What’s most exciting and romantic about cyberspace for many users is its openness, its newness, the difficulty of regulating it. As a new space perceived as distinct from our physical world, it can feel like a Wild West of competing laws, disparate cultures, and customs arising from the very different historic circumstances of sovereign nations. However, the power to flout the world’s borders also poses a threat to local customs and ways of life. How do we protect local control of global Internet trade without jeopardizing either human rights or the freedom that the World Wide Web seems to promise? This is the central question that Anupam Chander’s lucid, thoughtful and dispassionate survey of Trade 2.0 and cyberspace law, The Electronic Silk Road, addresses.
Chander discusses case law and histories from many different nations, emphasizing controversies in which a provider in one jurisdiction supplies services to another. He focuses in particular on the path from East to West, offering rich details about circumstances in Silicon Valley, India, and China, in particular. What was once a physical “Silk Road” along which caravans transported treasures, has become an electronic Silk Road not only for goods, but also for services and information.
Organizing around the Silk Road metaphor is a risky choice that, in less capable hands, could have made the material more difficult to understand. After all, Chander leaps from Silicon Valley ambition to outsourcing to India, from entertainment piracy to the issue of who controls Facebook, from free trade to China’s human rights violations. He even touches on online distance learning law schools. But by maintaining the centrality of the Silk Road metaphor, Chander offers a sense of continuity between age-old controversies (Trade 1.0) and a potentially disruptive new area of law that in many ways is still in its infancy. Through the metaphor, he counters radical opponents of regulation who argue cyberspace is and should be different from physical cross-border marketplaces.
Principles of Cyberspace Controversies
A major strength of The Electronic Silk Road is Chander’s ability to outline the broad strokes of cyberspace controversies and perhaps more importantly, his ability to carve out clear principles to follow in handling these disputes. Chander lays out the following categories of problems we face today in what he calls Trade 2.0: (1) legal roadblocks, (2) lack of legal infrastructure for cyberspace trade, (3) the open and uncensored nature of cyberspace and (4) twin dangers of Balkanization (creating local areas and borders within cyberspace) or Stalinization (assisting totalitarian governments in discovering and repressing dissidents).
In Chander’s ideal world, Trade 2.0 must be simultaneously liberalized (through technological neutrality and dematerialization) and regulated. By “technological neutrality,” Chander means online services must be challenged under the same legal regime as offline version. There cannot be a difference between how disputes dealing with online and offline services are handled. By “dematerialization” Chander means that online substitutes must be available for every physical facet of transactions: electronic signatures, electronic handshakes, and electronic identities, for example.
The next key piece of Chander’s argument is that glocalization is necessary and that’s where the argument gets more tricky. “Glocalization,” a portmanteau of “globalization” and “localization,” is a squishy concept that means an entity will abide by local law in those cases where the local law does not conflict with international law. It’s a sound idea, but in many cases, difficult to implement.
Similarly, other solutions proposed by Chander are stunningly simple, reliant on abstract principles rather than tangibles, reassuring the reader that the world is far more amenable to these principles than one might assume from reading case law and the news. To counteract the potential for Balkanization, Chander offers that countries need to harmonize. Of course. But how do you actually convince nations with vastly different histories not only to harmonize in theory, but also when it comes to real life disputes?
One concrete solution is reliance on the enforcement arm of the World Trade Organization. Chander touches upon this in a fascinating discussion of Antigua as a safe harbor for piracy of U.S. goods. However, he also acknowledges the WTO’s provisions may not be sufficient, writing: “As it currently stands, the WTO seems to lack the power to order a local regulation dismantled because it runs afoul of human rights.” Chander goes on to discuss a WTO treaty, the General Agreement on Trade in Services (GATS), but not with enough detail to satisfy those who are skeptical.
This discussion segues nicely into Chander’s next point. To respond to the threat of Stalinization, Chander argues that companies must adopt a policy of “do no evil” and abide by human rights laws. This is a straightforward moral issue, but again, how do we convince corporations that it is in their own best interests to follow human rights principles? History, even the history recounted by Chander, has shown corporations do not care enough about human rights; they care about their bottom line. Unlike straightforward trade disputes, human rights law has long lacked the teeth to enforce many of its provisions. Chander suggests multinational corporations need human rights lawyers. But again—how can corporations be convinced to pay for that?
Developments in Cyberspace Law
One of the cases that most clearly illustrates how cyberspace forces the intersection of moral and cultural issues with trade concerns is a lawsuit that was brought in France in 2000 by French anti-Semitism organizations. Yahoo! was sued for hosting auctions of Nazi memorabilia. French law bars the sales of Nazi paraphernalia as hate speech, and Yahoo! permitted people to post editions of Mein Kampf and find the websites of Holocaust deniers.
When Yahoo! denied it was technically capable of denying access to French citizens without also affecting American Internet users, the French court put together an expert panel to investigate. The panel found Yahoo! could use geolocation technology to identify and target French users with 70% accuracy. The French court concluded Yahoo! was technically capable of filtering what the French found to be hate speech in order to prevent French access to it and abide by French law.
Yahoo! brought a lawsuit in a United States district court asking the court to declare the French judicial decision unenforceable. Meanwhile it also changed its policies somewhat, barring the sale of Nazi artifacts, but not books or films. The lawsuit raised First Amendment concerns, as well as a smorgasbord of other fascinating concerns such as choice of law, forum-shopping, and legal imperialism. The district court found for Yahoo! on First Amendment grounds, but the Ninth Circuit dismissed the case in an anti-climactic decision, leaving major issues unresolved.
An interesting and up-to-the-minute aspect of the book is Chander’s discussion of offshore havens that offer freedom from the law. Chander describes Antigua in the 1990s as striving to be the “Las Vegas of cyberspace.” Back then, Antigua profited hugely from online gambling. When the United States deemed cross-border online gambling illegal through the Unlawful Internet Gaming Enforcement Act, Antigua’s gambling profits were slashed by more than half. Antigua appealed to the World Trade Organization arguing this was an unfair trade restraint. The WTO agreed. The United States had one year to amend its laws on cross-border online gambling, but elected not to do so.
In 2013, the World Trade Organization relied on a dispute resolution mechanism, the WTO’s Trade-Related Aspects of Intellectual Property Rights agreement (TRIPs), to allow Antigua to cross-retaliate by exploiting United States intellectual properties in the same amount as they had been damaged by the United States’ decision (up to $21 million a year). With TRIPs, intellectual property rights can be used to punish WTO member nations. This is a punitive provision the United States originally pushed for, and it may come back to bite the entertainment industry: Antigua has become a safe harbor for piracy of U.S. intellectual properties. It remains to be seen whether the United States will compensate Antigua rather than permit it to exist as a haven for what would otherwise be piracy, but not as closely discussed by Chander is the United States’ discomfort with the WTO decision. A spokeswoman for the United States Trade Representative warned that Antigua’s piracy would be an impediment to foreign investment in the Antiguan economy.
Chander also uses a dispute between Russian website ALLofMP3 and the United States to support his argument that the WTO offers effective mechanisms to enforce international law. In that case, ALLofMP3 allowed users to download music albums for less than a dollar, providing some stiff competition for iTunes, which costs 99 cents per song. The recording industry filed a copyright infringement suit and tried to get credit card companies to refuse to process users’ payments. When these efforts failed, a U.S. Trade Representative suggested that Russia’s failure to protect IP rights should bar its entry into the WTO. In order to gain entry into the WTO, Russian authorities worked to shut down ALLofMP3. When Russia succeeded in shutting down the website, it gained admission.
Notwithstanding fascinating examples, lively storytelling, and non-radical descriptive principles, the book should have given more attention to the difficulties of full-scale implementation as they affect not just corporations, but also the consumers of corporate services. Although he chooses to broach the subject and thereby expand the scope of the book, Chander did not grapple quite as much with the problem of enforcing meaningful international human rights laws in light of international business interests as he could have.
He notes the reason for the difficulty in implementation towards the end of the book when discussing “the Global Network Initiative.” This is an initiative crafted in 2008 by human rights organizations, civil society groups working with Google, Microsoft, and Yahoo! It allows those three companies to stay in repressive states if they have put in place procedures that safeguard freedom of expression and privacy, including human rights impact assessments. It also allows members to share intelligence and strategy when dealing with a human rights issue.
The ambition is admirable, but the lack of participation by a large number of corporations and the Global Network Initiative’s lack of teeth leave the initiative vulnerable. Enforcement has always been a huge hurdle for international human rights law. The idea that an international body should have the power to enforce laws that lead to results different or modified from those policies adopted within the United States, for example, remains years from political and public acceptance.
Notwithstanding this criticism, Chander’s overall discussion of how various kinds of exchanges and relationships among humans should develop in the incipient field of cyberspace law is a vital one. Weaving together interesting facts with big ideas and concrete cases, Chander’s book is a fascinating and lucid introduction to Trade 2.0 law for students, politicians and business leaders. The Electronic Silk Road is an accessible, robust and balanced piece of scholarship.