Were there legal issues when the
Internet was very young and involved mostly the government and universities?
"The legal issues to the extent that anybody ever thought about them were 'we
really shouldn't have all these commercial people here, and we'll make sure that we keep
them out' and the acceptable use guidelines. They could have had the same issues that you
see now, with Microsoft during the
trial or other companies have had, where people went back and took a look at their e-mail
records, but nobody ever thought to do that, and they never had those problems.
"It is now being uncovered that things that are considered secrets, trade secret
information was being exchanged by scientists in manners that perhaps were not best
practices, and in fact a lot of scientific organizations have gotten themselves in trouble
lately because people have now started to understand what that free exchange of
information among scientists can mean for national security. At the time, more than ten
years ago, or about that time, nobody ever thought about it. Nobody ever thought about the
ethical issues, the legal issues very much, certainly not the export issues."
How did the legal issues and the need
for laws to be applied to the Internet arise?
"Interestingly enough the issues arose becuase new people started using the system
- doing things that annoyed other people who were there already. The other people already
there had their own set of rules which they had put together and published, and everybody,
before the Net became commercialized, respected those rules, read them first, understood
them, and fit themselves into the community that was online. And then you started having
new people came online and started exploiting the medium in a manner that was different
and caused a lot of upset.
"So the first people really to highlight some of the legal issues on the Internet
were two lawyers, Canter and Siegel who spammed the entire Net, all
the newsgroups on the Net, for advertisements for their services and created a huge
backlash nationwide, and eventually they got disbarred for soliciting clients in places
where they weren't licensed to do that and a few other issues. But it is the influx of new
people to the media doing things outside the established rules, and them really starting
to annoy people that fermented all these issues that nobody ever dealt with before."
What were the earliest legal issues that
had to be dealt with?
"The earliest legal issues had to do with what was acceptable behavior on the
Internet which was mostly...unsolicited commercial behavior. Concurrent with that, sex and
pornography and alleged obscenities were the biggest issues on the Internet. And it was
obscenity, alleged obscenity, that forced the issue whether different states could
regulate the Internet."
What are the legal issues surrounding
hackers and security?
"Hackers were always an issue, but they weren't seen as a legal issue. There was
always an issue of people gaining unauthorized access to computer systems using the
Interent or getting unauthorized assistance within their own companies, and those were
dealt with one way or another. The Justice Department in the early 90's and the federal
government started cracking down on all these hackers in an episode recounted in the [CyberLaw]
book called the 'hacker crackdown', and the computing community knew all these folks, or
many of them, a lot of them had been very involved in places like The WELL which was an online system that was based in
Sausalito but had international usage.
"And at first people rejected the idea what hackers were doing was a bad thing and
people actually distinguished between hackers who just went in and played in people's
systems and didn't do any damage, and crackers who were the bad folks and came in and did
damage. And there weren't too many people who did damage. When the hacker crackdown
occurred in the early 90's, Bruce Sterling wrote a book called The Hacker Crackdown,
where he quite correctly criticized society and the press in particular, who didn't
understand really what was going on, for demonizing people whose real action was to reveal
to the rest of the world how poorly conceived the security was on critical systems on
which they relied.
"It wasn't that these people had done something, they had just pointed out to
people how bad security was. And compared with what people did in spamming and some of the
other untoward things that were going on on the Internet like child pornography when that
was discovered and things like that, hackers were really a very trivial problem. But they
got blown out of proportion by the press, and in fact, concerns about security have
continued to take up inordinate amounts of their time to the detriment of the benefits of
the Internet and how it could be used, and has even confused people as to the real power
of the Internet to help them in commerce."
What besides security are big issues
today?
"If you read the polls that are being conducted and listen to lots of folks,
security isn't the main issue; privacy is the main issue. There's a lot of freedom in not
having people have access to all kinds of facts about your behaviour, your history, your
lifestyle, the choices that you make. Until very recently, you were able to preserve that
freedom simply by picking up and going somewhere else, because people couldn't tie
together their information on you in one place to your behavior in another place. You
could make new friends, do different things, have different jobs. Now their information is
being tied together and there are all kinds interesting and sometimes insidious uses to
which the information can be put, can be collected, gathered and sorted.
"At one end, you have the problem where people can take your information and
target it for unlawful action. For example, there have been cases where police officials
have disclosed to anti-abortion groups the home addresses and the names of people who work
in Planned Parenthood
clinics. And we've had results where Planned Parenthood workers and doctors have been
assassinated, harassed, and everything else.
"On the [other] end of the spectrum of bad things you just simply have a loss of
freedom, where people can more efficiently target your likes and dislikes and present you
with choices which are predicted on your past behavior, so you don't get to see things
that you might otherwise have seen - so your reality starts to be created by other people
based on their guesses of what it is that you like as opposed to what you would normally
run into in a more rural or less technological society."
How succesfully have existing laws been
applied to the Internet, or do new laws need to be created?
"The way lawyers deal with problems is they always take a look at what has been
done and what has been decided and tried to apply to it to new cases. For the most part
this works with the Internet. There are some interesting problems that the Internet poses
because it's not restricted in scope or extent to a particular geography or community of
people, and a lot of people argued that laws need to change to be able to acommodate what
people are doing online. on the other hand different geographies, different peoples,
different cultures have different priorities and those are expressed in their laws, and to
expect that you can homogenize them all and make everybody happy is not really realistic.
"...Lawyers will do their best to plod through and find things that are absurd and
eliminate them from the law, but in fact lawyers will always argue from past cases to keep
stabilization, to stop certain things from occurring, and the biggest push will be for the
lawyers to understand the technology more, to understand where problems are going, and
being able to advise their clients on what likely outcomes will be so they don't recommend
that they conduct themselves which are likely to highlight risks for themselves.
"For example when the press started writing a lot about the Internet, people were
talking about what a big thing Internet gaming is going to be, or Internet gambling. But
in fact Internet gambling is illegal virtually anywhere in the United States, so it's very
hard to see how anybody is going to be able to anchor a business like that in the United
States, and it doesn't look like it's going to change anytime soon. And there's a lot of
argument that people should not be allowed to offer gambling and gaming from outside the
United States to U.S. citizens because of the fraud potential, the different types of
regulation you need to have on gambling to protect consumers. So if you had suggested
Internet gambling as a real good business for your client and disregarded the fact that
there are well established laws in place against that, you would have been wrong - for
yourself and your client."
Those laws weren't specifically about
Internet gambling, were they?
"The laws basically were very strongly written to prohibit any unauthorized
gambling, even to the extent of you couldn't use telphone lines. There are very strong
vested interests who are anti any type of gambling unless it's highly regulated. So
looking at the way gambling was restricted and regulated in the United States, knowing
that it covered telephone lines, knowing the Internet ran on telephone lines, it was
highly likely that any efforts at gambling would be met by states...in a very strong
fashion in opposition, and in fact that's exactly what happened.
"In one of the states, Minnesota, which had really huge amounts of allowable
gambling in state, which was mostly church gambling, would certainly not look very kindly
on people coming in from Belize in an unregulated fashion taking away from the church and
other folks the gambling revenues that they were able to legally obtain and use."
It sounds like in that case the laws
were clear and there was no real difficulty enforcing them when it came to the Internet.
Are there other cases, for example e-commerce and regular commerce, where it's more
difficult to apply those laws to the electronic version of the activity?
"Most electronic commerce is pretty simple when it comes to legal and regulatory
prohibitions, because it's not very different from mail-order and telephone order sales.
But where difficulties have come is that the velocity of the growth and the flow of money
towards Internet sales has been such that it's highlighted problems that nobody's ever
resolved satisfactorily in key areas. And the key area that we see talked about now is
taxation.
"State taxes are based on a manufacturing economy, not a service economy. and most
of the United States - 80% of the economy is based on services so people were already slow
on the uptake in this change in the foundation of the economy. Now that people can sell
without a physical presence in another state and using UPS instead of their own delivery
system, states are losing sales. They're losing sales taxes, they're not having use taxes
collected, and to the extent that it wipes out certain industries, they're losing industry
as well. How do they get the revenue back? They don't know but now it's more than clear
that they have to figure out different ways to tax services as well as distant sellers,
and this is a focus for huge debate. And there's a moratorium right now, and
notwithstanding the moratorium, you're seeing lawsuits being filed just on how people will
go forward and think about what will happen after the moratorium."
Have legal issues affected how the
government acts, in regards to the Internet?
"It's a question of circumstance and degree. Governments are now seeking more
proactively to protect consumers in a broader range of activites than previously. The
first efforts that government and law enforcemnet made were to protect people from bad
things like child pornography and access to obscene material. Because there was a lot of
it. Now that has broadened because the Internet is being used to conduct fraud to a large
degree, particularly in securities trading, in the trading of goods.
"For example, eBay, the auction
site, has had a whole bunch of problems which you...usually find in your corner flea
market. If people misrepresent what they have or don't know, people don't have their
expectations met. Sometimes they're outright defrauded and people get very upset about it,
so the government has stepped in to start taking a look at those problems. They've also
gone to look at the conduct of more established businesses - financial services sites
where you can conduct electronic trading in securities, in the main to protect the
confidence in the system. ...A person puts in an order to buy when a stock is just going
public at ten dollars, and the system falls down because of technical problems, comes back
up, the buy order is there [and] gets executed, now it's sixty dollars. You get a lot of
unhappy buyers because they've lost the opportunity they would have had. But the order
wasn't cancelled; the order was still active, and they end up buying for a lot more money
than they otherwise would have anticipated.
"There have been a number of measures that have been in the market in financial
services that compel the institutions themselves to watch out for the interests of their
customers and speak with them, to a certain degree, about whether what they're doing might
be inappropriate. And you see a lot of tension between that and the rise of say, day
trading, where people are getting the idea they can make a huge amount of money getting on
the Internet and trading every hour or so, and losing vast amounts of moeny. The
government is stepping in to take a look at whether that's appropriate or not. So there's
a few examples across a range of where government's getting a lot more involved."
Are businesses trying to get away with
whatever they can, or do they ever take a step back and look at what they can do that the
government won't want to step in and regulate?
"There are aggressive entrepreneurs, and there are more conservative
entrepreneurs. A lot of aggressive entrepreneurs are making a lot of money and are really
pushing some issues to the edge. And there are companies out there who are not in a
position to be as aggressive, who are more established and can't afford the risks that
some of the more aggressive entrepreneurs can run. And at some point the more established
companies suffer a huge competitve disadvantage if they don't start pushing towards where
the more aggressive companies are.
"To use a simple example, if a big bookseller takes the position that even though
it sells books across the United States, but it's only headquartered in the far West, it
doesn't have to charge sales tax. No matter what a competitor thinks with lots of stores
across the country, it's not going to be able to do very well if it can't also figure out
a strategy where it can sell free of sales tax as well. It's going to have push that way,
otherwise it's going to lose a huge part of market share. So one follows the other, and
either somebody comes in like the government and evens the playing field and tells
everybody what the rules are, or everybody has to start pushing in the way of the most
aggresive folks to preserve their business. Otherwise they can stay outside of the market
space and suffer the consequences."
Are there legal issues that
individuals need to be concerned about when they go on the Web?
"There's probably a whole range of things that people know from common sense that
perhaps they shouldn't be doing in the temporal sphere. ...Even though the Internet looks
anonymous, and they think they can get away with doing things they otherwise shouldn't be
doing in real life...they can get away with online, but in fact the anonymity on the
Internet is pretty ephemeral and doesn't really exist. There are certain things that they
can do which persist for an awfully long time.
"For example, an unfortunate comment that you might make about somebody will
persist for an awfully long time if you do it on a newsgroup; it can be searched under
your name. For example it could be alleged to be defamatory, where you said it in normal
conversation, you just happen to be typing it but, you don't realize that's really
defamation or you passed along somebody else's nasty and rude comment about another person
not realizing you're re-publishing a defamation.
"I think people get themselves into trouble when they really try to get away with
things online that they wouldn't get away with in the real world and then are surprised
when they're caught."
Any final comments about where Internet
law is heading in the future and what the major issues might be?
"I think Internet law is heading to a space where it requires a lot more lawyers
to understand the fundamental technology involved, to get involved with the technologies
themselves and start using them to a much greater degree than they are now - so they can
understand not only what they're clients are doing, but understand the future implications
of the technology and where it's headed so they can help their client succeed and be
successful in going forwards.
"The big legal issues on the Internet are probably going to be more of the same
issues we're looking at now. I think a key one is how do you preserve privacy, and what
will the liabilities be for not paying enough attention to fundamental things like
security and data integrity and data protection. But there're also going to be how to
balance different states' needs to protect their own consumers with some of the great
opportunities that are provided by electronic commerce, Internet business, in reducing
costs to a huge degree. So do you really have to make sure that form is in French in case
a French person comes there? For example will you run a big risk of a French
person...being able to repudiate their transaction because they conducted it, they got the
goods, but they decide they don't want to follow the rules that you've established because
you didn't actually do it according to French law. That type of thing."
Top of Page
Please direct questions or comments to iota.webmaster@umich.edu.
Last Updated April 12, 1999
