Cooper on Congressional Surveillance

Aaron Cooper (Georgetown University Law Center) has posted “Congressional Surveillance” (American University Law Review, Vol. 70, No. 1799, 2021) on SSRN. Here is the abstract:

In recent years, Congress has increasingly used electronic surveillance in high-profile investigations. Reactions to what this Article calls “congressional surveillance” indicate a deep unease among both legal scholars and the broader public about the nature of Congress’s surveillance authority and its normative implications. Despite our ongoing preoccupation with government surveillance, congressional surveillance remains largely unexplored. There is virtually no discussion of how congressional surveillance is treated under key statutory and Fourth Amendment constraints; no consideration of the process or political limits of congressional surveillance; and little scrutiny of congressional surveillance as a tool within the separation of powers.

This Article fills that gap by presenting the first scholarly treatment of congressional surveillance. It argues that to address congressional surveillance, we must first understand its hybrid features of both government surveillance and congressional political power.

Specifically, the Article makes two contributions. First, the Article argues that congressional surveillance operates under fundamentally different constraints than traditional government surveillance. Congressional processes and politics (“process limits”) constrain congressional surveillance more than established statutory and Fourth Amendment mechanisms (“external limits”) or the inherent constraints of congressional authority (“internal limits”).

Second, this Article argues that congressional surveillance is justified as an essential practice within the separation of powers. It offers legitimate benefits to Congress in inter-branch information disputes with the executive and in carrying out basic digital governance. The Article also argues that the Supreme Court’s decision in Trump v. Mazars USA, LLP mistakes a privacy concern that congressional surveillance poses as a threat to the separation of powers. At the same time, this Article rejects the traditional law enforcement approach to protecting individual privacy through judicial gatekeeping. Instead, the Article argues that the treatment of congressional surveillance must account for individual privacy interests while preserving Congress’s ability to assert itself as a co-equal branch—not the Mazars approach, and not a law enforcement approach, but something different.

Keller on “Foreign Censorship” (US ITC Testimony)

Daphne Keller (Stanford Cyber Policy Center) has posted “U.S. International Trade Commission Testimony” on SSRN. Here is the abstract:

This testimony responds to a Congressional inquiry on the subject of “foreign censorship.” It focuses on laws regulating Internet platforms, and because of the ITC’s trade focus also prioritizes issues with potential economic impact.

The initial filing June 24, 2021 filing addresses
(1) competing concepts of “censorship” in platform regulation,
(2) the role of informal government pressure or “jawboning” on platforms’ global speech rules,
(3) recent developments in non-U.S. governments’ formal claims of extraterritorial jurisdiction to regulate speech,
(4) emerging jurisdictional “hardball” practices, including “hostage” provisions in national laws regulating platforms, and
(5) potential economic and competitive impact of recent and pending platform law developments.

The post-hearing submission, addressing questions raised in the July 1, 2021 hearing, addresses
(1) developments in India,
(2) state action in intermediary liability laws,
(3) studies attempting to quantify or otherwise empirically assess the economic impact of intermediary liability laws,
(4) threats to end-to-end-encryption with both economic and speech-related consequences, with a list of experts and sources on the topic.

Hamilton et al. on Developing a Measure of Social, Ethical, and Legal Content for Intelligent Cognitive Assistants

Clovia Hamilton (SUNY Korea), William Swart (East Carolina University), and Gerald M. Stokes (SUNY Korea) have posted “Developing a Measure of Social, Ethical, and Legal Content for Intelligent Cognitive Assistants” (Journal of Strategic Innovation and Sustainability 2021) on SSRN. Here is the abstract:

We address the issue of consumer privacy against the backdrop of the national priority of maintaining global leadership in artificial intelligence, the ongoing research in Artificial Cognitive Assistants, and the explosive growth in the development and application of Voice Activated Personal Assistants (VAPAs) such as Alexa and Siri, spurred on by the needs and opportunities arising out of the COVID-19 global pandemic. We first review the growth and associated legal issues of the of VAPAs in private homes, banks, healthcare, and education. We then summarize the policy guidelines for the development of VAPAs. Then, we classify these into five major categories with associated traits. We follow by developing a relative importance weight for each of the traits and categories; and suggest the establishment of a rating system related to the legal, ethical, functional, and social content policy guidelines established by these organizations. We suggest the establishment of an agency that will use the proposed rating system to inform customers of the implications of adopting a particular VAPA in their sphere.

Segura et al. on Car Accidents in the Age of Robots

Adrian Segura (Department of Law, Universitat Pompeu Fabra) et al. have published “Car accidents in the age of robots” with the International Review of Law & Economics. Here is the abstract:

In this paper, we compare liability rules in a world where human-driven and fully-autonomous cars coexist. We develop a model where a manufacturer can invest to improve the safety of autonomous cars. Human drivers may decide to purchase a fully-autonomous car to save precaution costs to avoid road accidents and shift liability to the car manufacturer. As compared to the negligence rule, a strict liability regime on both human drivers and car manufacturers is proved to be a superior policy. In particular, strict liability leads to more efficient R&D investments to enhance the benefits of the technology and favors the adoption of fully-autonomous cars. We also recommend that users of fully-autonomous cars make a technology-dependent payment to a third-party if there is an accident to discipline their activity levels.

Ramirez on Spousal Wiretaps in the Digital Age

Karli Ramirez has posted “To Catch a Snooping Spouse: Reevaluating the Roots of the Spousal Wiretap Exception in the Digital Age” (170 U. Pa. L. Rev. (Forthcoming)) on SSRN. Here is the abstract:

Growing concerns over digital privacy can easily create tension in romantic relationships, including marriages. The Federal Wiretap Act is one example of a statutory vehicle for deterring and punishing spying in spousal relationships, but it is an unavailable tool in the Second and Fifth Circuits because of a judge-made spousal exception to the Act in those jurisdictions. Intercepting communications between one’s spouse and a third party is permissible under the spousal exception, making it difficult to hold spying spouses accountable for their actions. This work argues that because the spousal exception was created at the time of continued institutionalized subordination and limited privacy rights of women, two exceedingly outdated and sexist notions, the spousal exception has no basis in modern society and can no longer be seen as good law.

Parsons on Tax’s Digital Labor Dilemma

Amanda Parsons (Columbia Law School) has posted “Tax’s Digital Labor Dilemma” on SSRN. Here is the abstract:

Digitalization has reshaped the relationship between companies and their customers and users. Customers and users increasingly serve a dual role. They are not only consumers but also producers, creating content and data. They are a value-creating workforce, functioning as “digital laborers.” Under the current U.S. international tax system, the presence of digital laborers in a country does not grant that country taxing rights over income stemming directly from those digital laborers’ content and data creation. As a result, what are essentially the same business activities—workforces creating products and performing services for a company—are taxed differently when they are performed by digital laborers rather than a traditional workforce. This inconsistency and the accompanying outcome that countries cannot tax corporate income arising from extensive business activities within their borders has led to cries that the current system is unfair.

Recent reforms addressing this outcome, including digital services taxes and proposals granting taxing authority over residual profits to market jurisdictions, most notably the OECD Pillar One Blueprint, share a common weakness. They do not recognize the function of digital laborers as producers in the modern economy. As a result, they overturn the theory of source-based taxation as a taxing right granted to the country of production, not the country of consumption, as well as introduce major structural changes to the international tax system—all to correct an unfairness that can be remedied under the system’s current theoretical framework and structure.

This Article rejects the notion that these major theoretical and structural changes are necessary or even an appropriate method to allow digital laborers’ home countries to tax income directly related to their work. Instead, the international tax system should recognize digital laborers’ role as a new type of workforce for companies and, accordingly, allow their home countries to tax income related to their work under the existing application of the source principle and with more incremental structural reforms. In addition to minimizing disruption in international tax law, this approach brings a return of coherence and a sense of fairness by taxing equivalent economic activities equivalently.

Jiang on Technology-Enabled Co-Regulation as a New Regulatory Approach to Blockchain Implementation

Jiaying Christine Jiang (NYU Law) has posted “Technology-Enabled Co-Regulation as a New Regulatory Approach to Blockchain Implementation” on SSRN. Here is the abstract:

Blockchain technology has great potential to reshape the financial industry. However, the existing policy and regulatory regimes fail to provide a supportive environment for blockchain technology to fulfill its potential. In this article, I propose technology-enabled co-regulation as a new approach to blockchain implementation, especially in the financial markets. This approach has two distinctive elements: a collaborative environment and a technology-enabled mechanism. A collaborative environment consists of regulatory and industry sandboxes in which regulators and industry representatives can experiment with novel ideas. A technology-enabled mechanism is empowered by regulatory technologies (RegTech) and supervisory technologies (SupTech) that support compliance with regulatory and reporting requirements and facilitate supervisory obligations. This technology-enabled co-regulation can help to achieve policy and regulatory goals: a fair and efficient market, financial stability, consumer and investor protection, law enforcement efficiency, and, most importantly, technology innovation. Technology-enabled co-regulation is preferable to traditional command-and-control regulation and self-regulation. Its collaborative and technological elements are also more advanced than a simple co-regulation is. To reach this conclusion, I conducted an impact assessment of proposed regulatory options. The impact assessment consists of five analytic steps, asking the following questions: What problems have emerged from existing policies and regulations? What are the objectives of the proposed regulations? What are the regulatory options? What are the possible impacts? How do the options compare?

Logue & Sniderman on The Case for Banning (and Mandating) Ransomware Insurance

Kyle D. Logue (University of Michigan Law School) & Adam B. Shniderman (University of Michigan Law School) have posted “The Case for Banning (and Mandating) Ransomware Insurance” on SSRN. Here is the abstract:

Ransomware attacks are becoming increasingly pervasive and disruptive. Not only are they shutting down (or at least “holding up”) businesses and local governments all around the country, they are disrupting institutions in many sectors of the U.S. economy — from school systems, to medical facilities, to critical elements of the U.S. energy infrastructure as well as the food supply chain. Ransomware attacks are also growing more frequent and the ransom demands more exorbitant. Those ransom payments are increasingly being covered by insurance. That insurance offers coverage for a variety of cyber-related losses, including many of the costs arising out of ransomware attacks, such as the costs of hiring expert negotiators, the costs of recovering data from backups, the legal liabilities for exposing sensitive customer information, and the ransom payments themselves. Some commentators have expressed concern with this market phenomenon. Specifically, the concern is that the presence of insurance is making the ransomware problem worse, on the following theory: Because there is ransomware insurance that covers ransom payments, and because paying the ransom is often far cheaper than paying the restoration costs and business interruption costs also covered under the policy, there is an increased tendency to pay the ransom — and a willingness to pay higher amounts. This fact, known by the criminals, increases their incentive to engage in ransomware attacks in the first place. And the demand for insurance increases; and the cycle continues.

This Article demonstrates that the picture is not as simple as this story would suggest. Insurance offers a variety of pre-breach and post-breach services that are aimed at reducing the likelihood and severity of a ransomware attack. Thus, over the long-term, cyber insurance has the potential to lower ransomware-related costs. But we are not there yet. This Article discusses ways to help ensure that ransomware insurance is a force for good. Among our suggestions are a limited ban on indemnity for ransomware payments with exceptions for cases involving threats to life and limb, coupled with a mandate that property/casualty insurers provide coverage for the other costs of ransomware attacks. We also explain how a government regulator could serve a coordinating function to help cyber insurers internalize the externalities associated with the insurers’ decisions to reimburse ransomware payments, a role that is played by reinsurers in the context of Kidnap-and-ransom insurance.

Widen on Autonomous Vehicles, Moral Hazards & the ‘AV Problem’

William H. Widen (Miami Law) has posted “Autonomous Vehicles, Moral Hazards & the ‘AV Problem'” on SSRN. Here is the abstract:

The autonomous vehicle (“AV”) industry faces the following ethical question: “How do we know when our AV technology is safe enough to deploy at scale?” The search for an answer to this question is the “AV Problem.” This essay examines that question through the lens of the July 15, 2021 filing on Form S-4 with the Securities and Exchange Commission in the going public transaction for Aurora Inventions, Inc.

The filing reveals that successful implementation of Aurora’s business plan in the long term depends on the truth of the following proposition: A vehicle controlled by a machine driver is safer than a vehicle controlled by a human driver (the “Safety Proposition”).

In a material omission for which securities law liability may attach, the S-4 fails to state Aurora’s position on deployment: will Aurora delay deployment until such time as it believes the Safety Proposition is true to a reasonable certainty or will it deploy at scale earlier in the hope that increased current losses will be offset by anticipated future safety gains?

The Safety Proposition is a statement about physical probability which is either true or false. For success, AV companies need the public to believe the Safety Proposition, yet belief is not the same as truth. The difference between truth and belief creates tension in the S-4 because the filing both fosters a belief in the Safety Proposition while at the same time making clear there is insufficient evidence to support the truth of the Safety Proposition.

A moral hazard results when financial pressures push for early deployment of AV systems before evidence shows that the Safety Proposition is true to a reasonable certainty. This problem is analyzed by comparison with the famous trolley problem in ethics and consideration of corporate governance techniques which an AV company might use to ensure the integrity of its decision process for deployment. The AV industry works to promote belief in the safety proposition in the hope that the public will accept that AV technology has benefits, thus avoiding the need to confront the truth of the Safety Proposition directly. This hinders a meaningful public debate about the merits and timing of deployment of AV technology, raising the question of whether there is a place for meaningful government regulation.

Recommended.

Lehr on Smart Contracts, Real-Virtual World Convergence and Economic Implications

William Lehr (MIT) has posted “Smart Contracts, Real-Virtual World Convergence and Economic Implications” on SSRN. Here is the abstract:

Smart Contracts (SCs) are usually defined as contracts that are instantiated in computer-executable code that automatically executes all or parts of an agreement with the assistance of block-chain’s distributed trust technology. This is principally a technical description and results in an overly narrow focus. The goal of this paper is to provide an overview of the rapidly evolving multidisciplinary literature on Smart Contracts to provide a synthesis perspective on the economic implications of smart contracts. This necessitates casting a wider-net that ties SCs to the literature on the economics of AI and the earlier Industrial Organization literature to support speculation about the role of SCs in the evolution of AI and the organization of economic activity. Accomplishing this goal builds on a repurposing of the Internet hourglass model that puts SCs at the narrow waist between the real (non-digital) and virtual (digital) realms, serving as the connecting glue or portal by which AIs may play a larger role in controlling the organization of economic activity.