Regulating Code - EUI Workshop

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  • Context – do we have automatic right not to have our content regulated and filtered?Rights to freedom of expression (and information in many cases) – not just a North American tradition, are regional and international standards.African Charter more limited (receive info and express opinions within bounds of law)
  • The new stand-setting framework was to be established by end-2010: “In Europe only ETSI allows these actors to directly participate in the making of standards. One negative result is that the standards underpinning the emerging universal communication platform: the internet and the world wide web - including standards for content formats - are made elsewhere. This puts these standards, many of which are truly open - that is to say they do not come with any constraints for implementers - at a disadvantage vis-à-vis European standards when in legislation or public procurement...[Solving] This could be done via a fast-track approval of their standards through a process hosted by a traditional European standards body such as ETSI, or through the assessment of these bodies' compliance with certain criteria regarding notably openness, consensus, balance and transparency.”On licensing standards she states:  “let's face it, establishing FRAND (Fair, Reasonable and Non-Discriminatory) prices is a hard task over which reasonable people often disagree. Transparency is therefore in everyone's interest - the alternatives are not... The Commission has already taken an important step by drafting new guidelines on the application of the Treaty's antitrust rules to horizontal agreements... The draft, which is currently available for public comment, relies on the well-established concepts of non-discrimination, transparency and availability and specifies minimum requirements that distinguish standard-setting from a cartel.” She continues: “when the Commission mandates standards bodies to draw up a standard it should have the right to be more demanding on the standardisation process, to ensure that standards are less demanding when it comes to their adoption. We could also think about enticing other standards bodies to adopt such rules, for example by giving their outputs preferential treatment when approving them as European standards. Finally, why not tie the public financing of standards bodies to the existence of good ex-ante rules?” This suggests an additional legislative requirement that government support for standards must rely on best practice in licensing including royalty terms. The development of her thinking on this subject through the course of the Microsoft, Intel and Rambus cases, and the policy approach increasingly shaped by interoperability, is explained in great and penetrating detail by Coates (2011: Chapters 5-6).She does not argue for uniformity however: “We don’t want uniform rules everywhere... Standard-setting for software interoperability is not the same as setting a new standard for, say, digital television or mobile telephony. We should have the right rules in the right contexts...I am convinced that a more visible role for fora and consortia standardisation in Europe will already lead to many improvements here.” Dolmans (2010) suggests that an established ‘common standard’ which is truly open allows the “best of breed” components from different manufacturers to be combined, with maximum efficiency. To qualify as “open” a standard must meet a number of open conditions:• access to the decision-making process• transparent and undistorted procedures• published, pro-competitive goals• published, objective, relevant criteria for technology selection• No over-standardization• access to the standard: Open information on blocking patents; No unjustified refusal to license; Fair (FRAND) pricingDolmans suggests that royalty-free licensing is advisable in the software arena – allowing both open source and proprietary software to compete on quality and functionality. However, he advises that the telecommunications sector uses FRAND licensing, given the price and complexity of standard-setting efforts. He states that: “Mandating royalty-free licensing would likely recreate a tragedy of commons and discourage innovation, while allowing IPR owners to charge at will could create a tragedy of anticommons. To strike the right balance, therefore, a contract of mutual restraint is necessary”. This argues against uniform royalty-free pricing.On IT procurement by European governments, Kroes suggests “detailed guidance on how to analyse a technology buyer's requirements in order to make best use of ICT standards in tender specifications. This is a complex exercise... Many authorities have found themselves unintentionally locked into proprietary technology for decades.” She means lazy procurement or to be more polite, when 'inertia sets in'. Or corruption in IT vending, of course, and it is notable that an IT vendor ‘cartel’ has been alleged by government on both sides of the Atlantic in 2011.The new European Interoperability Framework is a second version, adopted by the College of Commissioners, and “will therefore rightly be perceived as of a higher status and importance than EIF version 1” which was more guidance than instruction. She explains that “It contains a ‘comply or explain’ requirement when governments do not adopt an available open standard, as already applies in the Netherlands.” Most radically, she signals more intervention on interoperability in competition cases: “with my colleagues in the College I will seriously explore all options to ensure that significant market players cannot just choose to deny interoperability with their product.” She argues that the lengthy Microsoft case has lessons for action: “Complex anti-trust investigations followed by court proceedings are perhaps not the only way to increase interoperability. The Commission should not need to run an epic antitrust case every time software lacks interoperability. Wouldn't it be nice to solve all such problems in one go?... I am looking for a way to ensure companies offer the required information for licensing... Whereas in ex-post investigations we have all sorts of case-specific evidence and economic analysis on which to base our decisions, we are forced to look at more general data and arguments when assessing the impact of ex-ante legislation. Just to be clear, while it is still early days, it is certainly possible that I will go for a legislative proposal.”In the first phase, the Commission (2010) adopted the Communication, to “establish a common approach for Member States public administrations, to help citizens and businesses to profit fully from the EU’s Single Market”. It forms the basis of the EC four prong strategy, with Common frameworks in support of interoperability, “Reusable generic tools”, “Common services” (operational applications and infrastructures of a generic nature to meet user requirements across policy areas), and “Analysis of the ICT side in the implementation of new EU legislation”. We will in this chapter focus on the final point, and suggest that the EC and Member States should impose a general duty to require interoperability to be ‘hard wired’ into legislation in all cases where there is not an over-riding public interest in favour of a proprietary solution. In particular, given the modality of interoperability can prevent the types of abusive vertical integration found in the Microsoft case, we argue that financial models intended to create best value for taxpayers may both tend to limit future competition by creating lock-in as well as leading to what has been stated in both the UK and US in mid-2011 to be an ‘ICT vendor cartel’ dealing with governments. Such an outcome could have been foreseen, and would have been avoided with greater dedication to choosing interoperable solutions. As Ganslandt (2010) argues, the four prongs are “they are not likely to be sufficient” without a more effective enforcement strategy, hence our ‘hard wired’ interoperability proposal.
  • Regulating Code - EUI Workshop

    1. 1. ‘Prosumer Law’:Consumer Protection viaPlatform Interoperabilityand FundamentalRightsEUI GGP 14 December 2012
    2. 2. Regulating CodeGood Governance and Better Regulation inthe Information AgeIan Brown (Oxford) Chris Marsden (Sussex)
    3. 3. Book due out spring 2013
    4. 4. Biographies Chris Marsden is ◦ Professor of Law, ◦ author of  Net Neutrality:  Towards a Co-Regulatory  Solution (2010),  Internet Co-regulation (2011)  and three other books.
    5. 5.  Ian Brown is ◦ Senior Research Fellow at ◦ Oxford Universitys Oxford Internet Institute. ◦ Computer scientist with public policy focus ◦ editor of Research Handbook on Internet Governance„ (Elgar 2013)
    6. 6. Holistic regulation of the Internet Interdisciplinary approach written by ◦ socio-legal scholar (Marsden) ◦ computer scientist (Brown) Core idea: develop a „prosumer law‟ ◦ Must work with innovation and socio- economic incentives ◦ Human rights continual focus
    7. 7. Regulation and governance Internet use now ubiquitous ◦ but governments, legislators and regulatory agencies ◦ falling further behind rapidly changing Internet technologies and uses. Regulatory lawyer Marsden and computer scientist Brown critically analyze regulatory shaping of “code” ◦ Technological environment of the Internet  „code is law‟ and coders operate within normative framework ◦ more economically efficient and socially just regulation ◦ Critical socio-technical and socio-legal approach
    8. 8. Literature Previous legal focus on elephant‟s trunk? ◦ Benkler, Wu, Lessig, Zittrain, Van Schewick ◦ Wikipedia + Apache + Firefox + GPL ◦ But fatally flawed by lack of trust in federal government More „worldly‟ view Mueller (2010) De Nardis (2009) ◦ Institutional economic and political science literature ◦ Note new Mansell book… Fascinating but limited view ◦ World uses Facebook on Windows...on mobile (and not the Jesus-phone and Fondle-slab) Ohm‟s Myth of the Super-User? Code V2.0?
    9. 9. „Governments of theIndustrial World, you wearygiants of flesh and steel, I come from Cyberspace,the new home of the Mind. On behalf of the future, I ask you of the past toleave us alone. You are not John Perry Barlow welcome among us. You A Declaration of the Independence of Cyberspace (1996)have no sovereignty where response to Communications Decency we gather.‟ Act 1996 (partly struck down in Reno v. ACLU 1997)
    10. 10. The nation strikes back?Respect for national borders Governance by and regulation by nation or? supra-national bodies and networks states
    11. 11. Complexity and pace of change  Technical variety of different devices and platforms ◦ 4G mobile vs. PC, Kindle vs iPad  Sociological variety in how different platforms and devices are used ◦ child‟s PC located where it can be monitored, but not phone  Differing industry standards across different companies ◦ means technological „fixes‟ hard to implement.  Multiplicity of players; ecology of actors even more complex in the world of „apps‟ and cloud computing.  Pace of change means that any regulation has to be „future-proofed‟ if it is to avoid becoming redundant.
    12. 12. “…generativity is a systems capacity to produceunanticipated change throughunfiltered contributions frombroad and varied audiences” ‘Generativity’ Jonathan Zittrain 2008
    13. 13. MODALITIES OFREGULATIO N Lawrence Lessig Code 2.0 (2006)
    14. 14. Test the existing receivedtruthsStrawmen: [1] Self-regulation and minimal state involvement is most efficient in dynamic innovative industries; technology is never neutral; [2] Self-regulation critically lacks constitutional checks and balances for the private citizen, including appeal; network and scale effects drive massive concentration [3] 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.
    15. 15. Government and marketfailure Industry capture of regulators and legislators, Incumbents protect/introduce new barriers to entry Continued exclusion of wider civil society from the policy discussion – but ◦ tenuous chain of accountability of participants to voters, shareholders and NGO stakeholders. ◦ effectiveness, accountability and legitimacy of these groups in representing the public interest?
    16. 16. 5 Case Study Chapters1. Data protection 1. Enforcement failures, Privacy by Design2. Copyright 1. Capture of law by lobbyists, code solutions outflank3. Filtering 1. Growth of censorship, surprising degree of freedom – disappearing?4. Social Networks 1. Dominance, network effects, corporate social irresponsibility5. Smart Pipes ◦ Net neutrality argument, DPI deployment
    17. 17. Lessons from 5 case studies Lessons for better future regulation from the ◦ regulatory and interoperability failures illustrated. Conclusion: governments, users/citizens and functioning markets need a smarter "prosumer law" approach. Prosumer law would be designed to ◦ enhance the competitive production of public goods, ◦ including innovation, public safety, and ◦ fundamental democratic rights.
    18. 18. Empirical Investigation Five case studies and one „prior art‟ (encryption, anonymity, security: a „case apart‟) ◦ 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)  Timeline important as partly historical studies 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
    19. 19. Example: Smart Pipes Legislation and regulation in place ◦ 10 year evidence base of discrimination by protocol/user ◦ Merger reviews ex ante regulation ◦ EC Directives and Netherlands law Political will to act on freedom of expression ◦ Especially in view of broadband universal service ◦ Reinforced by competition problems in video/voice Enforcement? Problems Canada, Netherlands, UK ◦ Co-regulatory solution? BITAG (US), Berners Lee (UK) ◦ Innovation in the core? Mobile true test case
    20. 20. Recent net neutrality work „‟Three Wise Monkeys‟ 2011 ◦ www.globalpolicyjournal.com/ „Mobile Net Neutrality‟ 2011 ◦ ejlt.org//article/view/32 „Net Neutrality: A Research Guide‟ 2013 ◦ ssrn.com/author=220925
    21. 21. Approach embracescomplexity No easy examples that demonstrate the 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 Article 19 UDHR not 1st Amendment  Most of world uses variants of Article 19
    22. 22. Not just a book - epilogue We assess the environmental preconditions for prosumer law to operate in Europe. The multi-stakeholder environment for Internet governance and regulation, in which user groups lobbied along with business and governments, insights of new institutionalism.
    23. 23. Towards Interoperability asProsumer Law We note the failures and capture of government by „information giants‟ Many (not all) problems caused by giants‟ perceived need to maintain proprietary lock-in via code ◦ Microsoft/Google/Facebook/ad industry ◦ Favoured by big government as big solution ◦ Aiding in control of networks for government interest Solution in favour of prosumers and competition: Interoperability ◦ (Note: this is detailed software interoperability, not the general description offered by Gasser/Paltrey 2012)
    24. 24. Prosumer law suggests a moredirected intervention Example: proposed solution to the problems of dominant social networking sites, to prevent Facebook, Google+ or any other network from erecting a fence around its piece of the information commons: to ensure interoperability with open standards.
    25. 25. 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.
    26. 26. Standards wars continued Exit and competition for standards increasingly critical in the information economy; ◦ Textbook examples:  3G (Qalcomm/Ericsson)  VHS/V2000/BetaMax ◦ New example: patent pooling/trolling inc.  Apple/Samsung/Google-Motorola, MSFT We focus on interoperability, ◦ lower entry barriers, increased consumer welfare
    27. 27. Prosumers not super-users United States administrative and academic arguments (Wu 2010, Zittrain 2008, Lessig 2006) for self- regulation to have demonstrably failed, I focus on the European regulatory space as a more fertile ground to explore prosumerism as both a market-based and citizen-oriented regulatory tool
    28. 28. „Islands in the Bitstream‟ (Borrus, Bar 1995) “Inquiring into interconnection and interoperability is a bit like the search for justice. Everyone avows its virtue; but....” “peculiar economic character of interface standards raises real questions about whether market mechanisms will be sufficient to create a highly interoperable [Internet]”
    29. 29. Gasser et al (2007) Breaking Down Digital Barriers There is no one-size-fits-all way to achieve interoperability in the ICT context. Our conclusion: interoperability generally supports innovation in ICT context, but that the relationship between the two is highly complex and fact-specific. We conclude also that the best path to interoperability ◦ depends greatly upon context and which subsidiary goals matter most  cyber.law.harvard.edu/publications/2007/Breaking_Down_Digital _Barriers
    30. 30.  “Not surprisingly, European attitudes toward the mode of accomplishing interoperability are quite different from American inclinations.”
    31. 31. Range of approaches haverelative merits in circumstances Efforts within a single firm to interconnect products or within firms; collaboration between or among two or more firms; standards processes, including open fora and ad hoc cooperation; and a wide range of roles for governments, most are ex post not ex ante modes of regulation.
    32. 32. European Moves in 2013? Public Consultation on the Access to Interoperability Information of Digital Products and Services ◦ http://ec.europa.eu/yourvoice/ipm/forms/di spatch?form=Interoperability&lang=EN
    33. 33. What regulation teaches aboutcode Ex ante and ex post intervention - regulation Interoperability and open code/data - procurement A biased policy towards open code – ◦ Data open to mash-ups (govt) ◦ Systems interoperable (procurement) ◦ Use of alternatives to market leader (e.g. Linux) ◦ But not to exclusion of average users
    34. 34. Economics and HumanRightsInteroperability linked to open data, open code, and arguably though technologically deterministically to free speech.Blizzard of Internet governance principles in 2011 have ◦ origins in law and economics, ◦ or human rights, but ◦ apparently do not translate one to the other. This apparent dialogue of the deaf is a competition policy (Brown and Waelde 2005), and corporate governance problem.Urgent task: dialogue between previous discrete expert fields ◦ ICT growth driver and transformative technology ◦ equally transformative role in human communication and dialogue.
    35. 35. Recent scholarship Intellectual Property, Human Rights And Competition: ◦ Access to Essential Innovation and Technology ◦ Abbe E.L. Brown ◦ Elgar 2012
    36. 36. Developing study of regulatingcode Similarities and cross-over with ◦ complexity science, ◦ network science and ◦ 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
    37. 37. Euro-InteroperabilityFramework Response to gigantic (billion-euro) anti- trust cases: Microsoft saga (to 2009), Intel (2009), Apple (2010), Rambus (2009) ◦ Google (2013?) perhaps Facebook.... ◦ Coates (2011: Chapters 5-6). Announced by Commissioner Kroes in 2009-2010 Bias in favour of interoperability in policy Concerns are broader than competition ◦ Include privacy, IPR, security, fundamental rights
    38. 38. Kroes‟ five-part EIF agenda1. new standard setting framework;2. new horizontal agreement guidelines to establish more transparency in licensing standards;3. common framework for ICT procurement;4. new „European Interoperability Framework‟;5. intervention in competition cases to establish a principle of interoperability, ◦ including via ex ante requirements.
    39. 39. New standard-setting end- 2010Fast-track approval of [Internet] standards through: process hosted by traditional Euro standards body ◦ such as ETSI through assessment of compliance with certain criteria ◦ openness, consensus, balance and transparency. [FRAND] New guidelines on the application of antitrust rules to horizontal agreements.
    40. 40. “We don‟t want uniformrules everywhere” “Standard-setting for software interoperability is not the same as setting a new standard for, say, ◦ digital television or mobile telephony. We should have right rules in the right contexts... I am convinced that a more visible role for fora and consortia standardisation in Europe will already lead to many improvements here.”
    41. 41. EIF V2.0“Higher status and importance than EIF version 1” ◦ was more guidance than instruction. „Comply or explain‟ requirement  when governments do not adopt an available open standard, ◦ as already applies in the Netherlands. Resolvedvia legislation if necessary.
    42. 42. 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.”
    43. 43. Commission (2010)adopted theCommunication“Common approach for public administrations” EC four prong strategy, with:1. Common frameworks in support of interoperability2. “Reusable generic tools”3. “Common services” 1. (operational applications and infrastructures of a generic nature to meet user requirements across policy areas), and4. “Analysis of the ICT side in new EU legislation”
    44. 44. Interoperability prevents abuse of vertical integration We argue that proprietorial long-term lock-in may ◦ tend to limit future competition ◦ by creating lock-in ◦ leading to what has been stated in mid-2011 as ◦ „ICT vendor cartel‟ dealing with governments.
    45. 45.  Such an outcome could have been avoided with dedication to choosing interoperable solutions. Ganslandt (2010) argues for effective enforcement strategy, a „hard wired‟ interoperability proposal. We agree! Devil remains in the detail…
    46. 46. Book publishedFebruary 2013‘Prosumer law’article 2014…commentswelcome!Comments tocmars@essex.ac.uk
    47. 47. Dolmans (2010) offers „open‟ definitionof common standardTo qualify as “open” a standard must meet a number of open conditions: • access to the decision-making process • transparent and undistorted procedures • published, pro-competitive goals • published, objective, relevant criteria for technology selection • No over-standardizationAccess to the standard: Open information on blocking patents; No unjustified refusal to license; Fair (FRAND) pricing
    48. 48. Some broad definitions Government: formal and institutional processes (usually national or local) which maintain public order and take policy decisions on behalf of citizens. Governance: the act or process of governing (not necessarily by government) ◦ Is governance possible without outcomes? Regulation: application of laws, policies, rules, codes of conduct… ◦ Legal assumption of enforcement even if only by exclusion ◦ Even if self-enforcement by habitual obedience Self-regulation: operation according to a voluntary code of conduct or set of principles independent of government Co-regulation: State involved with industry in jointly developing rules and regulations with procedures for oversight.

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