sou · GQB3112 · 2003-01-01 00:00:00 — Established seg- ments of society are using law in order to uphold norms and in- stitutions. is nothing but spontaneous norms that at a certain point in time have been given a special status and protection of the legal machinery.4 After the initial – gift-oriented, egoistic, al- truistic, dedicated – phase of the new society based on the new core technology, the law of increasing returns predominates. If we apply this reasoning to society as a whole and the role of law in relation to its development, the following conclusions become valid. As long as the law of increasing returns is operat- ing, activities in society regulate themselves. We can hear talk of self-regulation. When the law of diminishing returns takes over, the role of law increases. The transformation from self-regulation into a fully-fledged legal system goes step by step. The first stage is that of rules of the game, where law only provides certain basic norms for the co-ordination of activities. The activity as such is then still unaffected. The legal system sets up limits for socially acceptable behaviour within penal law and provides instruments for co-operation in terms of law of contract and of property, etc within civil law. The next step corresponds to the initial part of the fourth phase in the figure above. When the political system comes into the arena, then law becomes a political instrument. This takes, firstly, the form of public law, primarily in order to These aspects are elaborated in , Normvetenskap (Norm- science), studies in Sociology of nr 11, 2002, chapter 4. entitle public authorities with competence to act on behalf of the politicians when providing the public services which are asked for at this time in history. Later on, in the dying phase of the old (industrial) society, the state has to intervene in order to hold so- ciety together. , then, changes character and becomes an in- tervening tool where public authorities are engaged in controlling more and more private activities. In this last phase the legal sys- tem tends to be overloaded and to have lost its soul manifested in what is called frame-laws. Changing perspective from the upper curve of industrial so- ciety down to the lower curve of information society means, ac- cording to what has been said and what can be learned from simi- lar transitional periods earlier in history, going from state regula- tion to self-regulation. This is due to certain common patterns of the transition. These situations are characterised by a shift of focus from large scale to small scale. It is a question of looking for new ways of fulfilling old human needs using the new technology. Another transition is from planned to random processes in soci- ety. We are leaving a time of planned production and random consumption in favour of a time of random production and planned consumption.5 Wealth in future will depend on sufficient diversity of visions and strategies being mobilised, i.e. more risk- taking and trial-and-error operations. In this transition, society changes social and economic codes, norms and taboos are altered and some legal rules become obsolete. The formal structure of a code appears at the moment when production declines and/or the appearance of meaning fades. In the perspective of the industrial society, we are faced with a situation where corporate loyalty will probably cease to exist and the old (social) contract between company and employee will disappear. We will later on imagine a new social contract. These are examples of factors which con- tribute to the understanding of the normative changes in society of our time. When it comes to law, these changes follow a certain pat- tern, going from pure self-regulation to self-regulation with legal support, to legal regulation and state intervention. The interesting thing, though, is that during its flow in time the legal system is confronted with the same kind of issues when entering the differ- ent societal eras. There is, in that sense, nothing new under the sun. The famous sociologist of law, later the early 20th century Austrian prime minister , has shown, in his book , Marknaden (The Market 1,000 Years). Private property and its social functions, that the concept of property has been the same over the last two thousand years, but the substratum has undergone radical changes. The legal content has been unchanged, despite the changing socio-economic impli- cations. Thus, during the time of Roman slavery, private property meant a relation between a subject and a subject, while also ac- cepting a relation between a subject and an object, which became the typical character of the concept. Later on, during the period of large-scale industrialism and the wage-earning system of capi- talism, private property once again became a relation between a subject and another subject. Finally, in our time of state interven- tionism, private property was accepted as limited by state regula- tions of different kinds. These changes in practical implications were possible due mainly to the fact that the property concept over time has been connected to various other legal concepts, the law of contract, of security rights, public law, etc. in different combinations. What are the consequences for the forecasting of law of the information age? I think there is reason to talk of a particular IT law. But following the reasoning above, one should not expect a lot of new legal constructions and concepts. Established legal principles will do, but they might be combined and put into new contexts, which will affect their socio-economic substratum. There will also be a renewal of old concepts that might have been obsolete. For example, there is reason to expect that the old regu- lation about the trustee (syssloman) will take on a new lease of life. Furthermore, legal regulations that have grown into special expert fields, like labour law, can be supposed to fade out and merge with the main regulatory categories within civil law, when going from the upper, industrial society, to the lower curve of the information society. Only a few new legal concepts, like self- employed, might be needed. Most of the institutionalisation of the new information society will initially take place outside the classical legal arenas and find its way via self-regulation. The most important part of this transitional period is related to the need for de-regulation in order to set the new normative struc- tures free. This is shown by the fact that legal development fol- lows the curves indicated in the figure above. The present situa- tion, the relation between the industrial and the information soci- ety, is no exception. in the digital world is confronted with the same kind of eternal questions as mankind has always had to find an answer to.6 This is the other side of the coin. While the tail is changing, the head faces the same kind of problems over time. The Swedish word for railway engine, lokomotiv, is a case in point. It comes from the Latin word locus, meaning place, and motivus, meaning movement. The word lokomotiv, then, contains both something static, a certain place, and something dynamic, movement. It is spatial and temporal at one and the same time. Since develop- ment in the world is found to be in different eras, a spatial move is also a temporal one. The same goes for the course of law, which is spatial and temporal simultaneously. It changes its con- tent while moving from one societal phase to another. But it is the same legal principles that are being applied to new material conditions, in our time, to new virtual realities. In that sense we are from a legal point of view looking at something new but through old spectacles. For more about these aspects, see , Normvetenskap (Norm-science), studies in Sociology of nr 11, 2002, chapter 6. Why the Use of ICT Engenders Legal Prob- lems – in Search of a Common Denominator ...The purpose of a deeper perspective is above all to provide opportunities for more initiated discussions and more soundly based proposed solutions. In many fields, therefore, this can be just as much a question of looking up and per- ceiving the connection between different activi- ties and different types of legal solution. This is something which can require far greater ana- lytical inputs, because the material will be more extensive, but it is at the same time a method which can lead to far more uniform and appro- priate solutions. 1 In search of a common denominator The emergence of the information society confronts legislators, judicial practice, businesses and individuals with regulatory chal- lenges of apparently unprecedented extent and complexity. At the centre of it all we have the Information and (), not only as the motive force of development and of the possibilities which the information society affords, but also as a factor generating legal problems which have to be dealt with. Most traditional areas of the law are affected, often by common and at the same time overarching problems disturbing not only specific legal issues, but also basic structures of the le- gal system as such. Although legal aspects of the use of ICT have been ad- dressed and dealt with by academics in the Nordic countries since the late 1960s, it is only since the 1990s that ICT-related legal problems have gained more general attention through all is a member of the IT . tion in 1. , Rättsfrågor kring tjänster i nät. In:: Nordisk i , ed., , Juridik, 1996, pp. 49-58, 53-54. (Freely translated) levels of society. The basic reason is that the technology and its use are achieving a higher grade of penetration and are thus bringing the problems out from the rooms of academics to the practical spheres of everyday life. The basic driving force is, of course, the continuing development of the Internet and the World as open and standardised platforms enabling small companies, the public sector and households eventually to make broad use of ICT as a tool for communication and the carrying out of different types of transactions. In the present account, the term transaction is used in the broad sense, so as also to include unilateral acts and activities, such as criminal acts and situations where somebody uses a freely accessible database in order to transmit or collect infor- mation, without necessarily entering into a contractual relation- ship with the provider of the database. However, even though there is a vast amount of literature, re- ports, public investigations, etc. concerning ICT-related legal problems, these are generally devoted to specific legal problems or areas of the law. Overarching studies exist, of course, but strikingly attention seems to have been devoted to under- standing the basic question in this context, namely why the use of ICT, in itself, engenders legal problems.2 In effect, in such cases as described, the problems in ques- tion are often sought to be solved without a deeper understanding of what it is that actually generates the very problems to be solved. The purpose of this article is to draw attention to, and shed some light on, the question of why the use of ICT engenders le- gal problems. The article demonstrates the possibility of pointing to common factors – denominators – making it more difficult for individuals, businesses, legislators and judicial practice to under- stand and deal with the transaction and its environment. This is not just an academic question. The possibility of pointing to one or more common denominators to the ICT-related legal problems arising, not only provides opportunities for better understanding the nature of the problems, but also creates oppor- A good exemption, well worth studying, is , Which (text of a presentation given at the EC Information for senior executives of IEPRC, ICRT and EPC , 31st January 1996), /People/ Herbert.Burkert /Brussels.html (as of 16th 1998 at 10:47 am). Perspectives on a New Legal Discipline. : Liber 1977. tunities of problem solving in a wider perspective, in which the solution in one area can also furnish guidance for solutions in others. This in itself provides for better results in legislative and ju- dicial activities and, furthermore, for businesses and individuals to protect and vindicate their rights in different situations. Busi- nesses which devote resources to gaining a deeper understanding of the regulatory framework governing their business activities, will find themselves in a better position not only to handle regu- latory issues in a cost-preventing and value-adding , but often also in gaining competitive advantages by feeding this knowledge into business strategy, product development and the handling of public/regulatory affairs. 2 The cause and effects 2.1 The transforming character of ICT Most of the legal problems arising in the context of ICT do not concern new, unregulated, legal phenomena. On the contrary, in most cases they concern traditional transactions, where the use of ICT to perform the transaction renders current law incapable of serving its intended purpose. To understand why the use of ICT has this effect, one must firstly understand the changes ICT brings about as a tool for performing different types of transac- tions. Basically, ICT provides new ways of performing transac- tions and at the same time is transforming the environment in which transactions take place. Compared with more traditional ways of performing transactions, the use of ICT has the effect of dissolving the contours of a transaction and blurring the differ- ence between different types of transaction. In addition, transac- tion time inputs are diminishing and geographical distance is ceasing to matter. Ordering goods and services, carrying out banking transactions, making and other ticket reservations, collecting and passing on information – all these things, and much else besides, can be done through one and the same me- dium, from one and the same position, without the parties in- volved needing to move from A to B or meet face to face. Another way of describing this is by saying that ICT is trans- forming the characteristics of the transaction, and entities such as time, frame and space, as determinants of the perception and per- formance of different types of transaction.3 2.2 Effects on insight, understanding and perception – conse- quences for individuals, businesses, legislators, and judicial practice The above-mentioned changes make transactions more difficult to trace, identify and distinguish, in relation to more traditional ways of performing transactions of different kinds – the transaction, its features and consequences, becomes more difficult to grasp. The consequences for individuals and businesses are manifested through less knowledge of the transac- tion as such and of its various elements. These effects are accen- tuated by the problems of knowledge and understanding already entailed by the technology underlying the transaction. In more concrete terms, the use of ICT can make it more dif- ficult to distinguish between different types of transaction whose performance, previously, demanded measures that were more dis- tinct and distinguishable. That which, in reality, would seem a manifest impropriety to the individual, becomes to distin- guish in an electronic environment. The connection between act and consequence becomes less clear and the borderline of the im- permissible therefore becomes easier to transgress, both deliber- ately and inadvertently. For example, appropriating other peoples banking assets through the Internet by cracking their PIN codes can be expected to provide a lower moral threshold to cross, than the physical act of breaking into and robbing a bank. Furthermore, it is probably impossible for the uninitiated web surfer to perceive the borderline between proper and improper use of copyright material available through the Internet. Perhaps he or she does not even realise that an act entails the copying of copy- right material, comparable to the manifest act of copying a book from end to end and producing a certain number of copies for fur- ther distribution, with the help of a copying . ICT has also made it more difficult to tell what is required in order for an act to be completed, and thus legally binding. This can apply both to commercial transactions, for example when entering into a contractual relationship, and to the relationship between pub- , ibid.. Burkert describes these aspects in the way that ICT invites – by its basic characteristics – uses that seek to overcome the limitations of time, complexity, quantity, space and physical represen- tation, and that it does so in a that makes the process appear to the user as intangible, invisible and variable. lic authorities and private individuals, for example concerning the date when a document is deemed to have been received. Even though legal rules, case law and custom may point out or indicate certain elements as determinant in these respects, it may be unclear to the parties concerned when these elements occur in an electronic environment and, moreover, how evidence of their occurrence can be secured and presented. Another consequence is that it becomes more difficult to identify the other party and to decide in what capacity and with what authority he or she is acting – for example, whether the oppo- site number is the person he or she professes to be, is acting in a consumer capacity, has due authorisation (e.g. power of attorney), is over a certain age, and so on. Furthermore, in connection with traditionally performed transactions, the individual can normally be expected to be in rea- sonably good control of the information which he or she provides, whether directly or indirectly, and reasonably able to decide who receives that information and in what way. The opposite applies to electronic transactions, the individual often being entirely unaware of the electronic track which he or she leaves behind him and, consequently, of the person or persons to whom these tracks be- come accessible. To this are added the above-mentioned changes of time, frame and space as determinants of the performance and perception of the transaction. Everything happens faster, the for reflec- tion and consideration are diminishing. Geographical distances are losing their practical relevance, and it is becoming less and less easy to ascertain the location from which a party trades or on his business, or the geographical source of information. With a growing risk of rights being lost, this leaves the user with less in- sight and understanding of the transaction, its elements and its con- sequences. The problems which the use of ICT creates for legislators and judicial practice are to a great extent matched by the prob- lems described above in relation to individuals and businesses, but of course in terms of the perspectives and tasks of these insti- tutions; the transaction and its parties are growing more difficult to trace, identify, define, classify and characterise, which poses problems both in the development of new legal rules and in the modification and implementation of existing law. Allowance also has to be made for the fact that, since the design of the regulatory structure and its implementation are to a great extent based on the possibilities of the individual under- standing the transaction, its elements and its consequences, the legislator and judicial practice must also relate to the problems which the use of ICT presents to the user. In addition, the legislator and judicial practice must also relate to the insensitivity of technology to political boundaries, the very boundaries which impose restrictions on their competence and pos- sibilities of action. 2.3 Effects on regulation – the framing and purpose of a legal rule To fully understand why legal problems arise from the use of ICT, the consequences for individuals, businesses, legislators and judi- cial practice must be seen in the light of the design and purpose of the regulation in question. Here, on closer analysis, one finds that the purposes to be served, the interest or interests to be protected or reconciled, are very often represented by criteria or concepts that are hard hit by the transforming character of ICT, i.e. criteria and concepts based on the possibilities of the parties or the user to understand and foresee the transaction, its scope and consequences, as well as its positioning in time and space, and so on. Consequently, the crite- ria laid down for a legal rule to take effect, often loose their rele- vance for the accomplishment of that rule's purpose and the bal- ance sought between the different interests involved. In the light of the above discussion, we find that the use of ICT impacts above all on legal criteria and concepts based on knowledge and perception of: NWho (which person or persons) are involved in the transac- tion or commit a criminal act, and in what capacity that per- son or persons act. NWhat constitutes the object of the transaction/protection and how this is to be classified, defined and delimited, e.g. in re- lation to various types of exclusive rights and to data collec- tions of importance for personal privacy. NWhere the transaction/criminal act takes place, where the ef- fect occurs, where the party/culprit acts from, where the in- formation originates and is supplied from, where a party can be deemed to be established, and so on. NWhen an activity has legal consequences: when a legal commitment occurs, when a document is to be deemed to have been received, and so on. NHow the transaction and its various stages are performed, how evidence is presented and evaluated in these respects. The blurring effect on different types of transactions is a fun- damental element in most of the ICT related legal problems that arise. The actual problems may be related to specific fields of law or to the particular contexts in which they appear. In IT 6/98 examples are given which illustrate how legal criteria and concepts, workable in the context of tradi- tional transactions, either fail to serve their purpose or demand a new understanding of the same transactions, when performed with ICT.4 The examples concern freedom of expression and in- formation, copyright, penal law, protection of privacy, the dis- tinction between product and service in sales law and taxa- tion law perspectives, contract law, imaginary/virtual organisa- tions and applicable law and jurisdiction. From a regulatory perspective, maybe the most interesting development over the last couple of years comes from the con- vergence between the IT, telecommunications and media sectors. The convergence phenomenon serves as a good example of the fact that the use of ICT brings about common and at the same time overarching problems disturbing not only specific legal is- sues, but also basic structures in the legal system as such. 3.1 The convergence between the IT, telecommunications and media sectors Convergence as a phenomenon can be described in various ways, depending on the perspective that is being discussed, and with varying degrees of complexity. The conditions which, in the con- text of technical progress, are leading to the convergence of in- frastructures, services and apparatus, are fundamental. To this are added the market movements whereby actors in different sectors are involving themselves with one or more neighbouring sectors. The legal consequences of convergence are revealed by the in- creasing difficulty of distinguishing between the IT, telecommuni- cations and media sectors, which used to be relatively clearly seg- regated. One and the same service can, for example, come under different, possibly several, regulatory instruments, depending on , The anonymisation of the transaction and its im- pact on legal problems, IT 6/98, ICT : ICT Commission 1998, pp.