Month: April 2021

McGowan on The Internet and the Limping Truth

David McGowan (University of San Diego School of Law) has posted “The Internet and the Limping Truth” on SSRN. Here is the abstract:

Constitutional doctrine protects false speech and even lies in certain circumstances. The doctrine also endorses non-literal interpretation of speech that can cause statements implying factual assertions to be treated as non-factual, non-actionable opinion. These doctrines limit the degree to which laws may counteract falsity. Historically publishers exercised discretion, through ex ante review, that limited the dissemination of false statements, including those that would have been protected speech had they been published.

As the Internet has lowered the cost of disseminating expression, speech has been democratized radically. Many more people say many more things, many of them untrue. 47 U.S.C. Section 230(c)(1) provides that social media outlets are not publishers of user-generated content, thus immunizing such outlets from, for example, tort liability such as for defamation. Outlets’ terms of use typically grant them discretion to decline to post or to remove content. These outlets thus exercise ex post the sort of discretion formerly exercised ex ante by traditional media outlets.

Political dissatisfaction with the exercise of such discretion has led to calls to treat social media outlets either as state actors or common carriers. Neither option is desirable. Social media outlets do not satisfy the legal criteria for state action, and misguided claims that Section 230 gives them a subsidy provides no logical basis for treating them as state actors. Nor is common carrier treatment warranted. If the relevant market is publicly available expression, as critics seem to assert, then even the largest outlets have no plausible claim to market power. Normatively, to treat social media outlets as either state actors or common carriers would subject them to falsity-protecting constitutional rules and thus lead to a net increase in harmful conduct–lies, among other things. Public discourse would be better served by allowing media outlets to continue to refine their content moderation practices, as private speech outlets historically have done.

Arun on Facebook’s Faces

Chinmayi Arun (Yale Law School; Harvard University – Berkman Klein Center for Internet & Society) has posted “Facebook’s Faces” (Forthcoming Harvard Law Review Forum Volume 135) on SSRN. Here is the abstract:

The Facebook Oversight Board’s decision about the suspension of Donald Trump’s account is different from the Board’s other cases because it interests states. The ‘Trump Ban’ case affects the Board’s reputation and Facebook’s relationships with states and publics. We will not understand the case’s impact if we do not understand these relationships.

Scholarship about social media platforms discusses their relationship with states and users. The Essay is the first to expand this theorization to account for differences among states, the varying influence of different publics and the internal complexity of companies. Theorizing Facebook’s relationships this way includes less influential states and publics that are otherwise obscured. It reveals that Facebook engages with states and publics through multiple, parallel regulatory conversations, further complicated by the fact that Facebook itself is not a monolith. This Essay argues that Facebook has many faces – different teams working towards different goals, and engaging with different ministries, institutions, scholars and civil society organizations. Content moderation exists within this eco-system.

This Essay’s account of Facebook’s faces and relationships shows that less influential publics can influence the company through strategic alliances with strong publics or powerful states. It also suggests that Facebook’s carelessness with a seemingly weak state or a group, may affect its relationship with a strong public or state that cares about the outcome.

To be seen as independent and legitimate, the Oversight Board needs to show its willingness to curtail Facebook’s flexibility in its engagement with political leaders where there is a real risk of harm. This Essay hopes to show Facebook that the short-term retaliation from some states may be balanced out by the long-term reputational gains with powerful publics and powerful states who may appreciate its willingness to set profit-making goals aside to follow the Oversight Board’s recommendations.

Spiwak on A Poor Case for a “Digital Platform Agency”

Lawrence J. Spiwak (Phoenix Center for Advanced Legal & Economic Public Policy Studies) has posted “A Poor Case for a ‘Digital Platform Agency'” on SSRN. Here is the abstract:

For the past twenty-five years, the U.S. Government has increasingly looked to antitrust—rather than regulation—to protect consumers in the Internet Ecosystem. There is a growing school of thought that an antitrust-only approach has failed and is ill-suited for the Internet Ecosystem. Reform advocates worry the giant Internet Platforms—primarily Apple, Facebook, Amazon and Google—have grown too large and too dominant under antitrust’s watch (or alleged lack thereof). The unbridled growth of big tech along with the high evidentiary requirements and slow pace of antitrust cases have some reformers looking for alternative forums for oversight—forums with a more anticipatory, immediate, and interventionalist perspective. This paper examines one such proposal by former Federal Communications Commission (“FCC”) Chairman Tom Wheeler and his co-authors Phil Verveer and Gene Kimmelman (hereinafter the “Wheeler Proposal”).

Dissatisfied with existing regulatory institutions like the FCC and Federal Trade Commission, along with the long-standing consumer welfare standard under antitrust law (which the authors summarily dismiss as a “conservative litmus test for judicial appointments”) the Wheeler Proposal calls for the creation of a new “Digital Platform Agency” or “DPA”—complete with its own novel governing statute. Central to the argument for the DPA is that with the combination of “Digital DNA” and “cooperative engagement” with the industry, this new DPA will somehow be different from existing regulatory agencies and thus fully capable of regulating dynamic markets with minimal intrusion. The reality is that the Wheeler Proposal’s desired new statutory framework would give the DPA broad and unchecked regulatory powers over the entire Internet Ecosystem—including both tech platforms and Internet Service Providers alike.

Kesan & Zhang on When Is A Cyber Incident Likely to Be Litigated and How Much Will It Cost? An Empirical Study 

Jay P. Kesan (University of Illinois College of Law) and Linfeng Zhang (University of Illinois Department of Mathematics) have posted “When Is A Cyber Incident Likely to Be Litigated and How Much Will It Cost? An Empirical Study” (Connecticut Insurance Law Journal, Forthcoming) on SSRN. Here is the abstract:

Numerous cyber incidents have shown that there are substantial legal risks associated with these events. However, empirical analysis of the legal aspects of cyber risk is largely missing in the existing literature. Based on a dataset of historical cyber incidents and cyber-related litigation cases, we provide one of the earliest quantitative studies on the likelihood of cyber incidents being litigated and the cost of settling a cyber-related case. Using regression models, we showed that some company and incident characteristics play an important role in determining the litigation probability and settlement costs, and the models proposed in the paper display good explanatory power. Our findings show that the lack of Article III standing is commonplace in cyber-related cases and that solely relying on the common law system makes it difficult for victims of malicious data breaches to sue and receive legal remedies. In addition, we demonstrate that our findings have valuable implications for enterprise risk management in terms of how the legal risk associated with different types of cyber risk should be properly addressed.

Almada on Automated Decision-Making as a Data Protection Issue

Marco Almada (European University Institute – Department of Law) has posted “Automated Decision-Making as a Data Protection Issue” on SSRN. Here is the abstract:

Artificial intelligence techniques have been used to automate various procedures in modern life, ranging from ludic applications to substantial decisions about the lives of individuals and groups. Given the variety of automated decision-making applications and the different forms in which decisions may harm humans, the law has struggled to provide adequate responses to automation. This paper examines the role of a specific branch of law — data protection law — in the regulation of artificial intelligence. Data protection law is applicable to automation scenarios which rely on data about natural persons, and it seeks to address risks to these persons through three approaches: allowing persons to exercise rights against specific automated decisions, disclosing information about the decision-making systems and imposing design requirements for those systems. By exploring the potentials and limits of such approaches, this paper presents a portrait of the relevance of data protection law for regulating AI.

Smith on Weaponizing Copyright

Cathay Smith (The University of Montana Alexander Blewett III School of Law) has posted “Weaponizing Copyright” (35 Harvard Journal of Law & Technology (Forthcoming)) on SSRN. Here is the abstract:

Copyright grants authors exclusive rights in their works in order to encourage creation and dissemination of socially valuable works. It permits copyright owners to assert their copyright against violations of those rights when necessary to protect their market exclusivity and economic interests. Increasingly, however, copyright is being used by individuals to achieve other objectives. This Article examines the increasingly widespread phenomenon of individuals using copyright to vindicate noncopyright interests, which this Article refers to as “weaponizing copyright.” In some cases, copyright is weaponized to silence criticism and legitimate speech. In other instances, the objective is to erase facts and make information disappear. Some assertions of copyright are intended to punish or retaliate for some perceived wrongdoing. Other assertions of copyright involve attempts to protect the reputation and dignity of copyright owners. Another objective is to protect privacy in personal and intimate information. In none of these scenarios are copyright owners seeking to protect their legitimate market or economic interests in their copyrighted works, the intended purpose of copyright.

Through exploring recent and high-profile instances of copyright weaponization involving Harvey Weinstein and Ronan Farrow, Pepe the Frog and InfoWars, Success Kid and Steve King, Navy SEALS and the Associate Press, PewDiePie, Dr. Dew, the McCloskeys, Netflix Films, Jehovah’s Witnesses, and others, this Article exposes the increasingly widespread practice of copyright weaponization. It explains how copyright became the weapon par excellence for individuals to punish, erase, suppress, protect, and vindicate noncopyright interests, and why individuals choose to weaponize copyright instead of pursuing claims under other laws. It also pushes back on the frequently accepted presumption that weaponizing copyright is always harmful and must be discouraged by exploring the power dynamics and blurry lines between weaponization by aggressors to punish, erase, suppress, and weaponization by the vulnerable to protect, preserve, and defend. Ultimately, this Article attempts to resolve two important questions: whether copyright should serve to protect some noncopyright interests but not others, and whether there is a fair and just way to manage the increasingly pervasive practice of copyright weaponization.

Recommended.

Guggenberger on The Essential Facilities Doctrine in the Digital Economy: Dispelling Persistent Myths

Nikolas Guggenberger (Yale University – Yale Information Society Project; Harvard University – Berkman Klein Center for Internet & Society) has posted “The Essential Facilities Doctrine in the Digital Economy: Dispelling Persistent Myths” (Yale Journal of Law & Technology, forthcoming) on SSRN. Here is the abstract:

The antitrust ‘essential facilities’ doctrine is reawakening. After decades of rejection and decline, the doctrine’s approach of granting access rights to facilities for which there is no reasonable alternative in the market has received several high-profile endorsements across the political spectrum. While courts have mainly applied the doctrine to physical infrastructure, its potential now lies in addressing the gatekeeping power of online platforms. However, despite its recent endorsements, the doctrine’s criticism from the past decades lingers. Many of the objections to the essential facilities doctrine are fueled by persistent myths and misconceptions, most prominently related to the doctrine’s economic justification, its administrability, and its propensity to entrench monopoly power. This Essay addresses these common objections and paves the way for the much-needed application of the essential facilities doctrine to the digital economy.

Recommended.

Shope on The Bill of Lading on the Blockchain: An Analysis of its Compatibility with International Rules on Commercial Transactions

Mark Shope (National Yang Ming Chiao Tung University; Indiana University Robert H. McKinney School of Law) has posted “The Bill of Lading on the Blockchain: An Analysis of its Compatibility with International Rules on Commercial Transactions” (Minnesota Journal of Law, Science & Technology, Vol. 22, 2021) on SSRN. Here is the abstract:

This article examines the legal compatibility of a blockchain bill of lading under the following UNCITRAL works: the Model Law on Electronic Commerce, the Model Law on Electronic Signatures, the Convention on the Use of Electronic Communications in International Contracts, the Rotterdam Rules, and the Model Law on Electronic Transferable Records. The bill of lading has been around for centuries, shaping the cross-border sales landscape while at the same time being shaped by it. Blockchain technology is providing an opportunity to assess how various industries are conducting business, including the cross-border sales landscape. The compatibility of blockchain with bills of lading may seem unusual, since the former may be perceived as a new, disruptive technology originally used to trade cryptocurrency and the latter may be perceived as a centuries old, outdated solution that has resisted change. This article attempts to show that these two systems can in fact be compatible with each other and be compatible with international rules on commercial transactions, specifically as they relate to the bill of lading. Blockchain could be the technology that will put an end to the drawbacks of paper bills of lading, and the bill of lading system, if fully adopted, could be the application that develops blockchain technology to its full potential in the shipping industry.

Shchory & Gal on Market Power Parasites: Abusing the Power of Digital Intermediaries to Harm Competition

Noga Blickstein Shchory (University of Haifa, Faculty of Law) and Michal Gal (University of Haifa – Faculty of Law) have posted “Market Power Parasites: Abusing the Power of Digital Intermediaries to Harm Competition” (Harvard Journal of Law & Technology, Vol. 35, 2021) on SSRN. Here is the abstract:

Some digital information intermediaries, such as Google and Facebook, enjoy significant and durable market power. Concerns regarding the anti-competitive effects of such power have largely focused on conduct engaged in by the infomediaries themselves, and have led to several recent, well-publicized regulatory actions in the US and elsewhere. This article adds a new dimension to these concerns: the abuse of such power by other market players, which lack market power themselves, in a way which significantly harms the competitive process and undermines the integrity of the relevant in-formation market. We call such abusers “market power parasites.”

We provide three examples of parasitic conduct in online information markets: (1) black hat search engine optimization, (2) click fraud, and (3) fraudulent ratings and reviews. In each of these examples the manipulating parasite utilizes the infomediary’s market power to potentially turn an otherwise limited fraud into a manipulation of market dynamics, with significant anti-competitive effects.

This separation between power and conduct in the case of market power parasites creates an unwarranted lacuna which is not addressed by existing laws aimed at preventing abuses of market power. Anti-trust law does not capture such parasites because it only prohibits unilateral anti-competitive conduct if such conduct is engaged in by a monopolist. At the same time, fraud torts require proof of specific reliance and are therefore limited to a particular wrong, disregarding the broader competitive concerns resulting from parasitic conduct.

To bridge this gap, we suggest a fraud-on-the-online-information-markets rule, akin to the fraud-on-the-market rule in securities law. We propose to eliminate the rigid fraud tort requirement to prove reliance, and replace it with a presumption of reliance that will apply once the plaintiff proves harm to the integrity of an online infomediary. Our proposal strengthens competitors’ cause of action, releasing them from the arguably ill-fitting need to prove specific reliance, thereby increasing enforcement against the anti-competitive acts of market power parasites which harm the integrity of information in digital markets.

Bagaric, Svilar, Bull, Hunter & Stobbs on The Solution to the Pervasive Bias and Discrimination in the Criminal Justice: Transparent Artificial Intelligence

Mirko Bagaric (Director of the Evidence-Based Sentencing and Criminal Justice Project, Swinburne University Law School), Jennifer Svilar, Melissa Bull (Queensland University of Technology), Dan Hunter (Queensland University of Technology), and Nigel Stobbs (Queensland University of Technology – Faculty of Law) have posted “The Solution to the Pervasive Bias and Discrimination in the Criminal Justice: Transparent Artificial Intelligence” (American Criminal Law Review, Vol. 59, No. 1, Forthcoming) on SSRN. Here is the abstract:

Algorithms are increasingly used in the criminal justice system for a range of important matters, including determining the sentence that should be imposed on offenders; whether offenders should be released early from prison; and the locations where police should patrol. The use of algorithms in this domain has been severely criticized on a number of grounds, including that they are inaccurate and discriminate against minority groups. Algorithms are used widely in relation to many other social endeavors, including flying planes and assessing eligibility for loans and insurance. In fact, most people regularly use algorithms in their day-to-day lives. Google Maps is an algorithm, as are Siri, weather forecasts, and automatic pilots. The criminal justice system is one of the few human activities which has not embraced the use of algorithms. This Article explains why the criticisms that have been leveled against the use of algorithms in the criminal justice domain are flawed. The manner in which algorithms operate is generally misunderstood. Algorithms are not autonomous machine applications or processes. Instead, they are always designed by humans and hence their capability and efficacy are, like all human processes, contingent upon the quality and accuracy of the design process and manner in which they are implemented. Algorithms can replicate all of the high-level human processing but have the advantage that they process vast sums of information far more quickly than humans. Thus, well-designed algorithms overcome all of the criticisms levelled against them. Moreover, because algorithms do not have feelings, the accuracy of their decision-making is far more objective, transparent, and predictable than that of humans. They are the best means to overcome the pervasive bias and discrimination that exists in all parts of the deeply flawed criminal justice system.

Recommended.