“Elephants and Mice Revisited: Law and Choice of Law on the Internet”

“Elephants and Mice Revisited:Law and Choice of Law on the Internet” Professor Peter P. Swire Moritz College of Law Ohio State University Penn Law Review Symposium November 12, 2004

Overview • Elephants and Mice • What we’ve learned since 1998 • When does choice of law matter on the Internet? • Surveillance as a (controversial) tool for increasing the enforceability of law on the Internet

I. Elephants and Mice • Metaphor for when law and choice of law most likely to be effective on the Internet • Elephants: • Powerful, thick skin, impossible to hide • Subject to jurisdiction & COL • Can lobby & influence laws • Will have to comply once laws are in force

Elephants and Mice • Mice: • Small and mobile: porn and piracy sites that can reopen elsewhere if shut down • Breed annoyingly quickly: new sites open • Hide offshore & in crannies of network • Jurisdiction often doubtful & rarely enter the light of open court to dispute COL

II. Since 1998 • 1998 article predicted or described areas for Internet COL disputes: • Areas of COL conflict: privacy; hate speech; treasonable/political speech; defamation; taxation; gambling; pornography; intellectual property • Areas of possible conflict: labor laws; professional licensing • Analysis of B-to-C E-Commerce

Not Predicted in 1998 • Spyware/adware: adware by large companies (elephants) and law can address that; some spyware by mice • Cybercrime was missing • Computer hacking • Computer viruses • Identity theft • Phishing

III. When does COL Matter on the Net? • The task here: COL as a dependent variable • When will the COL rule matter on the Internet? • Law works (despite tech counter-measures)? • Is there jurisdiction? • Lack of harmonization? • Lack of self-regulation? • IFF yes to all these, then COL rule matters

Technology and Law • Early romantic view that “the Internet treats censorship (or regulation) as damage, and routes around it” • In practice, have not seen much strong encryption, untraceable e-cash, & untraceable routing of communications • Tech counter-measures less than many predicted, so law more likely to be effective

Is There Jurisdiction? • For elephants, there will often be jurisdiction & ability to enforce judgments (assets in country) • Some elephants (Yahoo) defend with corporate separateness • May work legally, less desirable for “local” companies • For mice, less likely to have jurisdiction, and enforceability of judgments is even less

Is There Harmonization? • Some harmonization, such as for privacy (Safe Harbor) & IP (TRIPS) • Major gaps, such as privacy (Safe Harbor), hate speech, treason, defamation, gambling, taxation, etc. • Big change since 1998 is COE Cybercrime Convention • Dual criminality & cooperation in investigations

Is There Self-Regulation? • COL in E-Commerce minimized by other systems • Credit card agreements • Clicks and bricks retailers, with local law applying • eBay, with its own legal & reputation systems • These self-regulatory systems have won in the market (my Trustwrap article)

International COL May Matter • Even when a case survives the filters, international E-Commerce less than predicted in 1998 • E-Commerce growth has not matched the expectations of the bubble • Self-regulatory systems reduce COL • Direct, transnational sales to consumers less than expected

What’s Left? • The 1998 list against elephants: • Hate speech (Yahoo!) • Defamation (Australia case) • Privacy (future of the Safe Harbor) • Internet gambling (WTO action) • In short, important but limited categories of cases raise COL issues on the Internet

Conclusion: Surveillance? • There are numerous other actions, by mice, that cause harm over the Internet in the eyes of at least some countries, • Piracy • Spam • Child or other pornography • Hacker and virus attacks • Terrorist communications & attacks

Surveillance could “solve” these • The temptation is to increase surveillance of Internet usage so that these mice can’t hide • A key variable to how these harms get resolved among nations is likely to be the level of surveillance created over the Internet, more than decisions about COL

Conclusion • In the surveillance debates, the image of annoying-but-charming “mice” could become an image of rabid & dangerous “rats” • In the post-9/11 world, a major inquiry should be deciding in what ways and under what procedural protections surveillance of the Internet will exist. • That’s an important job (says the privacy scholar), but for another day

“Elephants and Mice Revisited: Law and Choice of Law on the Internet”