Science and Technology Law Commons^™

A Public Technology Option, Hannah Bloch-Wehba

Faculty Scholarship

Private technology increasingly underpins public governance. But the state’s growing reliance on private firms to provide a variety of complex technological products and services for public purposes brings significant costs for transparency: new forms of governance are becoming less visible and less amenable to democratic control. Transparency obligations initially designed for public agencies are a poor fit for private vendors that adhere to a very different set of expectations.

Aligning the use of technology in public governance with democratic values calls for rethinking, and in some cases abandoning, the legal structures and doctrinal commitments that insulate private vendors from meaningful …

After Ftx: Can The Original Bitcoin Use Case Be Saved?, Mark Burge

Faculty Scholarship

Bitcoin and the other cryptocurrencies spawned by the innovation of blockchain programming have exploded in prominence, both in gains of massive market value and in dramatic market losses, the latter most notably seen in connection with the failure of the FTX cryptocurrency exchange in November 2022. After years of investment and speculation, however, something crucial has faded: the original use case for Bitcoin as a system of payment. Can cryptocurrency-as-a-payment-system be saved, or are day traders and speculators the actual cryptocurrency future? This article suggests that cryptocurrency has been hobbled by a lack of foundational commercial and consumer-protection law that …

The Failure Of Market Efficiency, William Magnuson

Faculty Scholarship

Recent years have witnessed the near total triumph of market efficiency as a regulatory goal. Policymakers regularly proclaim their devotion to ensuring efficient capital markets. Courts use market efficiency as a guiding light for crafting legal doctrine. And scholars have explored in great depth the mechanisms of market efficiency and the role of law in promoting it. There is strong evidence that, at least on some metrics, our capital markets are indeed more efficient than they have ever been. But the pursuit of efficiency has come at a cost. By focusing our attention narrowly on economic efficiency concerns—such as competition, …

Europe's Digital Constitution, Anu Bradford

Faculty Scholarship

This Article uncovers the fundamental values underlying the European Union’s expansive set of digital regulations, which in aggregate can be viewed as Europe’s “digital constitution.” This constitution engrains Europe’s human-centric, rights-preserving, democracy-enhancing, and redistributive vision for the digital economy into binding law. This vision stands in stark contrast to the United States, which has traditionally placed its faith in markets and tech companies’ self-regulation. As a result, American tech companies today are regulated primarily by Brussels and not by Washington. By highlighting the distinctiveness and the global reach of the European digital constitution, this Article challenges the common narrative that …

Algorithmic Governance From The Bottom Up, Hannah Bloch-Wehba

Faculty Scholarship

Artificial intelligence and machine learning are both a blessing and a curse for governance. In theory, algorithmic governance makes government more efficient, more accurate, and more fair. But the emergence of automation in governance also rests on public-private collaborations that expand both public and private power, aggravate transparency and accountability gaps, and create significant obstacles for those seeking algorithmic justice. In response, a nascent body of law proposes technocratic policy changes to foster algorithmic accountability, ethics, and transparency.

This Article examines an alternative vision of algorithmic governance, one advanced primarily by social and labor movements instead of technocrats and firms. …

Content Moderation As Surveillance, Hannah Bloch-Wehba

Faculty Scholarship

Technology platforms are the new governments, and content moderation is the new law, or so goes a common refrain. As platforms increasingly turn toward new, automated mechanisms of enforcing their rules, the apparent power of the private sector seems only to grow. Yet beneath the surface lies a web of complex relationships between public and private authorities that call into question whether platforms truly possess such unilateral power. Law enforcement and police are exerting influence over platform content rules, giving governments a louder voice in supposedly “private” decisions. At the same time, law enforcement avails itself of the affordances of …

Legislating Data Loyalty, Woodrow Hartzog, Neil Richards

Faculty Scholarship

Lawmakers looking to embolden privacy law have begun to consider imposing duties of loyalty on organizations trusted with people’s data and online experiences. The idea behind loyalty is simple: organizations should not process data or design technologies that conflict with the best interests of trusting parties. But the logistics and implementation of data loyalty need to be developed if the concept is going to be capable of moving privacy law beyond its “notice and consent” roots to confront people’s vulnerabilities in their relationship with powerful data collectors.

In this short Essay, we propose a model for legislating data loyalty. Our …

Data Autonomy, Cesare Fracassi, William Magnuson

Faculty Scholarship

In recent years, “data privacy” has vaulted to the forefront of public attention. Scholars, policymakers, and the media have, nearly in unison, decried the lack of data privacy in the modern world. In response, they have put forth various proposals to remedy the situation, from the imposition of fiduciary obligations on technology platforms to the creation of rights to be forgotten for individuals. All these proposals, however, share one essential assumption: we must raise greater protective barriers around data. As a scholar of corporate finance and a scholar of corporate law, respectively, we find this assumption problematic. Data, after all, …

A Unified Theory Of Data, William Magnuson

Faculty Scholarship

How does the proliferation of data in our modern economy affect our legal system? Scholars that have addressed the question have nearly universally agreed that the dramatic increases in the amount of data available to companies, as well as the new uses to which that data is being put, raise fundamental problems for our regulatory structures. But just what those problems might be remains an area of deep disagreement. Some argue that the problem with data is that current uses lead to discriminatory results that harm minority groups. Some argue that the problem with data is that it impinges on …

Algorithms In Business, Merchant-Consumer Interactions, & Regulation, Tabrez Y. Ebrahim

Faculty Scholarship

The shift towards the use of algorithms in business has transformed merchant–consumer interactions. Products and services are increasingly tailored for consumers through algorithms that collect and analyze vast amounts of data from interconnected devices, digital platforms, and social networks. While traditionally merchants and marketeers have utilized market segmentation, customer demographic profiles, and statistical approaches, the exponential increase in consumer data and computing power enables them to develop and implement algorithmic techniques that change consumer markets and society as a whole. Algorithms enable targeting of consumers more effectively, in real-time, and with high predictive accuracy in pricing and profiling strategies. In …

Beyond Transparency And Accountability: Three Additional Features Algorithm Designers Should Build Into Intelligent Platforms, Peter K. Yu

Faculty Scholarship

In the age of artificial intelligence, innovative businesses are eager to deploy intelligent platforms to detect and recognize patterns, predict customer choices and shape user preferences. Yet such deployment has brought along the widely documented problems of automated systems, including coding errors, corrupt data, algorithmic biases, accountability deficits and dehumanizing tendencies. In response to these problems, policymakers, commentators and consumer advocates have increasingly called on businesses seeking to ride the artificial intelligence wave to build transparency and accountability into algorithmic designs.

While acknowledging these calls for action and appreciating the benefits and urgency of building transparency and accountability into algorithmic …

The Easterbrook Theorem: An Application To Digital Markets, Joshua D. Wright, Murat C. Mungan

Faculty Scholarship

The rise of large firms in the digital economy, including Amazon, Apple, Facebook, and Google, has rekindled the debate about monopolization law. There are proposals to make finding liability easier against alleged digital monopolists by relaxing substantive standards; to flip burdens of proof; and to overturn broad swaths of existing Supreme Court precedent, and even to condemn a law review article. Frank Easterbrook’s seminal 1984 article, The Limits of Antitrust, theorizes that Type I error costs are greater than Type II error costs in the antitrust context, a proposition that has been woven deeply into antitrust law by the Supreme …

Automation In Moderation, Hannah Bloch-Wehba

Faculty Scholarship

This Article assesses recent efforts to encourage online platforms to use automated means to prevent the dissemination of unlawful online content before it is ever seen or distributed. As lawmakers in Europe and around the world closely scrutinize platforms’ “content moderation” practices, automation and artificial intelligence appear increasingly attractive options for ridding the Internet of many kinds of harmful online content, including defamation, copyright infringement, and terrorist speech. Proponents of these initiatives suggest that requiring platforms to screen user content using automation will promote healthier online discourse and will aid efforts to limit Big Tech’s power.

In fact, however, the …

Can Algorithms Promote Fair Use?, Peter K. Yu

Faculty Scholarship

In the past few years, advances in big data, machine learning and artificial intelligence have generated many questions in the intellectual property field. One question that has attracted growing attention concerns whether algorithms can be better deployed to promote fair use in copyright law. The debate on the feasibility of developing automated fair use systems is not new; it can be traced back to more than a decade ago. Nevertheless, recent technological advances have invited policymakers and commentators to revisit this earlier debate.

As part of the Symposium on "Intelligent Entertainment: Algorithmic Generation and Regulation of Creative Works," this Article …

Nascent Competitors, C. Scott Hemphill, Tim Wu

Faculty Scholarship

A nascent competitor is a firm whose prospective innovation represents a serious threat to an incumbent. Protecting such competition is a critical mission for antitrust law, given the outsized role of unproven outsiders as innovators and the uniquely potent threat they often pose to powerful entrenched firms. In this Article, we identify nascent competition as a distinct analytical category and outline a program of antitrust enforcement to protect it. We make the case for enforcement even where the ultimate competitive significance of the target is uncertain, and explain why a contrary view is mistaken as a matter of policy and …

The Promise And Limits Of Cyber Power In International Law: Remarks, Monica Hakimi, Ann Väljataga, Zhixiong Huang, Charles Allen, Sue Robertson, Doug Wilson

Faculty Scholarship

Hi, everyone. I am Monica Hakimi from the University of Michigan Law School, and I would like to welcome you to our panel on cyber power and its limits. The topic almost does not need an introduction. We all know just from reading the news that our collective dependence on cyberspace is also a huge vulnerability, and state and non-state actors exploit this vulnerability to do one another harm. They use cyber technologies not just to spy on one another, but also, for example, to interfere in national elections, to steal trade secrets or other valuable information, to disrupt the …

National Cybersecurity Innovation, Tabrez Y. Ebrahim

Faculty Scholarship

National cybersecurity plays a crucial role in protecting our critical infrastructure, such as telecommunication networks, the electricity grid, and even financial transactions. Most discussions about promoting national cybersecurity focus on governance structures, international relations, and political science. In contrast, this Article proposes a different agenda and one that promotes the use of innovation mechanisms for technological advancement. By promoting inducements for technological developments, such innovation mechanisms encourage the advancement of national cybersecurity solutions. In exploring possible solutions, this Article asks whether the government or markets can provide national cybersecurity innovation. This inquiry is a fragment of a much larger literature …

Informed Trading And Cybersecurity Breaches, Joshua Mitts, Eric L. Talley

Faculty Scholarship

Cybersecurity has become a significant concern in corporate and commercial settings, and for good reason: a threatened or realized cybersecurity breach can materially affect firm value for capital investors. This paper explores whether market arbitrageurs appear systematically to exploit advance knowledge of such vulnerabilities. We make use of a novel data set tracking cybersecurity breach announcements among public companies to study trading patterns in the derivatives market preceding the announcement of a breach. Using a matched sample of unaffected control firms, we find significant trading abnormalities for hacked targets, measured in terms of both open interest and volume. Our results …

Humans Forget, Machines Remember: Artificial Intelligence And The Right To Be Forgotten, Tiffany Li, Eduard Fosch Villaronga, Peter Kieseberg

Faculty Scholarship

To understand the Right to be Forgotten in context of artificial intelligence, it is necessary to first delve into an overview of the concepts of human and AI memory and forgetting. Our current law appears to treat human and machine memory alike – supporting a fictitious understanding of memory and forgetting that does not comport with reality. (Some authors have already highlighted the concerns on the perfect remembering.) This Article will examine the problem of AI memory and the Right to be Forgotten, using this example as a model for understanding the failures of current privacy law to reflect the …

Zappers, Phantomware And Other Sales Suppression Software In The State Of Washington, Richard Thompson Ainsworth, Robert Chicoine

Faculty Scholarship

Electronic sales suppression (ESS) is a fraud that has been a (prominent) feature of the North American retail business since at least 1996. The first EES case in the US dates from 1981. ESS is a global problem. Depending on the jurisdiction, and the research study consulted, ESS is estimated to be present in 34% (of Canadian), 50% (of German – two studies), and 70% (of Swedish and Slovenian) businesses. It may be the case today, that “you cannot leave home without” encountering (or participating in) ESS.

The most common types of sales suppression technology are Zappers and Phantomware programming. …

Prediction, Persuasion, And The Jurisprudence Of Behaviorism, Frank A. Pasquale, Glyn Cashwell

Faculty Scholarship

No abstract provided.

Sources Of Tech Platform Power, Lina M. Khan

Faculty Scholarship

A handful of tech platforms mediate a large and growing share of our commerce and communications. Over the last year, the public has come to realize that the power these firms wield may pose significant hazards. Elected leaders ranging from Senator Elizabeth Warren (D-MA) to Senator Ted Cruz (R-TX) have expressed alarm at the level of control that firms like Amazon, Alphabet (Google’s parent company), and Facebook enjoy. In a recent poll, a majority of Americans voiced concern that the government wouldn’t do enough to regulate U.S. tech companies. As the editor of BuzzFeed observed, a “major trend in American …

Liability For Providing Hyperlinks To Copyright-Infringing Content: International And Comparative Law Perspectives, Jane C. Ginsburg, Luke Ali Budiardjo

Faculty Scholarship

Hyperlinking, at once an essential means of navigating the Internet, but also a frequent means to enable infringement of copyright, challenges courts to articulate the legal norms that underpin domestic and international copyright law, in order to ensure effective enforcement of exclusive rights on the one hand, while preserving open communication on the Internet on the other. Several recent cases, primarily in the European Union, demonstrate the difficulties of enforcing the right of communication to the public (or, in U.S. copyright parlance, the right of public performance by transmission) against those who provide hyperlinks that effectively deliver infringing content to …

Prediction, Persuasion, And The Jurisprudence Of Behaviorism, Frank Pasquale, Glyn Cashwell

Faculty Scholarship

No abstract provided.

Interpretation Catalysts In Cyberspace, Rebecca Ingber

Faculty Scholarship

The cybersphere offers a rich space from which to explore the development of international law in a compressed time frame. This piece examines the soft law process over the last decade of the two Tallinn Manuals – handbooks on the international law of cyber warfare and cyber operations – as a valuable lens through which to witness the effects of “interpretation catalysts” on the evolution of international law. In prior work, I identified the concept of interpretation catalysts – discrete triggers for legal interpretation – and their influence on the path that legal evolution takes, including by compelling a decision-making …

Vat In The Gcc - Missing Trader Frauds, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

All VATs are susceptible to missing trader (MT) fraud. VATs adopted in an economic community are particularly more susceptible. The EU, for example, loses in excess of €100b annually to this fraud. Given the anticipated adoption of a European-style credit-invoice VAT in the GCC by January 1, 2018, this paper offers a technology-based solution involving the real-time tracking of taxable transactions with centrally collected (securely encrypted) data flows that are risk-analyzed by artificial intelligence (AI).

Failing Expectations: Fourth Amendment Doctrine In The Era Of Total Surveillance, Olivier Sylvain

Faculty Scholarship

Today’s reasonable expectation test and the third-party doctrine have little to nothing to offer by way of privacy protection if users today are at least conflicted about whether transactional noncontent data should be shared with third parties, including law enforcement officials. This uncertainty about how to define public expectation as a descriptive matter has compelled courts to defer to legislatures to find out what public expectation ought to be more as a matter of prudence than doctrine. Courts and others presume that legislatures are far better than courts at defining public expectations about emergent technologies.This Essay argues that the reasonable …

Sender Side Transmission Rules For The Internet, Tejas N. Narechania, Tim Wu

Faculty Scholarship

Since 1966, the Federal Communications Commission has, one way or another, protected businesses that deliver services over the nation’s communications infrastructure. But in January 2014, the U.S. Court of Appeals for the D.C. Circuit struck down the FCC’s net neutrality rules contained in its 2010 Open Internet Order. FCC Chairman Tom Wheeler has since indicated that he will take up the D.C. Circuit’s invitation to implement rules that, consistent with historic practice, “will meet the court’s test for preventing improper blocking of and discrimination among Internet traffic.”

Chairman Wheeler’s statement invites an obvious question: presuming that the FCC wants …

Wireless Localism: Beyond The Shroud Of Objectivity In Federal Spectrum Administration, Olivier Sylvain

Faculty Scholarship

Recent innovations in mobile wireless technology have instigated a debate between two camps of legal scholars about how policymakers should structure federal administration of the electromagnetic spectrum. The first argues that the Federal Communications Commission should define spectrum use rights more clearly and give spectrum licensees near fee-simple property rights in frequencies that they can use and sell in secondary markets as they wish. The second camp argues that, rather than award exclusive licenses to the highest bidder, the FCC ought to open much if not most of the spectrum to unlicensed use by smartphones and tablets equipped with the …

An American Look At Zappers: A Paper For The Physikalisch-Technische Bundesanstalt, Revisionssicheres System Zur Aufzeichnung Von Kassenvorgängen Und Messinformationenthe, Richard Thompson Ainsworth

Faculty Scholarship

The common observation in the U.S. is that enforcement against technology-facilitated sales suppression has fallen through an intra-jurisdictional crack. Neither federal nor state auditors systemically target this area. But this is changing, and the change is coming from the state side.

This paper has two main parts. First, it summarizes the current state of sales suppression enforcement in the U.S. Secondly, it reviews the international solutions that are attracting the most U.S. attention. A conclusion indicates likely directions for U.S. enforcement.

Georgia is the first state to take action. On May 3, 2011 Georgia added code section 16-9-62 to Georgia …