elephants‘ feet? Or silkworms unaware of our ‗owner‘s‘ ◦ mingling of our silk into their commercial tapestry?
Case studies1. Data protection in Social Networks ◦ Enforcement failures, Privacy by Design ◦ Dominance, network effects, corporate social irresponsibility2. Search Neutrality ◦ Net neutrality argument ◦ Code-based solution to competition problem ◦ Prosumer focus cf. Microsoft
Approach embraces complexity No easy examples that demonstrate truth of ◦ technical, political, legal or economic solutions ◦ based on self-, co- or state regulatory approaches. ◦ Cf. Mansell (2012) Imagining the Internet Examine the deficiencies and benefits ◦ Match market and social developments ◦ With human rights concerns ◦ E.g. In fields of privacy and freedom of expression Note: analysis based on Art.19 UDHR not 1st Amendment Most of world uses variants of Article 19
Government and market failure Industry capture of regulators & legislators Incumbents introduce new barriers to entry Continued exclusion of wider civil society ◦ tenuous chain of accountability of participants ◦ to voters, shareholders and NGO stakeholders. ◦ effectiveness, accountability and legitimacy of these groups in representing the public interest?
Towards interoperability as prosumer law Solution for prosumers & competition ◦ enhance competitive production of public goods ◦ including innovation, public safety, and fundamental democratic rights Key aspect: interoperability (incl. FRAND) ◦ (Note: this is detailed software interoperability, not the general description offered by Gasser/Palfrey 2012)
What regulation teaches about code Ex ante + ex post intervention Interoperability ◦ Procurement policy + regulation/competition A biased policy towards open code – ◦ Data open to mash-ups (government) ◦ Systems interoperable (procurement) ◦ Use of alternatives to market leader (e.g. Linux) Via competition remedies and sponsorship
Information regulation precedent Must-carry/must-offer obligations, ◦ imposed on many market actors, ◦ including obliged to offer FRAND terms (common carriers, broadband access providers, cable broadcasters, electronic program guides); Interconnection requirements on telcos, ◦ especially those with dominance— ◦ And AOL/Time Warner merger requirement for instant messaging interoperability Application programming interfaces (API) disclosure requirements, ◦ placed on Microsoft by EC upheld by ECJ
Google: competition investigationboth sides of Atlantic since 2010 settled with US authorities 3 Jan 2013 settlement proposal to EC 1 Feb 2013 Experts have severely criticized both ◦ the timing and content of FTC settlement ◦ extremely favourable to Google ◦ composition of the outgoing FTC board, ◦ decision not to proceed on main issues
Grimmelman argued:―If the final FTC statement had beenany more favourable to Google,I‘d be checking the file metadata to seewhether Google wrote it.‖
4 lines of complaintSearch bias: Google favours own products over competitors in resultsVertical Search Opt-Out – ◦ Google don‘t let websites opt out of particular uses of pages it indexes. ◦ complete opt-out giving up all Google traffic, a significant driver of traffic – ◦ especially Europe: Google has 90% search market in UK, Nl, France, GermanyRestricted 3rd party use of AdWords: ◦ ―API Client may not [function] copies data between Google and 3rd Party.‖ ◦ Companies can advertise on Google and Bing, ◦ but cannot use a program to copy Google AdWords campaigns over to Bing. ◦ dropped by Google as token interoperability sop to FTC‘s investigation;Injunctions against standards-essential patents, ◦ including those by Google-acquired Motorola Mobility see Posner‘s now–famous judgment in June 2012 ◦ FTC concluded (4-1) unfair competition, Google agreed not to engage in it ◦ fires a shot not just at Google, but also at rivals –clever concession by Google!
Google and competitors routinelyprivately regulate other‘s code points 3 and 4, Google claimed the right to regulate others‘ use of code, to use the AdWords API or to use Motorola Mobility‘s patents..
―Prosumer law‖ approach interoperability and content neutrality1. Google to reinforce search neutrality 1. NOT bias results with search algorithms2. relatively trivial (by Google standards) amendment to its code 1. allow websites more flexibility in listing, 2. rather than complete opt-out via the existing robots.txt convention.
We do not make strong normative claim that Google should adopt neutral perspective ◦ (nor do we adopt approach to net neutrality), We advocate truth-in-advertising Any search engine (or ISP using search) ◦ claiming verifiably neutral results ◦ produce the same
Or prominently advertise its product as 1. commercially driven, 2. affiliate-biased 3. selective search engine.
Search neutrality: Internet searchengine provide search resultsthat correspond to its mission to search the Internet for relevant products, with any ‗promoted‘ products advertised as such ◦ separated from search results requested by the user. this is exactly the solution that leading search engines claim to provide, ‗sponsored links‘ separate from overall results ◦ in either a side-bar or more intrusive text box above the main results. ◦ That would not prevent linking to an affiliated maps provider, or shopping engine, ◦ as long as these links are not in the main results.
Requirement does not imposesignificant regulatory burden reinforces the brands of search providers of integrity. would not apply to selective search providers if labelled such ‗a search engine which selectively provides you with search results according in part to its commercial affiliations‘ ◦ (or equivalent wording) prominently displayed above search results in that case.
Code-based solutions lighter than€1b fines or structural separation In book, we suggest similar approach ◦ to network neutrality violators could not advertise their services as allowing end-users‘ choice ◦ in accessing the ‗Internet‘ when in fact it is a commercial Intranet ◦ to which full access is provided.
Social networks: US solutionsinstead of EU non-enforcement Facebook‘s 400m European users 27 national regulators of personal data. Facebook chose regulator relocated in 2006 ◦ from Dublin to Portarlington, Co. Laois, Ireland, ◦ Google is also regulated from Portarlington. While German state and federal regulators and others may rattle sabres at Facebook, Irish regulator audited Facebook spring 2012 insisting on remedial action on nine counts
Prosumer law: direct intervention Abusive dominant social networking sites prevent Facebook, Google+ any other ◦ from erecting a fence around its piece of the information commons: ◦ ensure interoperability with open standards Which lowers entry barriers (in theory!) Enforcement of privacy law even in Portarlington
50 ways to leave Facebook Not sufficient to permit data deletion ◦ as that only covers the user‘s tracks. Interconnection and interoperability, ◦ more than transparency and ◦ theoretical possibility to switch. Ability for prosumers to interoperate to permit exit ◦ Lower entry barriers tend to lead to increased consumer welfare
US FTC constant audit Class actions: 2011 $8.5m Google Buzz. Jan 2013, Facebook $20m Nov 2012, FTC Google settled for $22.5m ◦ tracking cookies for Safari browser users 2012, both agreed to settle privacy complaints ◦ FTC privacy audit of products for a 20-year period. ◦ That‘s until 2032! Sector-specific regulation of social networking already exists de facto in the United States, Europeans wring their hands on the sidelines. ◦ proposed new European Regulation ◦ unlikely to be implemented before 2016.
Euro-Interoperability Framework Response to multi-€bn competition cases: ◦ Microsoft saga (to 2009), Intel (2009), Apple (2010), Rambus (2009) ◦ Google (2013?) perhaps Facebook.... ◦ Coates (2011: Chapters 5-6) Announced by DG Comp (CONNECT) Commissioner Kroes 2009-2010 Bias in favour of interoperability in policy Concerns are broader than competition ◦ Include privacy, IPR, security, fundamental rights
Developing study of code regulation Similarities and cross-over with ◦ complexity science ◦ network science ◦ web science/graph theory Match Internet regulation to complexity theory Longstaff (2003), Cherry (2008), Schneider/Bauer (2007) Network science fusion of scientific/fundamental elements from various components Internet Science? EC Network of Excellence
Kroes‘ promise post-Microsoft Will ―seriously explore all options to ensure that significant market players cannot just choose to deny interoperability. ―The Commission should not need to run an epic antitrust case every time software lacks interoperability.‖
Questions? Book published 22 March 2013 ‗Prosumer law‘ article (early version now on SSRN) Comments welcome