My PhD thesis is available here: Digital constitutionalism and the role of the rule of law in virtual communities.

Abstract:

This thesis considers one main question: how should we regulate the exercise of private governance power in virtual communities? This question centres on the legitimacy of governance in the way that community norms are created and enforced. This is the project of digital constitutionalism, which seeks to articulate a set of limits on private power that will best encourage innovation and autonomy and simultaneously protect the legitimate interests of participants in these increasingly important spaces. In answering this question, I provide a normative framework based upon the broad ideals of the rule of law through which to conceptualise the tensions about governance that arise in virtual communities.

The rule of law framework provides a constitutional discourse through which to examine the structure and practice of power relations in virtual communities. The standard model for conceptualising disputes between participants and providers of virtual communities has so far generally been based upon a classical model of contractual relations, and this has been supported by normative claims for a hands-off regulatory approach. This contractual governance model slowly replaces the law of the state with the private rules of the providers of virtual communities which mostly do not carry the same expectations of legitimacy. As this process continues over an increasingly wide range of human activity, there is a very real threat that the constitutional principles that we value begin to fade in relevance, leaving participants vulnerable to abuses of power in online spaces.

The contours of private law — and particularly contract law — provide the limits of permissible and legitimate private governance in these communities. The legal framework provides constant support and shapes the boundaries of internal governance. The rule of law legitimises governance in two senses here — it provides justification for the exercise of private power, but it also restrains the exercise of that power to make it more transparent, impartial, and fair. It is for these reasons that the bounds of the legal framework are critically important for the practise of governance; internal governance proceeds entirely in the shadow of the law, and the shape of the law changes the shape of the legitimate, permissible, and conceivable exercise of private power.

This thesis examines the flexibility in private law and argues that modern contractual doctrine should be informed by the values of the rule of law in order to provide a suitable regulatory framework that protects participants from abuses of power whilst remaining sensitive to the need to encourage innovation and investment in the development of virtual communities. This thesis provides a normative argument for the development of contractual doctrine and the exercise of judicial discretion in the resolution of disputes between participants and providers in a way that more accurately addresses the tensions of ongoing community governance. These disputes arise predominantly when either a participant or the provider seeks to enforce the rules of the community against the other; I focus, accordingly, on the way in which territorial states ought to support and limit the enforcement of community norms. I argue that the flexibility in the contractual framework should be exercised in a manner informed by the values of the rule of law. As a primary principle, this suggests that we should introduce appropriate limits on the contractual discretion of a provider to impose penalties and suspend or terminate a participant’s access to the community in line with the norms of the community. Additionally, I argue that providers should, in certain cases, be prevented from relying on contractual clauses that prevent participants from enforcing the rules.

In order to allow a contractual framework to be used to regulate governance in virtual communities, it must develop to more adequately conceptualise the role of punishment in the enforcement of community norms. Rule of law values suggest that these internal wrongs lack the requisite legitimacy to be directly enforceable and punishable by territorial law. This thesis accordingly argues that acts that are not recognisable as wrongs by the state but are only wrongs when viewed through the interpretative framework of community norms ought not to be punishable in territorial courts. It follows that criminal penalties are inappropriate for breach of internal norms, and also that civil remedies that have the practical effect of imposing penalties, like those available under copyright law and computer trespass torts and statutes, should not be available to fulfil a punitive function for breach of internal rules.

Rule of law values, however, also suggest that many virtual communities need the ability to impose punishments to maintain order within the community. I argue, accordingly, that the contractual framework must support the imposition of internal penalties where participants are able to avoid internal punishment, in addition to providing compensatory remedies to recover losses sustained through breaches of the rules. If the contractual framework is to be effective in fulfilling this role, I argue that we must further develop equitable remedies under contract law — specific performance and injunctive relief — to empower communities to enforce their own rules where they would otherwise be unable to. In providing the support that community governance requires, however, we must be extremely careful to differentiate between legitimate rules and enforcement mechanisms and illegitimate ones; both equitable and contractual remedies should accordingly only be available where the rules are clear, well promulgated, accepted and understood by the community, and applied in a fair and just manner.

This thesis concludes by examining the limits of the contractual governance framework, particularly the lack of privity between participants and other participants, and between participants or providers and external actors. The ability of courts to properly address disputes that arise outside of the contractual relationship between a participant and the provider depends predominantly on the evolution of other private law doctrines and the intersection of those doctrines with contract. For wrongs that are recognisable by territorial states, the contract provides an indicia of community norms, which delineate the scope of consent. Participants are accordingly able to enforce their rights in tort or other civil law actions against other participants with reference to the community norms, without necessarily relying on contractual remedies. Rule of law values also suggest that a provider may be liable, in some circumstances, for failing to enforce the rules of the community and, in addition, third party beneficiary doctrine will allow contractual enforcement in a limited but important set of circumstances. Nevertheless, some gaps exist, and participants within virtual communities may need assistance in order to enforce community norms within these gaps.

This thesis concludes that classical contractual doctrines provide an alienating and ill-fitting regulatory framework for virtual community governance, but that it can be significantly ameliorated through a conceptual framework provided by the values of the rule of law. The core problem is largely that community governance involves a set of constitutional tensions that are not able to be recognised in the standard contractual framework. If a contractual framework is to be used to regulate virtual communities, then, it follows that constitutional principles, and particularly rule of law values, ought to be used to inform the application and development of doctrine. If governance tensions can be assessed and addressed through a rule of law framework, then these private law forms may be able to provide a satisfactory approach to the regulation of private governance.

Over the last two days, I have been at the Copyright 2010 Conference hosted by the CIPL at ANU and organised by Dr Matthew Rimmer.

I presented two papers at this conference, one on moral rights and open licensing and another on graduated response schemes and the rule of law.

You can grab my slides for these here:

• Open licensing and moral rights (PDF)
• Graduated responses on the rule of law (PDF)

Abstracts below the fold:

Integrity, attribution, and exploitation: contractual and normative moral rights protection in open licensing

Over the last twenty years, the use of open content licenses has become increasingly and surprisingly popular. The use of such licences challenges the traditional incentive-based model of exclusive rights under copyright. Instead of providing a means to charge for the use of particular works, what seems important is mitigating against potential personal harm to the author and, in some cases, preventing non-consensual commercial exploitation. It is interesting in this context to observe the primacy of what are essentially moral rights over the exclusionary economic rights.

The core elements of common open content licences map somewhat closely to continental conceptions of the moral rights of authorship. Most obviously, almost all free software and free culture licences require attribution of authorship. More interestingly, there is a tension between social norms developed in free software communities and those that have emerged in the creative arts over integrity and commercial exploitation. For programmers interested in free software, licence terms that prohibit commercial use or modification are almost completely inconsistent with the ideological and utilitarian values that underpin the movement. For those in the creative industries, on the other hand, non-commercial terms and, to a lesser extent, terms that prohibit all but verbatim distribution continue to play an extremely important role in the sharing of copyright material. While prohibitions on commercial use often serve an economic imperative, there is also a certain personal interest for many creators in avoiding harmful exploitation of their expression – an interest that has sometimes been recognised as forming a component of the moral right of integrity.

One particular continental moral right – the right of withdrawal – is present neither in Australian law or in any of the common open content licences. Despite some marked differences, both free software and free culture participants are using contractual methods to articulate the norms of permissible sharing. Legal enforcement is rare and often prohibitively expensive, and the various communities accordingly rely upon shared understandings of acceptable behaviour. The licences that are commonly used represent a formalised expression of these community norms and provide the theoretically enforceable legal baseline that lends them legitimacy. The core terms of these licences are designed primarily to alleviate risk in sharing and minimise transaction costs in sharing and using copyright expression.

Importantly, however, the range of available licences reflect different optional balances in the norms of creating and sharing material. Generally, it is possible to see that, stemming particularly from the US, open content licences are fundamentally important in providing a set of normatively accepted copyright balances that reflect the interests sought to be protected through moral rights regimes.

As the cost of creation, distribution, storage, and processing of expression continues to fall towards zero, there are increasing incentives to adopt open content licences to facilitate wide distribution and reuse of creative expression. Thinking of these protocols not only as reducing transaction costs but of setting normative principles of participation assists in conceptualising the role of open content licences and the continuing tensions that permeate modern copyright law.

Tensions Between the Rule of Law and Graduated Response Schemes

The recent iiNet decision highlights an important tension in copyright law over the role of intermediaries in responding to what is seen as a crisis in rates of online infringement. Recent legislative developments in the UK, New Zealand, and France seek to require ISPs to terminate the accounts of subscribers suspected of infringing copyright on a number of occasions. The iiNet decision at first instance suggests that such a scheme cannot easily be implied as part of Australian authorisation liability and that a legislative scheme will likely be required if one is to be introduced.

The recent decision of the French Constitutional Council on the first iteration of a French graduated response scheme highlights fundamental rule of law concerns with the creation of an extra-judicial punitive regime designed to curb rates of copyright infringement. The desire to reduce the costs of copyright enforcement is problematic when considered against the requirements of due process, predictability, and transparency expected in liberal democratic theory. The crisis-management based goals of such schemes can also be difficult to reconcile with requirements of proportionality in the enforcement of legal rights. These problems compound with the increasing recognition that internet access is fundamentally important to all aspects of participation in society.

This paper examines these tensions and seeks to identify whether a scheme based upon the termination of internet access of households or individuals found to have infringed copyright can be compatible with rule of law theory. At a minimum, such a scheme is likely to require significantly more judicial oversight than has been proposed by the applicant-appellants in the iiNet litigation. Whether it is possible to decrease enforcement costs without unduly sacrificing due process is likely to be an ongoing debate over the immediate future.

This article comes from a core chapter of my PhD and will be published in the Berkeley Technology Law Journal. You can view the pre-print here: The Role of the Rule of Law in Virtual Communities (forthcoming BTLJ 2011) (PDF).

There is a severe tendency in cyberlaw theory to delegitimize state intervention in the governance of virtual communities. Much of the existing theory makes one of two fundamental flawed assumptions: that communities will always be best governed without the intervention of the state; or that the territorial state can best encourage the development of communities by creating enforceable property rights and allowing the market to resolve any disputes. These assumptions do not ascribe sufficient weight to the value-laden support that the territorial state always provides to private governance regimes, the inefficiencies that will tend to limit the development utopian communities, and the continued role of the territorial state in limiting autonomy in accordance with communal values.

In order to overcome these deterministic assumptions, this article provides a framework based upon the values of the rule of law through which to conceptualise the legitimacy of the private exercise of power in virtual communities. The rule of law provides a constitutional discourse that assists in considering appropriate limits on the exercise of private power. I argue that the private contractual framework that is used to govern relations in virtual communities ought to be informed by the values of the rule of law in order to more appropriately address the governance tensions that permeate these spaces. These values suggest three main limits to the exercise of private power: that governance is limited by community rules and that the scope of autonomy is limited by the substantive values of the territorial state; that private contractual rules should be general, equal, and certain; and that, most importantly, internal norms be predicated upon the consent of participants.