IV. internet regulation through architectural modification: The property rule structure of code solutions

Harvard Law Review

Volumn 112, Issue 7, 1999, Pages 1634-1657

[No Author Info available]

Author keywords

[No Author keywords available]

Indexed keywords

EID: 37849189027     PISSN: 0017811X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (138)

1. The term was invented by William Gibson. See WILLIAM GIBSOX, NEUROMANCER 4 (1984).
2. I use the term "code" generally to refer to the instructions executed by computers. Code may be represented in various forms, including holes in a punch-card, wiring on a chip, or a sequence of ones and zeros.
3. Architecture may be loosely understood as the overarching limits or boundaries of a space - the blueprint of what is possible. See Lawrence Lessig, The New Chicago School, 27 J. LEGAL STUD. 661, 663 (1998) [hereinafter Lessig, Chicago] ("I mean by 'architecture' the world as I find it, understanding that as I find it, much of this world has been made.").
4. See generally I. Trotter Hardy, The Proper Legal Regime for "Cyberspace", 55 U. PITT. L. REV. 993, 994-95 (1994) (assessing the extent to which Cyberspace raises legal problems different from those of real-space).
5. But see Frank H. Easterbrook, Cyberspace and the Law of the Horse, 1996 U. CHI. LEGAL F. 207, 207-08 (arguing that there is no more a "law of Cyberspace" than there is a "law of the horse" and that real-space legal principles can be applied to Cyberspace).
6. See Reno v. ACLU, 521 U.S. 844, 890 (1997) (O'Connor, J., concurring) ("Cyberspace is malleable. Thus, it is possible to construct barriers in Cyberspace...."); Lawrence Lessig, Reading the Constitution in Cyberspace, 45 EMORY L.J. 869, 897 (1996) ("With respect to the architecture of Cyberspace, and the worlds it allows, we are God.").
7. For a discussion of the evolution of Cyberspace, see supra pp. 1578-79.
8. Obviously, this is not an exhaustive list, but these particular concerns will be addressed below in sections B-D.
9. See Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089, 1089-1115 (1972) (describing the rules that may be used to allocate and enforce the state's entitlement determination).
10. Calabresi and Melamed describe property rules as follows: An entitlement is protected by a property rule to the extent that someone who wishes to remove the entitlement from its holder must buy it from him in a voluntary transaction in which the value of the entitlement is agreed upon by the seller. It is the form of entitlement which gives rise to the least amount of state intervention: once the original entitlement is decided upon, the state does not try to decide its value. It lets each of the parties say how much the entitlement is worth to him, and gives the seller a veto if the buyer does not offer enough. Id. at 1092 (citation omitted).
11. The penalty may be in the form of a fine or a court judgment. Calabresi and Melamed describe liability rules as follows: Whenever someone may destroy the initial entitlement if he is willing to pay an objectively determined value for it, an entitlement is protected by a liability rule.... [L]iability rules involve an additional stage of state intervention: not only are entitlements protected, but their transfer or destruction is allowed on the basis of a value determined by some organ of the state rather than by the parties themselves. Id.
12. See id. at 1127.
13. A program that automatically tracked and reported online crimes such as fraud or child pornography would be an example of a code solution tailored to a liability regime. Legal authorities would use this information to impose the state-mandated cost for such activities, including injunctions, fines, or imprisonment.
14. I. Trotter Hardy has advanced three general explanations for this: reductions in the costs of communication, reductions in the costs of recording data, and the facilitation of institutional innovations. See Trotter Hardy, Property (and Copyright) in Cyberspace, 1996 U. Cm. LEGAL F. 217, 219-237 ("[A] principal characteristic of property rules -that we rely on them in situations of low transaction costs - applies to Cyberspace, because Cyberspace lowers the cost of communicating and, hence, of transacting over rights to use private property."). Code innovations may further reduce the costs of transacting in Cyberspace. See, e.g., infra pp. 1646-48 (discussion of Platform for Privacy Preferences (P3P)).
15. A regime that reflects individual preferences is favored because it may lead to the socially optimal regime. Assuming that individuals make decisions to maximize their welfare and that they behave rationally in the aggregate, a regime that reflects the aggregate of individual preferences is likely to maximize social welfare.
16. In arguing that code solutions facilitate the institution of a property rule regime in Cyberspace, this Part builds upon the work of Trotter Hardy, which applied the property rule paradigm to copyright in Cyberspace. See Hardy, supra note 13.
17. See Brief for Appellant, Reno v. ACLU, 521 U.S. 844 (1997) (No. 96-511), available in 1997 WL 32931, at *4a-*36a (describing the vast number of pornographic websites on the Internet and the ease with which they can be found). A recent search, conducted by entering "+porn +xxx +sex" into the AltaVista search engine, retrieved 2,298,215 results.
18. The "reasonable attempt" made by most porn site operators to ensure that their visitors are not minors is to warn visitors that the material provided is intended for adults only and should not be accessed by children. See, e.g., Smutland (visited Apr. 19, 1999) 〈http://www.smutland. com (on file with the Harvard Law School Library) (providing the warning: "[t]his site contains XXX-RATED sexually explicit adult material intended for individuals 18 years of age or older. IF YOU ARE UNDER 18 CLICK ON YOUR BROWSER'S BACK BUTTON"). However, because a single click of the mouse is often all that is required to certify one's age and there are no immediate consequences for falsely certifying one's age, few children are likely to be deterred by this warning.
19. In 1996, the Communications Decency Act (CDA) was drafted to address the problem by prohibiting the knowing transmission or display of obscene or indecent material to anyone under eighteen years of age. See Communications Decency Act of 1996, Pub. L. No. 104-104, tit. V, 110 Stat. 56, 133-35 (1996). One year later, the Supreme Court struck down the law as unconstitutional because the statute limited the First Amendment rights of adults to access pornographic sites. See Reno v. ACLU, 521 U.S. 844, 874 (1997) (holding that the Act "suppresses a large amount of speech that adults have a constitutional right to receive and to address to one another"). In 1998, the Children's Online Protection Act was passed with the hope that it would succeed where the CDA failed. See Child Online Protection Act (COPA), Pub. L. No. 105-277, § 231, 112 Stat 2681-2736 (1999) (to be codified at 47 U.S.C. § 201) (punishing "[w]hoever knowingly and with knowledge of the character of the material, in interstate or foreign commerce by means of the World Wide Web, makes any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors"). However, COPA has been enjoined and is currently facing constitutional challenge. See ACLU v. Reno, No. Civ.A. 98-5591, 1999 WL 44852, at *2 (E.D. Pa. Feb. 1, 1999) (granting a preliminary injunction at the ACLU's behest to prevent enforcement until constitutional challenges have been heard); see also supra Part II, at notes 96-97 and accompanying text
20. Of course, one of the most important features of the Internet is that it is transjurisdictional. See infra Part VI.A; infra p. 1689 n.49 (discussing China and Singapore).
21. See Osborne v. Ohio, 495 U.S. 103, in (1990) (holding that a state's interest in preventing the production and distribution of child pornography permits proscription of the possession and viewing of such material); New York v. Ferber, 458 U.S. 747, 764 (1982) ("[C]hild pornography... like obscenity, is unprotected by the First Amendment").
22. The distinction between indecency and obscenity is murky. In Miller v. California, 413 U.S. 15 (1973), the Supreme Court established a three-prong test for obscene material: (a) whether the average person, applying contemporary community standards would find that the work, taken as a whole, appeals to the prurient interest; (b) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and (c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.
23. Id. at 24 (citations omitted) (internal quotation marks omitted). Moreover, only those in possession of "hard core" pornography may be subject to prosecution under obscenity laws based on the standards of their community. See id. at 27.
24. See Sable Communications, Inc. v. FCC, 492 U.S. 115, 126 (1989) ("Sexual expression which is indecent but not obscene is protected by the First Amendment....").
25. See Roth v. United States, 354 U.S. 476, 485 (1957) (holding that obscene speech is not protected by the First Amendment).
26. 390 U.S. 628 (1968).
27. Id. at 633.
28. In holding that the state may constitutionally restrict children's access to pornography, the Court did not rule that the First Amendment applies differently to children than it does to adults, but rather that the definition of obscenity applies differently to children than it does to adults. Thus, a state may "adjust[] the definition of obscenity to social realities by permitting the appeal of this type of material to be assessed in terms of the sexual interest... of such minors." Id. at 638 (internal quotation marks omitted).
29. See Sable, 492 U.S. at 126 (1989) ("The Government may... regulate the content of constitutionally protected speech in order to promote a compelling interest if it chooses the least restrictive means to further the articulated interest.... It is not enough to show that the Government's ends are compelling; the means must be carefully tailored to achieve those ends." (citations omitted) (internal quotations omitted)). But see Eugene Volokh, Freedom of Speech, Shielding Children, and Transcending Balancing, 1997 SUP. CT. REV. 141, 193 (arguing that, contrary to the Court's current balancing approach, substantial burdens on speech are unconstitutional even if they are necessary to protect children).
30. See Ginsberg, 390 U.S. at 645 (accepting a statutory provision excusing a defendant's honest mistake in selling pornography to minors provided that he made "a reasonable bona fide attempt to ascertain the true age of such minor" (internal quotation marks omitted)).
31. Because these services must collect personally identifying information in order to verify age, privacy concerns may arise. See infra section D.
32. See generally A. Michael Froomkin, The Essential Role of Trusted Third Parities in Electronic Commerce, 75 OR. L. REV. 49, 49 (1996) (describing certificate authorities and their role in electronic commerce);
33. Lawrence Lessig, What Things Regulate Speech: CDA 2.0 vs. Filtering, 38 JURIMETRICS J. 629, 649-51 (1998) [hereinafter Lessig, Speech] (advocating the use of certificate age-verification systems as a less restrictive alternative to the CDA); Information Sec. Comm., Section of Science and Tech., American Bar Ass'n, Digital Signature Guidelines: Legal Infrastructure for Certification Authorities and Secure Electronic Commerce, 1996 (visited Apr. 19, 1999) 〈http://www.abanet.org/scitech/ec/isc/dsgfree.html (on file with the Harvard Law School Library) (describing digital certificates and their uses).
34. See, e.g., The Adult Check System (visited Apr. 19, 1999) 〈http://www.adultcheck.com (on file with the Harvard Law School Library) (stating goals of "regulatfjng] ourselves and the Net, helping to prevent minors from accessing adult oriented material, yet allowing Adults to communicate freely").
35. See Lawrence Lessig and Paul Resnick, The Architectures of Mandated Access Controls 1112 (Jan. 12, 1999) (unpublished manuscript, on file with the Harvard Law Review) (suggesting that the target of enforcement should be the party - either sender, receiver, or intermediary -who can be most easily or cheaply reached).
36. Ginsberg, 390 U.S. at 645. The transjurisdictional nature of the Internet raises questions regarding the effectiveness of this solution. Site operators and network administrators in Holland, for example, would not be subject to an American law requiring age verification. In response to such a system, indecent content providers are likely to migrate to less restrictive jurisdictions.
37. 3P, the code solution to the privacy problem discussed in section C, see infra pp. 1645-49, is a kind of filter that screens websites in order to warn users about the site owner's privacy practices.
38. See, e.g., The Cyber Patrol Fact Sheet (visited Apr. 19, 1999) 〈http://www.cyberpatrol.com/ fact.html (on file with the Harvard Law School Library) [hereinafter Fact Sheet] (describing the uses of Cyber Patrol filtering software).
39. See, e.g., AV Family Filter FAQ (visited Apr. 19, 1999) 〈http://jump.altavista.com/cgi-bin/FF #FAQ (on file with the Harvard Law School Library) (providing answers to frequently asked questions about the AltaVista filter).
40. See, e.g., AOL.Com Parental Controls (visited Apr. 19, 1999) 〈http://www.aol.com/info/par entcontrol.html (on file with the Harvard Law School Library) (explaining the filtering options available to America Online members).
41. Proxy filters are servers through which all of a user's information exchanges are routed, which make content control decisions for the end-user. See, e.g., Family Safe Media, Proxy Based Server-Side Filtering (visited Apr. 19, 1999) 〈http://www.familysafemedia.com/proxy_filter.html (on file with the Harvard Law School Library) (describing the benefits of their proxy filter system);
42. Wayne B. Salamonsen & Roland Yeo, PICS-Aware Proxy System vs. Proxy Server Filters (visited Apr. 19, 1999) 〈http://www.irdu.nus.sg/-wayne/paper.html (on file with the Harvard Law School Library) (noting the differences between PICS proxy systems and proxy server filters).
43. State-mandated filtering is likely to fail strict constitutional scrutiny because current filtering technology blocks more categories of constitutionally protected speech than other means, such as age verification systems. The problems of state action and strict scrutiny have recently been raised in the context of public libraries. According to an American Library Association survey, 14.6 percent of public libraries apply filters to at least some of their Internet-enabled computers. See American Library Ass'n, Office for Info. Tech. Policy, The 1998 National Survey of U.S. Public Library Outlet Internet Connectivity (visited Apr. 19, 1999) 〈http://www.ala.org/oitp/re search/survey98.html (on file with the Harvard Law School Library). The emerging rule appears to require libraries with more than one Internet-enabled computer to separate children's computers from adults' computers and to install filters only on the children's computers. See Mainstream Loudoun v. Board of Trustees, 24 F. Supp. 2d 552, 570 (E.D. Va. 1998) (holding that the application of filtering technology to all computers in a public library violates the First Amendment); infra pp. 1642-43.
44. In the absence of state action, there is no constitutional issue. The public forum doctrine may be used to construct state action, especially in cases of high-level private filtering. To date, however, courts have been unwilling to accept this argument. See, e.g., CompuServe, Inc. v. Cyber Promotions, Inc., 962 F. Supp. 1015, 1028 (S.D. Ohio 1997) (permitting online service provider to filter mass e-mail sent to its subscribers); Cyber Promotions, Inc. v. American Online, Inc., 948 F. Supp. 436, 456 (E.D. Pa. 1996) (same). But each of these cases involved commercial solicitations rather than political speech. Courts might treat the public forum argument more favorably in the context of political speech. See supra Part III.C.
45. Of course, children may still be able to access pornography by going elsewhere - for example, to a neighbor's computer -but this is no different from the current regime, in which enterprising youngsters can obtain adult magazines elsewhere even if their parents are careful not to keep them at home.
46. For example, the Cyber Patrol "CyberNOT" List enables parents to choose to block content from a variety of categories, including: "Partial Nudity; Nudity; Sexual Acts/Text; Gross Depictions; Intolerance; Satanic or Cult; Drugs and Drug Culture; Militant/Extremist; Violence/Profanity; Questionable/Illegal & Gambling; Sex Education; and Alcohol & Tobacco." Fact Sheet, supra note 35. PICS, on the other hand, has the potential to offer as many blocking alternatives as there are web-users, because it allows filtering labels and lists to be generated by independent Internet users. See Platform, supra note 34.
47. Pornography protection would thus operate as an "opt-in" regime, under which pornography would be unfiltered unless the user opted for filtering. The alternative "opt-out" regime, under which pornography would be filtered unless the filter were deactivated, is also possible but may be unconstitutional if state action is needed to mandate the filtering of all material. See supra pp. 1640-41.
48. Because of the recurring difficulty in enforcing the Ginsberg entitlement online, the default rule has essentially been no protection for end-users from pornography.
49. Errors in filtering software may result either from the machines that automatically screen material or from the humans who set the standards for judging the material. See Jonathan Weinberg, Rating the Net, 19 HASTINGS COMM. & ENT. L.J. 433, 459-470 (1997); see also Lessig, Speech, supra note 30, at 654 ("[T]he blocking effected by these systems is crude, and the effect of the blocking created is far too broad").
50. See Weinberg, supra note 45, at 460-62 (noting that pages of news organizations, support groups, political groups, and constitutional issues are often blocked by software filters); Electronic Privacy Information Center (EPIC), Faulty Filters: How Content Filters Block Access to Kid-Friendly Information on the Internet (visited Apr. 19, 1999) 〈http://www2.epic.org/reports/filter-report.html (on file with the Harvard Law School Library) (describing the results of a study that concluded that "the world's first family-friendly Internet search site" in fact "prevented children from obtaining a great deal of useful and appropriate information that is currently available on the Internet");
51. Jonathan Wallace, CyberPatrol: The Friendly Censor (visited Apr. 19, 1999) 〈http:// censorware.org/essays/cypa_jw.html (on file with the Harvard Law School Library) (describing socially beneficial speech that is blocked by CyberPatrol).
52. This threat will be most pronounced in a regime of high-level filtering. See infra p. 1643.
53. See Weinberg, supra note 45, at 460 ("These problems... may be addressed through proper software design.").
54. Subjectivity and ambiguity may prevent even site creators from accurately evaluating their own sites. See Jonathan Wallace, Why I Will Not Rate My Site (visited Apr. 19, 1999) 〈http:// www.spectacle.org/cda/rate.html (on file with the Harvard Law School Library) (describing an author's crisis of conscience in rating material that may be considered indecent but that also has scientific, literary, artistic, or political value and cautioning against rating systems which "lump [such material] together with the Hot Nude Women page").
55. For example, employers may apply filters to bar employees from accessing non-work-related sites. See, e.g., Rosilind Retkwa, Corporate Censors, INTERNET WORLD, Sept. 1996, at 60 (describing the employer concerns about employee Internet use at work). Private universities may use filters to make their computers "politically correct." See, e.g., 〈http://www.eff.org/pub/Censor
56. ship/Academic_edu/cmu_usenet_censorship.docs(visited Apr. 19, 1999) (on file with the Harvard Law School Library) (recounting the controversy surrounding Carnegie Mellon University's decision to eliminate certain Usenet domains from the university computer network). Oppressive regimes may employ filters to restrict the online political activities of their citizens. See, e.g., Silencing the Net, The Threat to Freedom of Expression Online, 8 HUM. RTS. WATCH 2, (May 1996) http://www.epic.org/free_speech/intl/hrw_report_5_96.html (on file with the Harvard Law School Library) (describing Internet censorship in China); Singapore Internet Regulation - Censorship or Cultural Concern (visited Apr. 19, 1999) http://www.fl.asn.au/singapore/refs.html (on file with the Harvard Law School Library) (providing links to information regarding Singapore's control of Internet content).
57. See Lessig, Speech, supra note 30, at 661 ([PICS] does not inhibit upstream filtering; nor does it require that upstream filtering be reported; nor does it have built within it any narrowing of the range of content that can be filtered . . . .).
58. See, e.g., Cyber Patrol Partners (visited Apr. 19, 1999) http://www.cyberpatrol.com/partners.htm (on file with the Harvard Law School Library) (listing the companies that use Cyber Patrol technology in their products, including America Online, AT"amp;T, IBM, Microsoft, Netscape, and Prodigy); see also supra notes 33-38 (discussing the levels at which filters may be applied).
59. Those who are not technologically adept may not be able to disable the filter even after they are notified that it is active.
60. This model assumes that there is a sufficient market for unfiltered Internet access such that at least some service providers will hold themselves out as wholly unfiltered in order to capture that market. However, because market decisions require a sufficient level of information, invisible filters may produce a market failure whereupon individuals are unable to choose in accordance with their individual preferences.
61. Some users - guided by the mistaken belief that because one is unseen, one is unknown - may overestimate the level of privacy and anonymity in Cyberspace. See, e.g., Reno v. ACLU, 521 U.S. 844, 889-890 (1997) (O'Connor, J., concurring) (Because it is no more than the interconnection of electronic pathways, Cyberspace allows speakers and listeners to mask their identities.).
62. Every time a user connects to the Internet, she is assigned a unique Internet Protocol (IP) address. Similar to addresses in real-space, the user's IP address is the means by which information is sent to her computer. Each site that a user visits obtains her IP address. These addresses may then be exploited to yield a profile of the user. See We Can Snoop You (visited Apr. 19, 1999) http://www.anonymizer.com/snoop.cgi (on file with the Harvard Law School Library); see also Michael Adler, Note, Cyberspace, General Searches, and Digital Contraband: The Fourth Amendment and the Net-Wide Search, 105 YALE L.J. 1093, 1093 (1996) (describing a hypothetical net-wide search by law enforcement).
63. Cookies are small files sent directly to the user's computer by the sites she visits. These files contain whatever information the site operator would like to access during a user's subsequent visits, such as ordering information or pages visited. The files are stored on the user's hard drive and are usually readable only by the site that sent them. See generally Cookie Central (visited Apr. 19, 1999) http://www.cookiecentral.com (on file with the Harvard Law School Library) (providing general information about cookie files and how to block them); U.S. Dep't of Energy, Computer Incident Advisory Capability, Information Bulletin, I-034: Internet Cookies (last modified March 12, 1998) http://www.ciac.org/ciac/bulletins/i-034.shtml (on file with the Harvard Law School Library) (describing the privacy and security threats posed by cookies as essentially nonexistent).
64. Cookies may contribute to the aggregation of personal information because sites may share cookies in order to generate a fairly accurate matrix of a user's identity and preferences, which can then be used to target Internet advertising. See, e.g., DoubleClick (visited Apr. 19, 1999) http://www.doubleclick.net (on file with the Harvard Law School Library) (providing technology to match advertising to individual users in order to deliver targeted advertising); Preferences.com (visited Apr. 19, 1999) http://www.preferences.com (on file with the Harvard Law School Library) (same).
65. Despite recent policy proposals, site operators have no legal obligation to inform users about their information practices. See Federal Trade Comm'n, Privacy Online: A Report to Congress, June 10.08 (visited Apr. 19, 1999) http://www.ftc.gov/reports/privacy3/index.htm (on file with the Harvard Law School Library) [hereinafter FTC, Report] (recommending that sites provide notice of their privacy practices as a matter of self-regulation); EPIC, Surfer Beware: Personal Privacy and the Internet (visited Apr. 19, 1999) http://www.epic.org/reports/surfer-beware.html (on file with the Harvard Law School Library) (reporting that very few of the top one hundred websites provide any kind of notice regarding the use of collected personal information).
66. See Graphic, Visualization, and Usability Ctr., Tenth World Wide Web User Survey (visited Apr. 19, 1999) http://www.gvu.gatech.edu/user_surveys/survey-1998-10/ (on file with the Har-vard Law School Library) (reporting that the majority of respondents strongly value the anonymous nature of the Internet and feel that users ought to have complete control of their demographic information).
67. See FTC, Report, supra note 58.
68. See generally ARTHUR R. MILLER, THE ASSAULT ON PRIVACY: COMPUTERS, DATA BANKS, AND DOSSIERS 39 (1971) (referring to the long-term accumulation of personal data as a "quot;record prison"quot;); William L. Prosser, Privacy, 48 CAL. L. REV. 383, 389 (1960) (describing tort law relating to privacy); Samuel D. Warren "amp; Louis D. Brandeis, The Right to Privacy, 4 HARV. L. REV. 193, 196 (1890) (focusing on invasions of privacy occasioned by the press). But see Richard A. Posner, The Legal Protection of the Face We Present to the World, in OVERCOMING LAW 531, 536 (1995) [hereinafter Posner, Face] ("quot;Privacy is a private good of great value, but sometimes a social bad."quot;); Richard A. Posner, Privacy as Secrecy, in THE ECONOMICS OF JUSTICE 231, 231 (1981) [hereinafter Posner, Secrecy] (noting that privacy protection may entail social costs because it enables concealment and misrepresentation of information).
69. The Fourth Amendment protects individuals against searches by government officials that violate reasonable expectations of privacy, see U.S. CONST, amend. IV, and a patchwork of ad hoc federal statutes address particular privacy concerns, see EPIC, Online Guide to 105th Congress: Privacy and Cyber-Liberties Bills (visited Apr. 19, 1999) http://www.epic.org/privacy/bill_track. html (on file with the Harvard Law School Library). However, no federal enactment prevents the collection of personal data online. Although some states have enacted a right to privacy, few appear to support a cause of action for the collection of personal information online. See Joel R. Reidenberg, Privacy in the Information Economy: A Fortress or Frontier for Individual Rights?, 44 FED. COMM. L.J. 195, 221-34 (1992) (summarizing state privacy laws).
70. One commentator suggests that the current regime produces an inefficient allocation of resources: The market failure has occurred because of a poor social choice in the allocation of property rights. Under current law, the ownership right to personal information is given to the collector of that information, and not to the individual to whom the information refers. Individuals have no property rights in their own personal information. As a result, they cannot participate in the flourishing market for personal information, i.e., they receive no compensation for the use of their personal information. As a further consequence, the price of personal information is so low that information-intense industries become inefficient in its use.
71. Kenneth C. Laudon, Extensions to the Theory of Markets and Privacy: Mechanics of Pricing Information, in U.S. DEP'T OF COMMERCE, PRIVACY AND SELF-REGULATION IN THE INFORMATION AGE (1997) (article available at http://www.ntia.doc.gov/reports/privacy/selfreg1.htm#1D) (on file with the Harvard Law School Library).
72. See FTC, Report, supra note 58, at 43 (recommending that Congress develop legislation to require commercial Websites that collect personal identifying information from children 12 and under to provide actual notice to the parent and obtain parental consent); Connie Guglielmo "amp; Will Rodger, Can Net Privacy Coexist with E-Commerce? (visited Apr. 19, 1999) http://www. zdnet.com/zdnn/content/inwo/1216/263765.html (on file with the Harvard Law School Library) (We want legislation; we want encryption; we want anonymity; and we want it now. (quoting EPIC director Marc Rotenberg)).
73. See generally Ian Goldberg, David Wagner "amp; Eric Brewer, Privacy-Enhancing Technologies for the Internet (visited Apr. 19, 1999) http://www.cs.berkeley.edu/~daw/privacy-compcon97-www/privacy-html.html (on file with the Harvard Law School Library) (describing technologies for the protection of online privacy); EPIC, EPIC Online Guide to Privacy Resources (visited Apr. 19, 1999) http://epic.org/privacy/privacy_resources_faq.html (on file with the Harvard Law School Library) (providing links to Internet privacy resources)
74. Although the remainder of the discussion focuses on P3P, the arguments apply to all software protocols that enable contractual solutions to the problem of privacy.
75. See generally Joseph Reagle "amp; Lorrie Faith Cranor, The Platform for Privacy Preferences (visited Apr. 19, 1999) http://www.w3.org/TR/1998/NOTE-P3P-CACM/ (on file with the Harvard Law School Library) (describing P3P in both technical and nontechnical terms and providing links to other documents outlining the history of the project); Joseph M. Reagle, Jr., P3P and Privacy on the Web FAQ (visited Apr. 19, 1999) http://www.w3.org/P3P/P3FAQ.html (on file with the Harvard Law School Library)
76. The proposal states in P3P compliant form the site's privacy practices. The proposal may include additional information, such as the site's membership in a third-party assurance organization that polices and guarantees the veracity of its privacy statements. See Reagle "amp; Cranor, supra note 67. Furthermore, more than one proposal may be sent by the site provider, in which case P3P will analyze each to determine which, if any, are acceptable. Id. For more on assurance agencies, see the discussion of TRUSTe and BBBOnline in note 72 below.
77. P3P thus functions as a type of filter. Instead of filtering sites with indecent material, however, P3P filters sites with unacceptable privacy practices.
78. P3P may be most effective when used in conjunction with anonymizing and cookie-blocking technologies to create a comprehensive privacy solution.
79. For example, a recent AltaVista search for websites offering sports scores retrieved 58,548 results. A search for stock quotes retrieved 146,803 results.
80. Verification authorities may be used to police the terms of these agreements. See, e.g., Better Business Bureau Online (visited Apr. 19, 1999) http://www.bbbonline.com/privacy/index. html (on file with the Harvard Law School Library) (offering an introduction to its verification program); TRUSTe (visited Apr. 19, 1999) http://www.truste.org/about (on file with the Harvard Law School Library) (same). These authorities monitor the congruence of sites' privacy policies with their privacy practices, holding them liable under the terms of their membership agreements for any deviation. Site providers desiring to maximize traffic to their site have an incentive to subscribe to such authorities if enough users mandate the use of verification seals in their privacy preferences under a P3P regime.
81. This conclusion follows from our assumption that the optimal level of protection is the level that most members of society prefer. See supra p. 1636 and note 14.
82. In this market, information collectors will offer incentives - such as prizes, cash, or access to a popular site - for users to part with their personal information.
83. The de facto level represents the protection most commonly offered by site operators as a default This level is chosen in response to the aggregate of user preferences, but P3P preserves the freedom of individuals to choose greater or lesser protection.
84. The simplest model of this market assumes that the primary goal of site operators is to maximize traffic to their sites and that the main interest of Internet users is to access as many sites as possible without compromising their privacy preferences. Accordingly, site operators will collect personal information only to the extent that it does not adversely impact traffic to their sites, and users will not configure their privacy preferences in ways that prevent them from accessing highly desired content.
85. See generally Posner, Face, supra note 61, at 531; Posner, Secrecy, supra note 61, at 231.
86. See David R. Johnson, The Unscrupulous Diner's Dilemma and Anonymity in Cyberspace (visited Apr. 19, 1999) http://www.cli.org/DRJ/unscrup.html (on file with the Harvard Law School Library) ([T]o achieve a civilized form of Cyberspace, we have to limit the use of anonymous communications.); supra Part II.C.
87. See, e.g., Zeran v. America Online, Inc., 129 F.3d 327, 328 (4th Cir. 1997) (upholding summary judgment of Zeran's claim against AOL for defamatory messages posted by an unidentified third party).
88. See CLIFF ALLEN, DEBORAH KANIA "amp; BETH YAECKEL, INTERNET WORLD GUIDE TO ONE-TO-ONE WEB MARKETING 223-99 (1998) (discussing the way in which advertisers build and use Internet user profiles).
89. See Report: Global Online Ad Spending to Hit "dollar;15 Billion by 2003, INTERNETNEWS (Aug. 20, 1998) http://www.internetnews.com/IAR/article/0,1087,12_9971,00.html (on file with the Harvard Law School Library) (citing the results of a 1998 study estimating that U.S. spending for Internet advertisements will increase eight-fold to "dollar;10.5 billion over the next five years).
90. Without the guarantee that their advertisements will reach the target audience, advertisers are likely to pay less for online advertising.
91. 8:5 Note, however, that very little is actually free under the current architecture of the Internet. The price of Internet content must be understood to include the value of the personal information that is collected by site providers and used to generate revenue.
92. John Perry Barlow, Selling Wine Without Bottles: The Economy of Mind on the Global Net (visited Apr. 19, 1999) http://www.eff.org/pub/Publications/John_Perry_Barlow/HTML/idea_ec onomy_article.html (on file with the Harvard Law School Library).
93. See Anne K. Fujita, The Great Internet Panic: How Digitization Is Deforming Copyright Law, 2 J. TECH. L. "amp; POL'Y 1, 1 (Fall 1996) http://journal.law.ufl.edu/-techlaw/2/fujita.htm (on file with the Harvard Law School Library) (The new technology of digitization in our present 'Information Age' has upset the delicate balance created and maintained by copyright law between the rights of authors, users, and the industries that collect the money.).
94. See William M. Landes "amp; Richard A. Posner, An Economic Analysis of Copyright Law, 18 J. LEGAL STUD. 325, 326 (1989) (For copyright law to promote economic efficiency, its principal legal doctrines must, at least approximately, maximize the benefits from creating additional works minus both the losses from limiting access and the costs of administering copyright protection . . . .).
95. See U.S. CONST, art I, "sect; 8, cl. 8 (The Congress shall have Power . . . [t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.).
96. Exclusive rights under copyright are essentially limited to the right to prevent the production and distribution of copies. See 17 U.S.C. "sect; 106 (1994) (listing the exclusive rights in copyrighted works as reproduction, preparation of derivative works, distribution, and public performance and display).
97. See U.S. CONST., art. I, "sect; 8, cl. 8; see also Copyrights - Term Extension and Music Licensing Exemption, Pub. L. No. 105-298, "sect; 102, 112 Stat. 2827 (1998) (to be codified at 17 U.S.C. "sect; 302) (setting the current duration of a copyright at the life of the author plus seventy years).
98. See 17 U.S.C. "sect; 109(a) (1994) ([T]he owner of a particular copy or phonorecord . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.).
99. See 17 U.S.C. "sect; 107 (1994) ([T]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.).
100. Digitization enables serial reproduction at negligible cost, while interconnectivity enables cost-free instant distribution. See NICHOLAS NEGROPONTE, BEING DIGITAL 59 (1995) ([W]ith less than a dozen keystrokes, I could redeliver that material to literally thousands of people all over the planet....).
101. A 1997 study found that the global software industry suffered annual losses of "dollar;11.4 billion because of piracy. See Software Publishers Ass'n, 1997 Global Software Piracy Report (visited Apr. 19, 1999) http://www.spa.org/piracy/releases/97pir.htm (on file with the Harvard Law School Library).
102. Commercial material includes music and video content as well as best selling books. It may be loosely generalized as material whose creation is explained by the economic rationale of copyright.
103. Examples of these technologies include password-access systems and digital watermarking. See, e.g., Digimarc "amp; Copyright Protection (visited Apr. 19, 1999) http://www.digimarc.com/ap plications/copyright/copyright_in.html (on file with the Harvard Law School Library) (explaining the ways in which digital watermarking of online content enables copyright owners to find unauthorized copies of their work online and to prove, with the watermark, that the copies originated from their work); Lexis-Nexis Xchange (visited Apr. 19, 1999) http://www.lexis.com/re search (on file with the Harvard Law School Library) (prompting the user for an identification name and password).
104. The term trusted systems, coined by Mark Stefik, is often used to describe rights-management technologies. Mark Stefik, Letting Loose the Light: Igniting Commerce in Electronic Publication, in INTERNET DREAMS: ARCHETYPES, MYTHS, AND METAPHORS 219, 226 (Mark Stefik ed., 1996)
105. [hereinafter Stefik, Letting Loose]; Mark Stefik, Shifting the Possible: How Trusted Systems and Digital Property Rights Challenge Us to Rethink Digital Publishing, 12 BERKELEY TECH. L.J. 137, 139-40 (1997). The term rights-management container is used throughout this Part because it does not imply a connection to a particular proprietary technology.
106. See, e.g., Olin Sibert, David Bernstein "amp; David Van Wie, Securing the Content, Not the Wire, for Information Commerce (visited Apr. 19, 1999) http://www.intertrust.com/architecture/ stc.html (on file with the Harvard Law School Library) (describing the operation of the InterTrust Corporation's DigiBox container).
107. This is accomplished through public and private key cryptography, which can be made strong enough to discourage almost all efforts to break it. See generally A. Michael Froomkin, The Metaphor Is the Key: Cryptography, the Clipper Chip, and the Constitution, 143 U. PA. L. REV. 709, 718-34 (1995) (detailing some of the uses of cryptography and the legal issues raised by these uses).
108. See, e.g., Mark Gimbel, Some Thoughts on the Implications of Trusted Systems for Intellectual Property Law, 50 STAN. L. REV. 1671, 1676-80 (1998) (describing the rights-management language of trusted systems).
109. The paradigmatic example of this problem is the file format known as mp3, which allows digital audio files to be compressed to a fraction of their usual size, thus enabling them to be stored and played on computers. Shareware programs are available to convert compact discs (CDs) into mp3 format so that any CD can be digitally encoded and distributed via the Internet, e-mail, or floppy disk. Rights-management technology is not a solution to the existing mp3 piracy problem. It merely provides a means for the legitimate online distribution of digital content. See MP3.com (visited Apr. 19, 1999) http://www.mp3.com (on file with the Harvard Law School Library) (providing links to mp3 news and resources); MP3 Rocks the Web, WIRED (Feb. 23, 1999) http://www.wired.com/news/news/mpthree (on file with the Harvard Law School Library) (linking to news stories on mp3 and related technologies); see also Recording Indus. Ass'n of Am., Inc. v. Diamond Multimedia Sys., Inc., 29 F. Supp. 2d 624, 625 (C.D. Cal. 1998) (denying the RIAA's request for a temporary restraining order to prevent distribution of the Rio, a device capable of storing and replaying mp3 files).
110. See, e.g., Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998) (to be codified at 17 U.S.C. "sect; 1201) (No person shall circumvent a technological measure that effectively controls access to a work protected under this title.). One commentator argues that, because rights-management containers can be used to lock up information that should be freely accessible, there should be a right to hack into rights-management systems in order to obtain this information.
111. See Julie E. Cohen, Copyright and the Jurisprudence of Self-Help, 13 BERKELEY TECH. L.J. 1089, 1141 (1998) (If the user privileges established by copyright . . . are to mean anything, users must be afforded affirmative rights to protect themselves. A 'right of fair breach' is meaningless unless it includes a right to effectuate the breach - a right to hack the digital code that implements and enforces the challenged restriction.); Pamela Samuelson, The U.S. Digital Agenda at WIPO, 37 VA. J. INT'L L. 369, 410 (1997) (criticizing the perceived need for law to regulate infringement-enabling technologies). To the extent that liability rule protection is neces-sary to prevent the circumvention of rights-management technologies, the transformation to a property rule regime remains incomplete.
112. See Niva Elkin-Korn, Cyberlaw and Social Change: A Democratic Approach to Copyright Law in Cyberspace, 14 CARDOZO ARTS "amp; ENT. L.J. 215, 290 (1996) ([Access control] gives copyright owners the power to prevent any unauthorized use and not just uses that are protected under copyright law.); Jessica Litman, The Exclusive Right to Read, 13 CARDOZO ARTS "amp; ENT. L.J. 29, 40 (1994) (United States copyright law has always given copyright owners some form of exclusive reproduction right. It has never before now given them an exclusive reading right, and it is hard to make a plausible argument that Congress would have enacted a law giving copyright owners control of reading.) (footnote omitted).
113. The access licenses granted by rights-management systems are enforced by computers, not courts, thus leaving no opportunity for judicial review of contractual terms or fair use. See Gimbel, supra note 99, at 1685 (A traditional contract can always be breached, and it ultimately depends on the courts for its enforcement . . . . But with a digital contract there will most likely be no such occasion for judicial intervention.).
114. The ability to control access entails the ability to deny access. Under a rights-management regime, this power is vested completely in the copyright owner and may be exercised in an arbitrary or discriminatory manner.
115. See 17 U.S.C. "sect;"sect; 102, 302 (1994) (defining the limits of copyright protection and, thus, the public domain).
116. See 17 U.S.C. "sect; 109 (1994).
117. See id. "sect; 107.
118. Recently, Congress has shown little respect for the public domain by extending the copyright term to life plus seventy years. See Copyrights -Term Extension and Music Licensing Exemption, Pub. L. No. 105-298, "sect; 102, 112 Stat. 2827 (1998) (to be codified at 17 U.S.C. "sect; 302).
119. Of course, the unprotectable elements of a work -for example, uncopyrightable ideas - will always be in the public domain and are thus unlikely to be substantially affected by the development of rights-management technology. See generally Jessica Litman, The Public Domain, 39 EMORY L.J. 965 (1990) (offering a broad survey of the public domain by describing the theoretical justifications of the law alongside the activities of authors).
120. See infra p. 1655.
121. When asked for his opinion on fair use rights, Microsoft CEO Bill Gates is said to have replied: You don't need fair use; we'll give you fair-use rights when you need them. See Pamela Samuelson, Legally Speaking: Does Information Really Need to be Licensed, COMM. OF THE ACM, Sept. 1998, at 15, 18 (relating the anecdote of a student intern) (internal quotation marks omitted).
122. See 17 U.S.C. "sect; 108 (1994) (granting libraries limited rights to reproduce copyrighted material for distribution to members).
123. See Lessig, Chicago, supra note 3, at 662-63 (arguing that behavior is regulated by four types of constraints: law, social norms, markets, and architecture).
124. See, e.g., Cohen, supra note 101; Pamela Samuelson, The Copyright Grab, WIRED, Jan. 1996, at 191 (criticizing the strengthening of copyright monopolies).
125. For example, antitrust law may be used to prevent digital distributors from fixing prices and from charging prices far in excess of marginal cost. See Sherman Act, 15 U.S.C. "sect; 1 (1994) (Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.).
126. Rights-management technologies arose in response to a demand by copyright owners for some means of protecting their property online.
127. Digital music, for example, no longer needs to be encoded onto a plastic disc, which is shipped to retail outlets, where it consumes shelf space and requires the attention of salespersons. Online distribution reduces manufacturing costs and eliminates the retail costs that are otherwise reflected in the final price of the merchandise.
128. Content providers pass savings on to the customer because a failure to price near marginal cost may constitute an antitrust violation.
129. See Tom W. Bell, Fair Use vs. Fared Use: The Impact of Automated Rights Management on Copyright's Fair Use Doctrine, 76 N.C. L. REV. 557, 566 (1998) (More sophisticated [rights-management] systems . . . employ methods such as steganography, micropayments, and imbedded applications to give information providers exact and continuous control over proprietary information.) (footnotes omitted).
130. See Brad Cox, Superdistribution, WIRED, Sept. 1994, at 91-92 (arguing that digital material, through ease of copying and distribution, enables a new kind of information commerce based on widespread distribution); see also Bell, supra note 119, at 567 ([Rights-management technology] allows information providers to market documents that disallow certain types of uses (e.g., copying) and provide continuing revenue (e.g., charging 2 ( per access) regardless of who holds the document (e.g., including someone who obtained it post-first sale).); Stefik, Letting Loose, supra note 96, at 235 (Digital property can be anywhere on the planet without the knowledge of its creators and still make money for them whenever it is used or copied by a repository.).
131. Providers could impose fees at any point during this transaction. It might be in their best interests, however, to charge only for the end-use because charging a fee at the copying stage might provide a disincentive to make and disseminate copies.
132. The standard economic rationale for copyright is discussed above at p. 1649 and note 86. See also Hardy, supra note 13, at 221 (describing alternative economic models for information exchange); Eric Schlachter, The Intellectual Property Renaissance in Cyberspace: Why Copyright Law Could Be Unimportant on
133. The second of the four factors under "sect; 107 considers the nature of the copyrighted work. 17 U.S.C. "sect; 107(2) (1994). Courts have applied this factor to permit fair use for some kinds of works more than others. See, e.g., Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 348-51 (1991) (comparing creative works with factual compilations); Stewart v. Abend, 495 U.S. 207, 237-38 (1990) (comparing fictional and factual works); Harper "amp; Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 563-64 (1985) (comparing published and unpublished works); Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 455 n.40 (1984) (comparing movies and news broadcasts).
134. Pornographic photographs and popular singles are common targets of online piracy. It is difficult to imagine a scenario in which a user could construct a successful fair use defense based on "sect; 107's four factors to preserve free access to a Miss January photograph or to an Alanis Morissette song.
135. Potential legislative restraints include the mandatory inclusion of a fair rights regime or copy duty in rights-management technologies.
136. See Samuelson, supra note 114, at 191.
137. In the words of Holmes: [The state's] cumbrous and expensive machinery ought not to be set in motion unless some clear benefit is to be derived from disturbing the status quo. State interference is an evil, where it cannot be shown to be a good. OLIVER WENDELL HOLMES, JR., THE COMMON LAW 77 (Mark DeWolfe ed., 1963) (1881).
138. See generally Randall Jackson, National Conference of State Legislatures, Information Technology and Internet Laws Passed in 1998 (visited Apr. 19, 1999) http://www.ncsl.org/pro grams/lis/cip/technet98.htm (on file with the Harvard Law School Library) (summarizing major state legislation about the Internet and noting that in 1998 every state legislature considered bills in this area).