Law and Technology, Science, Communication

The Federal Trade Commission, a US agency created in 1914 to police the problem of 'bigness', has evolved into the most important regulator of information privacy - and thus innovation policy - in the world. Its policies profoundly affect business practices and serve to regulate most of the consumer economy. In short, it now regulates our technological future. Despite its stature, however, the agency is often poorly understood by observers and even those who practice before it. This volume by Chris Jay Hoofnagle - an internationally recognized scholar with more than fifteen years of experience interacting with the FTC - is designed to redress this confusion by explaining how the FTC arrived at its current position of power. It will be essential reading for lawyers, legal academics, political scientists, historians and anyone else interested in understanding the FTC's privacy activities and how they fit in the context of the agency's broader consumer protection mission.

Summary

In Chapter 1 it was proposed that we are living through an Electronic Renaissance, with the global acceptance of modern communications, increased data storage and transfer capacities enabling interaction on an unprecedented level. It’s not just big business and governments with this communications capacity; individuals have been quick to take up computer use and now use the basic mobile phone as a mass communication instrument. Each incremental advance follows principles of endogenous order. Out of the chaos of vast technological capacity, entrepreneurial players and a willing and eager global market comes an embracement of media for social and entertainment purposes by a substantial proportion of the world’s population.

Social media gives individuals, as well as large and small businesses, a direct way to interact, and to have access to and promote products and services. Businesses using social media channels such as Facebook, Twitter, LinkedIn and YouTube have a responsibility to ensure that content on their pages is accurate and legally compliant, irrespective of who put it there.

Social media has become the next stage of communications, bypassing post and telephone and becoming truly international. Social media may be briefl y defined as online networking facilitating social interaction amongst individuals.

More broadly, social media refers to the numerous online applications which permit the creation and exchange of personal information such as text, photos and videos. Social media differs from standard forms of media, such as newspapers, television and radio. Social media facilitates mass individual communications to the global community. As a corollary, social media is community-based for individuals, allowing communications around particular interests, personal content sharing, collaborations, networking and exposure.

Summary

Because of the very architecture of personal space in the offline world, social interactions used to be relatively private. The retelling of anecdotes and questionable behaviour in a social environment would, until the last decade or two, be taken with a grain of salt and with some expectation of embellishment or exaggeration. Rarely would an employer or others be faced with hard evidence, such as photographs, statements of admission by the employee or digital logs. Today, however, social media allows, if not encourages, such actions. In the words of the NSW Industrial Relations Commissioner, there exists:

greater risk of private exchanges over the Internet becoming public than was ever the case with private spoken conversations. Exchanges over ‘Facebook’ and other social media appear to have an increasing likelihood of surfacing publicly at some later time.

And of a Fair Work Australia Commissioner:

What might previously have been a grumble about their employer over a coffee or drinks with friends has turned into a posting on a website that, in some cases, may be seen by an unlimited number of people. Posting comments about an employer on a website (Facebook) that can be seen by an uncontrollable number of people is no longer a private matter but a public comment.

It is well accepted that behaviour outside working hours may have an impact on employment.

The underlying relationship in the workplace between the employer and employee has not changed, but the use and misuse of social media facilitates the free flow of information to a wider audience, potentially harming the interests of the employer (and, indeed, of the employee). A ban on the use of such devices might be a sledgehammer reaction, and in many businesses would be impossible, particularly where social interaction is encouraged for the benefit of the business. Restricting use after hours has its own problems. In Stutsel v Linfox Australia Pty Ltd the Commissioner commented that Facebook communication was of the nature ‘of a group of friends letting off steam and trying to outdo one another in being outrageous … [and] has much of the favour (sic) of a conversation in a pub or cafe, although conducted in an electronic format’.

Summary

The systemisation of laws and societies’ penchant for structure and order reflect the endogenous nature of humanity’s development. Each culture develops a principle-based rule set to administer justice. The more complex the society, the richer the system. Rules of evidence are one subset of these developments which provide collective certainty, predictability and justice. Many of these principles have evolved over eons, and now are put the test by changes wrought by the emergence and development of technology. The regulations depend upon the perspective of the players who fashion, mostly unconsciously, community norms. Societies’ ‘norms and institutions’ are necessary for a functioning society; the ‘more complex’ the society the greater the structure; however, state action can ‘undermine or destroy these norms and institutions, with potentially catastrophic effect’.

It is said that a verbal contract is worth the paper it is written on. Although the common law recognises oral contracts, this oxymoron reflects the problems associated with proving not only the terms of a verbal contract, but also its very existence. The law of evidence is central to legal systems. Its restraints, rules and procedures aim to provide certainty and reliability within the criminal and civil justice systems. New and unanticipated problems have emerged when these historic and sometimes antiquated rules of evidence have been applied to electronic documents and records.

Summary

The Australian Communications and Media Authority (ACMA) is responsible for administering legislation regarding the content and regulation of most forms of electronic communications. This chapter deals with the role of ACMA and the regulation of internet, television and radio communications.

The Australian Communications and Media Authority

ACMA is responsible for the regulation of broadcasting, radio communications, telecommunications and online content. Its responsibilities include:

Summary

Prior to digital storage and the internet, the nature and architecture of the storage of information made access difficult and copying relatively arduous and time consuming. In the 21st century, information of all types is created, shared and, significantly, reproduced digitally. Material placed online is subject to unrestricted reproduction. The demand for all forms of information is a vast opportunity for order and structure – and for exploitation. The sheer number of users, and their voracious appetites, leads to increased supply. This is demonstrated by the vast number of websites which have emerged to reproduce material subject to copyright, and the almost complete disregard for the law by individual users.

The internet facilitates the swift reproducing and exchange of digital material. Hyperlinking and framing can offer new possibilities for infringement of copyright. Works protected by copyright, such as music and videos, can be easily transferred in peer-to-peer dealings. Such transfers have become the target of copyright owners. This chapter explores these issues and developments and the relationship between copyright and electronic commerce. It is not intended to state the law relating to copyright, other than via a brief overview. The advent of electronic commerce and the internet have necessitated a rethink of intellectual property issues by the World Intellectual Property Organization (WIPO), the courts and the legislature. The proliferation of material on the internet – written, aural and graphic – has posed new questions and resulted in the creation of new rights internationally.

Summary

Social media permits people to engage in social discourse with hundreds of friends and associates. Online, everyone is a publisher. People use handheld devices to communicate to individuals, small and large groups and the world at large at any time – while waiting in queues, on public transport, whilst walking and indeed whilst driving. One modern danger is that users are not circumspect when texting off-the-cuff remarks or tweeting immediate and spontaneous responses. Each day users send 250 billion emails and make 600 million contributions to Twitter. Defamation is a real issue because of the audience which can access such discourses. When written, rather than spoken, words take on a sterner and more deliberate meaning than may have been intended, and injudicious replies may be sent in the heat of the moment.

From the beginning, the boundaries of appropriate and acceptable behaviour on the internet have been challenged. The notion that the internet is the last bastion of free speech has produced a general mindset that the laws that bind and regulate social behaviour should not apply in cyberspace. There has developed a sense that anything written in a digital forum should somehow be immune from oversight and censure. Courts internationally have disagreed with this view and have applied defamation laws to social media.

Summary

Information in cyberspace is eternal. The very architecture of cyberspace facilitates information flow, the antithesis of privacy. Digital files reproduce faithfully, permitting an avalanche of material to be viewed, shared and stored. Social media allows millions to share thoughts, images and videos of brilliant quality and (sometimes) questionable taste. Never has information been so available at our fingertips. The expression ‘going viral’ has entered the vocabulary to describe this phenomenon. It is insidious. It is glorious. In any event it encroaches at a galloping pace on many individuals’ privacy.

‘Privacy’ has numerous meanings, and its importance varies greatly among individuals, communities, organisations and governments. It is an aspect of freedom and human rights. Civil libertarians may believe that our actions and behaviour should not be subject to public or governmental scrutiny; protectionists may accept such erosions for the greater good in the name of law and order.

Historically, governments seem to have pursued increasing and systemic invasions of privacy in the name of law and order, fighting crime and terrorism. However, their role is in fact to ensure and balance security issues and the proper protection of the privacy rights of the individual. In the 1990s the Clipper Chip was proposed by the US Government, ostensibly for the purpose of allowing the government to override individual encryption to protect society from ‘gangsters, terrorists and drug users’. Such a process would have allowed the government to access and decipher all encrypted files. The proposal was unsuccessful. In Australia in 1984, an attempt to pass a Privacy Act failed because it set in place an anti-privacy provision: a central national identification card.

Summary

When a radically new situation is presented to the law it is sometimes necessary to think outside the square … this involves a reflection upon the features of the Internet that are said to require a new and distinctive legal approach.

Cyberspace is an illusion. There is no such place. Many terrestrial norms do not and cannot apply to such a fictitious construct. Nevertheless, cyberspace users perceive metaphorical chat rooms, folders, files, shops, libraries and so forth. They live digital lives with digital personas in ‘places’ such as Second Life, Twitter and Facebook. The reality is that each step of the digital experience is rooted terrestrially. Traditional legal principles are applicable to the majority of electronic commerce disputes. Nevertheless, the operation of electronic commerce in cyberspace results in new circumstances to which legal jurists cannot readily apply established legal rules.

The borderless nature of the internet often hides or disguises the origin of particular websites and corresponding information. Questions sometimes arise as to the country or state whose courts have jurisdiction to adjudicate on a matter, and as to which law is to be applied. Courts also have to determine issues such as where conduct occurs – at the computer, the server, the place of business or residence or somewhere else? – and thus which time zone applies. This area of law is referred to as conflict of laws or private international law, and its principles are well established.

Summary

Commerce is typically about profit. It also always involves risk. Risk assessment in commerce involves consideration of such factors as the law of contracts, the parties, the goods or services and the legal forum. Many commercial parties have braved the new electronic commerce world without knowing or understanding the legal implications of their actions. In many instances commercial parties have embraced electronic commerce because of its efficiencies, and thus profits. A new order is emerging in this world in a manner not dissimilar to the onset of lex mercatoria.

In an attempt to ensure confidence, many international organisations have proposed treaties, model laws and protocols to encourage certainty and stability for international electronic commercial practices and in relation to laws of contract. The UNCITRAL Model Law on Electronic Commerce (Model Law) has proved the most popular, with significant international acceptance by national legislatures, including those of Australia and New Zealand. More recently the UN passed the Convention on the Use of Electronic Communications in International Contracts.

This chapter addresses the regulation of, and legislative responses to, electronic contracting. It challenges the wisdom of and necessity for legislation based on the Model Law, and the introduction of the concept of consent as a precondition for the application of selected legislative provisions. This chapter does not deal with the basic principles of contract law; they are dealt with most satisfactorily in many texts.

Summary

No. 20 of 2000

Version as at 1 January 2015

Part 1 – Preliminary

Purposes

The purposes of this Act are -

(a) to recognise that transactions effected electronically are not by that reason alone invalid;

(b) to provide for the meeting of certain legal requirements as to writing and signatures by electronic communication;

(d) to permit the recording and retention of information and documents in electronic form;

(e) to provide for the determination of time and place of dispatch and receipt of electronic communications;

(f) to stipulate when an electronic communication will bind its purported originator.

Commencement

This Act comes into operation on 1 September 2000.

Definitions

(1) In this Act -

addressee of an electronic communication means a person who is intended by the originator to receive the electronic communication, but does not include a person acting as an intermediary with respect to the electronic communication;

automated message system means a computer program or an electronic or other automated means used to initiate an action or respond to data messages in whole or in part, without review or intervention by a natural person each time an action is initiated or a response is generated by the system;

Summary

This chapter examines and contemplates law and culture in cyberspace. The role of law and indeed the rule of law have different dynamics in cyberspace as a consequence of the architecture of cyberspace and its anonymous, pseudonymous and borderless features. The resultant structural balance among technology, law and culture may be expressed as the ‘rule of cyberspace’. This spatial dimension, economic influence on human culture and the role of law and regulation together form a subculture which both impacts on and moulds electronic commerce.

First, the nature of cyberspace is examined. This is followed by consideration of theoretical bases for law and order in cyberspace. The rule of cyberspace emerges, by processes known as ‘spontaneous order’, from the environmental factors fashioning cyberspace. It is spontaneous order which best describes – and to a limited extent predicts – regulation for electronic commerce.

This chapter examines the juxtaposition of culture and cyberspace, a modern application of spontaneous order, and then uses a discussion of libertarian and classical approaches to predict the future of cyberspace.

Cultural and environmental juxtaposition with cyberspace

Human interaction tends towards order and has an aversion to chaos. Culture brings about communities, law, order and stability. And so it is for cyberspace and the rule of cyberspace.

Cyberspace is infused with a kind of spontaneous order , and has thus evolved protocols through public participation. No one controls cyberspace. There are many stakeholders and users, all with their own agendas, impacts and influences. Customs, usages and structure have emerged from human action and interaction, but not human command. Organising bodies do not know the diverse predilections and demands of the participants. The size, direction, extent and use of cyberspace have challenged forecasters. By incalculable actions and inputs - spontaneous order - cyberspace has gained structure and presence.

Summary

The first electronic contracts were entered into with the use of the telegraph in the 1830s; in the 1880s they could be entered into by the use of the telephone. The earliest reported case validating electronic signatures comes from the New Hampshire Supreme Court in Howley v Whipple in 1869, where the court stated:

It makes no difference whether [the telegraph] operator writes the offer or the acceptance in the presence of his principal and by his express direction, with a steel pen an inch long attached to an ordinary penholder, or whether his pen be a copper wire a thousand miles long. In either case the thought is communicated to the paper by the use of the finger resting upon the pen; nor does it make any difference that in one case common record ink is used, while in the other case a more subtle fluid, known as electricity, performs the same office.

The traditional signature has been the prime method a person uses as a proof of identity, and as a material expression of intent and execution of documents. A signature on a document indicates the provenance of the document and the intention of the signatory with regard to that document. With the advent of the electronic era, a form of signature is adopted for electronic documents. This chapter examines the regulation, use and security of electronic signatures and the types of electronic signatures, such as digital signatures, biometric signatures and Transport Layer Security (TLS) technology, being used in social media and electronic commerce.

Summary

Knowledge, information and electronic data of all forms are stored by the majority of the world’s population on complex range of devices and storage facilities. From large computer servers to personal tablets and mobile devices, storage has expanded in direct proportion to the advances in the capability and capacity in computing. In 2014 the number of mobile devices exceeded the number of desktop and laptop computers worldwide. Users are relying less and less on fixed storage devices and individual computer capacity. Entrepreneurs have quickly recognised the individual’s proclivity for gadgets, communications, photographic and video devices, as well as text and internet connections and communications, and have taken advantage of the spontaneous order which can arise from the chaotic juxtaposition of new technology, social media and the human spirit. The inevitable next step has been the creation of central storage facilities and computer resources to provide a reliable rapid use facility for all individuals.

Cloud computing promises fast, efficient and convenient storage and access networks and resources that are permanently at the fingertips of users. The promise may be premature as users evaluate the security and privacy risks. A reasonable and considered definition of cloud computing is:

Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.

The National Institute of Standards and Technology (NIST) lists five essential characteristics of cloud computing:

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Acknowledgments

PART III - CONCLUSION

Federal Trade Commission Privacy Law and Policy

Part 3 - Electronic Commerce

Part 1 - Introduction

3 - Social media law

Summary

6 - Social media and the workplace

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19 - Evidence of electronic records

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10 - Censorship online

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14 - Copyright issues in electronic commerce

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7 - Defamation in cyberspace

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8 - Privacy in cyberspace

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17 - Jurisdiction in cyberspace

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11 - Electronic commerce and the law of contract

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Appendix A - Electronic Transactions (Victoria) Act 2000

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2 - The rule of cyberspace

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Part 4 - Conclusion

13 - Electronic signatures

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Contents

5 - Cloud computing

Summary

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Federal Trade Commission Privacy Law and Policy

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