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Voluntary Initiatives As a Source of Policy-Making on the Internet

Konstantinos Komaitis

For many years, I have observed that the Internet is adopting many self-regulation frameworks to address a variety of issues. Indeed the Internet has benefited from self-regulation as an efficient way to address jurisdictional conflicts — particularly as compared to traditional law making. Since the Internet is global, jurisdiction is often the most difficult policy issue to address. To this end, voluntary initiatives are becoming increasingly popular in the digital space due to their ability to address dynamically issues related to the Internet. Voluntary, self-regulatory or industry-based are all terms used to identify initiatives that are produced and enforced by independent (private) bodies or trade associations and focus on addressing issues that have a limited scope and are of a specific subject matter.

The United States Patent and Trademark Office (USPTO) recently issued a request for input on voluntary best practices in the context of intellectual property. In light of this request and considering the newly formed Copyright Alert System (CAS) and other similar policy exercises around the world, the Internet Society offers its own reflections on voluntary policy initiatives. By outlining the advantages and disadvantages of self-regulation and identifying a set of best practices for self-regulation that include the need for periodic reviews, external and internal checks and, transparency, amongst others, the Internet Society wishes to promote the thesis that voluntary-based initiatives can prove efficient if they are carefully balanced and do not depart from the established principles and processes of rulemaking.

The scale of Internet growth is reflected in the shear complexity of crafting Internet policies and regulations; it is an undisputable fact that the Internet has put to test the efficiency of traditional law making and its ability to deal with emerging technology trends. In order to deal with the increasing gap between legal and technology frameworks, many policy makers turn to systems of self-regulation and voluntarism. These systems are not new — since lex mercatoria (law of the merchant) in the middle Ages, self-regulation has been a tool for regulators and policy makers to deal with complex commercial issues in an expedient manner.

Self-regulation mechanisms can be efficient and offer a plethora advantages, but they should not be considered a panacea. A clear rationale regarding their mandate and parameters is essential for self-regulation frameworks to address their intended purpose and stand the test of time. At the same time, tools for measuring the effectiveness of these approaches should also be in place to ensure that the outcomes are consistent with expectations and that they continue to meet the public interest over time.

Since the Internet is a global network of networks, national Internet public policies, whether they are based on self-regulation or traditional regulation, often have impacts beyond national borders. Thus, as voluntary-based mechanisms gain traction amongst policymakers as an alternative way to address complex online legal issues, these mechanisms will also have global implications. This is particularly true because, while self-regulatory tools are evolving in different jurisdictions, there are lessons to be learned across all of these experiences. Further, there are global policy lessons to be learned in terms of the effectiveness, processes and sustainability of these kinds of policy tools.

What follows is a set of thoughts concerning self-regulation. Self-regulatory frameworks are appealing because they can be narrowly tailored to deal with specific legal issues but these tools are not the solution to all problems. In fact, successful self-regulation can only happen within established and legitimate frameworks of rule-making.

Advantages and Disadvantages of Voluntary-based Initiatives

The Internet Society is, generally, in favor of industry-based initiatives to address various issues, including those related to intellectual property; however, we are also mindful of the risks associated with these approaches. Whether based on theories of delegation or contract law, facilitated by the State or being a by-product of a "self-enforcing power, stemming from the direct deprivation of a valuable right", the role of private bodies in self-regulatory environments is key. At the outset, such private entities could prove beneficial in overseeing market participants' actions through different processes such as standard setting, certification, monitoring, brand approval, warranties, product evaluation and arbitration.

Academic literature and market practices (e.g. the European Advertising Standards Alliance in Europe) indicate that for self-regulatory mechanisms to be successful they should include standards for real consent, which help ensure the legality and legitimacy of contractual agreements as part of private regulation. In cases where consent is not present, public legal institutions are required to specify the criteria that entitle private regulatory regimes to acquiescence and immunity. But, ultimately, it is adherence to minimum standards of justice and fairness that determine the success of industry-based initiatives. Rules, consequential to private regulatory efforts should ensure that — to the extent possible — interested and affected parties are able to participate in voluntary based initiatives on an equal footing.

Based on this set of minimum standards, private regulation offers some notable advantages in allowing the market to take the lead, offer a multitude of alternatives and ensure that fundamental values are protected by allowing interested parties to participate in the formation of rules and principles that are not subject to the cumbersome processes of traditional law making. As David Post, professor at Temple University and Fellow at the Center for Democracy and Technology, accurately put it: "We don't need a plan but a multitude of plans from among which individuals can choose, and the market [...] is most likely to bring that plenitude to us".

In a much similar vein, Robert Pitofsky, former Chairman of the Federal Trade Commission (FTC), referring to industry-led regulation, enumerated the following advantages:

  • Self-regulatory groups may establish efficient product standards;
  • Private standard setting can lower the cost of production;
  • Private regulation helps consumers evaluate products and services;
  • Self-regulation may deter conduct that is universally considered undesirable but outside the purview of civil or criminal law; and,
  • Self-regulation is more prompt, flexible and effective than government regulation.

Industry regulation, however, also has significant disadvantages. The recent failure of self-regulatory models in the financial markets leads many to question industry-based regulation as an efficient model. To this end, some scholars have challenged the legitimacy of private bodies, such as cyber-authorities, to deal with issues emanating from the Internet. Their main concern relates to the ability of such authorities to create policy and enforce rules that traditionally fall within the remit of the democratic state. In the words of a US scholar: "State-centered law — both legislation and constitutional adjudication — carries considerable weight in legitimizing creation beliefs and practices and delegitimizing others. [...] A cyberauthority, in contrast, would have to start from scratch".

One of the most worrying aspects of private regulation is, arguably, that many of its advantages are based on false premises and loose criteria. Amongst other things, private regulation may easily fail to protect democratic values; it can neglect basic standards of justice; and, it is often less accountable compared to traditional governmental rule making. More importantly, because of the Internet, self-regulation is increasingly initiated and imposed by new Internet sovereigns that do not necessarily operate within traditional principles of rule making. To this end, private regulation often suffers from lack of accountability and due process.

Effectiveness of Voluntary Initiatives

Various countries, including the United States and the United Kingdom, have consistently supported meaningful, consumer-friendly, self-regulatory regimes for various issues ranging from privacy to intellectual property. As the United States government has stated: "To be meaningful, self-regulation must do more than articulate broad policies and guidelines".

The Internet Society fully agrees with this premise — self-regulation emanating from voluntary based initiatives should extend to incorporate specific and reliable principles that allow participants and consumers/users to have a clear understanding regarding the delineation of the parameters, the scope of self-regulation and the accountability mechanisms for the public interest.

We will approach the effectiveness of self-regulation from the perspective of a) Accountable and Transparent Information Practices; and, b) Characteristics of Effectiveness.

A) Accountable and Transparent Practices

1. Access: At a minimum, users need to be provided with the option of having access to information regarding every voluntary-based mechanism that might affect them and their online experience. In this respect, every actor engaged in voluntary practices should take reasonable steps to ensure that users are kept updated and informed about the process and substance of such self-regulatory initiatives.

2. Enforcement Policies: Enforcement policies articulate the steps that will be taken when illegal action is detected. On this basis, users should be able to understand the scope of enforcement and the parameters of their activity.

3. Notification: Enforcement policies, especially those emanating from self-regulatory schemes, should be made known to users as much in advance as possible. Notification written in language that is clear and easily understood, should be displayed prominently, and should be made available before users are asked to sign any contract regarding their Internet connection.

4. Education: Two things are important in this context: first, education should reflect unbiased opinions and should be conducted by 3rd party trusted sources, including academia. Similarly, education should not be limited only to users but should extent to every single entity or individual who is part of the Internet ecosystem.

5. Data Security: Given the volume of data collected in such industry-based schemes, private bodies creating, maintaining, using or disseminating records of identifiable personal information must take reasonable measures to assure its reliability and take reasonable precautions to protect it from loss, misuse, alteration or destruction.

B) Characteristics of Effectiveness

For a self-regulatory regime to be effective, it needs to include mechanisms that assure compliance with its rules and appropriate recourse to an injured party when rules are not followed.

1. Due process: every voluntary-based initiative should adhere to basic and fundamental principles of justice and fairness, including, but not limited to, the right of a hearing, legal certainty and adherence to the rule of law.

2. Judicial safeguards: all voluntary-based initiatives should encompass internal and external checks and balances. One such balance is the right of an appeal. However, this right is not self-sufficient and should be accompanied by a process that is affordable and accessible; it should further incorporate rules that are clear and incentivize its use. Finally, it also requires independence and impartiality of all the participants.

3. Transparency: Disclosure of information to the public about voluntary schemes is another significant feature of voluntary-based initiatives. This information should include, but should not be limited to, the system's rationale, end goal, how it affects interested parties, etc.

4. Balanced and proportionate rules: Voluntary based mechanisms should strive towards creating rules that are balanced, reflect the rule of law and are proportionate.

5. Trust: Trust is becoming increasingly important in the spheres of policymaking and law crafting. Any voluntary-driven initiative should seek to build and create an environment of mutual trust first, amongst the actors setting up the system, but also between the actors to which the system is addressed.

6. Periodic reviews: All systems, including public ones, should be periodically reviewed and evaluated as to their effectiveness. Such reviews test the efficacy of policy mechanisms and their ability to provide answers to the issues they were originally created to address. In the context of the United States' Copyright Alert System (CAS), for instance, the need for a robust review after its first year of operation is key in identifying potential gaps and omissions, a possible revision of its safeguards, a reframing of its deliverables and the precise role of the various actors.

7. Public Interest: To the extent that self-regulation aims at setting standards that principally reflect industry needs, there is a potential for the standards to reflect the industry's interests rather than the public interest. It is, therefore, essential that self-regulation is neither collusive nor open-ended; it should not operate outside the wider regulatory framework or act independently. In such instances, the role of the government and public interest groups can aid in a monitoring function and lessen the opportunity for abuse and opportunistic changes to the self-regulatory mechanism.

Conclusion

Voluntary-based initiatives can prove valuable tools in the complex environment of policy making. Unlike public regulation, which is increasingly being seen as too slow to address the needs of a fast-paced Internet environment, self-regulation can provide efficient answers to important legal questions. But, self-regulation should not be seen as a cure for all the issues appearing in cyberspace. It is important that mechanisms based on industry initiatives include very specific and solid provisions relating to due process, fairness and justice; in addition, periodic review mechanisms as well as internal and external checks, including the right of an appeal, should also be parts of voluntary-based initiatives. To this end, a careful balance regarding goals and scope is necessary in order to ensure that self-regulation does not become a vehicle of abuse or misuse.

By Konstantinos Komaitis, Policy Advisor for the Internet Society. More blog posts from Konstantinos Komaitis can also be read here.

Related topics: Internet Governance, Policy & Regulation

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Comments

The Best Of Intentions Steven Levy  –  Jul 29, 2013 1:07 PM PDT

I agree with much of what Mr. Komaitis writes here and support the ideals espoused by the Internet Society. Any attempt at self-governance requires standards, self discipline, trust and, above all, good-faith cooperation and willingness to abide by the outcome of the process. I remain hopeful that the USPTO's efforts will be effective even though other recent attempts at self-governance such as ICANN have borne mixed results. While the multi-stakeholder model adopted by ICANN appears to be closer than ever to producing tangible results, it was, for many years, mired in delays, endless debate and a lack of giving meaningful voice to minority constituencies. Perhaps the lessons the be learned from that exercise are that self-governance is best suited to small and very specific issues and that at some point an duly-elected governing authority must be empowered to end debate, make policy and procedural decisions and then move on. How such authority is exercised will, of course, set the tone for future discussions and determine whether trust can be created with and amongst the self-governed.

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