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I Introduction

From: Private International Law Online: Internet Regulation and Civil Liability in the EU

Tobias Lutzi

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 20 September 2021

(p. 1) Introduction

1.01  Every year on April Fools’ day, the social news website reddit adds a new temporary feature that users can interact with as a social experiment. In 2017, this experiment took the form of a 1000 × 1000-pixel canvas (called ‘r/place’) that any user could edit by changing the colour of a single pixel every five minutes. When the feature was shut down seventy-two hours later, more than 1 million unique users had made around 16 million edits to the canvas. And while most users had originally attempted to draw something of their own, they had been quick to organize and channel their efforts, working together to create country flags, logos, pictures, text, a Windows 95 taskbar, a ‘rainbow road’ that crossed the entire canvas, and a copy of the Mona Lisa’.1

1.02  The experiment has been celebrated as ‘a testament to the internet’s ability to collaborate’,2 capturing it ‘in all its wonderful and horrific glory’.3 It powerfully demonstrated the Internet’s ability to foster creativity and enable cooperation. It also illustrated how communities form, overlap, and interact in a globalized world. The canvas quickly became populated by myriad different groups, each claiming their own little piece of real estate, inevitably resulting in territorial disputes—and sometimes, amicable resolution. The area where the French and German flag intersected, for instance, was strongly disputed until the two groups agreed to join their efforts and create a European flag instead, complete with a peace dove. But only some of the groups involved represented countries; the majority of them were connected through some other shared interest, and users were free to contribute to any number of them, independently of their individual degree of affiliation. The experiment highlighted a concept of community that is diverse, fluid, independent from physical borders, self-governed, and intrinsically linked to the Internet.

(p. 2) 1.03  Over the last three decades, the Internet has not only changed our understanding of community. It has permeated, if not revolutionized, almost every aspect of society—from family life to international business, from journalism to academia, from the concept of privacy to how we form friendships, professional relations, and communities. While many of these changes may be attributed to an even wider trend of ‘digitalization’, the Internet and its ability to connect information, and therefore people, all around the world with ever-increasing seamlessness appears to be the main catalyst for virtually all of them. As Manuel Castells explains, ‘[t]he Internet is the decisive technology of the Information Age, as the electrical engine was the vector of technological transformation of the Industrial Age’.4

1.04  At the same time, the Internet itself has evolved, too. After two decades of rapid change, many scholars are describing the current phase in its history as one of consolidation.5 Accordingly, it may not be a bad point in time to ask the question of whether the law, and private international law in particular, has caught up with the technological development and the resulting societal change.

1.05  From early on, the Internet has attracted the attention of legal scholars and practitioners, including those focusing on private international law, who started asking questions as to the adequate legal framework for a means of communication that allows for the dissemination of content at unprecedented speed and without any regard for physical borders. While many of the first cases raising questions of private international law involved claims of defamation, other areas quickly became subject to international litigation as well, requiring courts to apply traditional rules and connecting factors relying on physical connections to a virtual medium that does not create any such connections. As Internet cases quickly became a more and more regular occurrence, courts were confronted with additional challenges, such as a rapidly growing number of connected devices, a disappearing line between offline and online activities, and the emergence of new private actors who are holding considerable regulatory power over the online platforms and services they offer. In the future, they will also have to find answers to new phenomena such as completely decentralized networks operating distributed ledgers that use cryptography as a means to record transactions permanently.

1.06  Despite the ever-changing shape of these challenges, certain elements appear to be present in virtually every legal problem that the Internet raises. This book will focus on these elements. It will discuss how certain characteristics of online communication raise fundamental challenges for private international law and the appropriateness of the existing solutions using the private international law of the European Union as its main example and testing ground.

(p. 3) 1.07  At the same time, the book will link this discussion to the wider debate about the role of private international law in a globalized world. Do phenomena like the ever-increasing mobility of people, goods, and information or the growing competition between regulators, including between public and private regulators, leave the discipline completely out of its depth, or do they constitute challenges to which private international law holds particularly promising answers? By sketching out how private international law might effectively accommodate many of the challenges encountered in Internet cases this book will attempt to make an argument for the latter proposition.

1.08  This first chapter will outline the aforementioned debate about the perceived difficulties of private international law to react adequately to the challenges of a globalized world and explain why the Internet qualifies as one of these challenges (section A). It will then attempt to explain the individual elements of its title, including some of the limitations of the book’s scope to which it alludes (section B), before providing a short overview over the remaining chapters and core arguments of this book (section C).

A.  Private International Law, Globalization, and the Internet

1.09  For at least a decade, scholars of private international law have deplored the discipline’s absence from many debates about law and globalization6 and its inability to accommodate the challenges arising in this context adequately:

Despite the extent of social, technological, economic, and geo-political changes wrought by globalization, little has been done within the field to think through the issues arising from the decline of territory, the financiarization of the economy, the privatization of adjudication, changing cultures of human rights, or new understandings of the rule of law, nor indeed to link these questions to wider changes in world visions or politics, to current trends in political philosophy or social theory, or to new thinking in economics.7

The perceived silence of private international law vis-à-vis these questions has been attributed to its alleged methodological neutrality and self-imposed isolation from politics.8

1.10  While other authors have challenged this view,9 it is undeniable that methods and concepts of private international law do not play a major role in contemporary political debates about how the law might react to the challenges of a globalized world. A rapid (p. 4) growth in international transactions and cross-border contacts and an unprecedented plurality of norms and regulators may implicate mechanisms of private international law, but their potential for the governance of these phenomena is rarely brought up in any wider debate, among lawyers or otherwise.

1.11  The Internet seems to provide a particularly fitting example for the challenges presented by globalization, facilitating the exchange of information, goods, and services across geographical borders and promoting new forms of communities and private, decentralized governance.10 In its early days, it was argued that the Internet could not be captured by traditional legal techniques, including those of private international law, and that the vacuum left by them would be filled by a new ‘common law of cyberspace’:

[A]s this cyber common law of cyberspace develops, and earns the respect of other jurisdictions, it will be easier for . . . other jurisdictions simply to defer to this law. The alternative is a revival of conflicts of law; but conflicts of law is dead—killed by a realism intended to save it. And without a usable body of law to deploy against it, a law of cyberspace will emerge as the simpler way to resolve the inevitable, and repeated, conflicts that cyberspace will raise.11

1.12  But states were not happy to let such a ‘cyber law’ evolve and, instead, were quick to re-impose their regulatory authority on cyberspace,12 creating a patchwork of national and supranational legislation addressing a plethora of aspects of online life. The aforementioned conflicts have not disappeared; indeed, with the emergence of increasingly pervasive online platforms hosted by private companies who exercise many of the regulatory functions that traditionally belonged to the state, they have, if anything, multiplied. As far as they affect cross-borders relationships between private parties, private international law provides the tools to resolve them.

1.13  Although this book will show that rules and mechanisms of private international law have thus far—at least partially—failed adequately to resolve these conflicts, it will argue that they are capable of doing so. It will try to identify ways in which traditional, technical rules of private international law can effectively coordinate the different claims to regulatory authority involved in Internet cases and bridge the gap between the global Internet and local laws. If private international law is indeed ‘dead’13 or ‘on its deathbed’,14 then this book will make an argument for its reanimation.

(p. 5) B.  The Title of this Book

1.14  Virtually all elements of this book’s title—Private International Law Online: Internet Regulation and Civil Liability in the EU—merit some clarification.

1.15  Private international law—or the conflict of laws, as the discipline is regularly referred to in the common-law world15—will be understood in a broad sense, encompassing questions of both international jurisdiction and choice of law. While the English rules on private international law are, in many areas, dominated by the former,16 other legal systems put a stronger emphasis on the latter. Both areas have also been subject to important EU instruments.17

1.16  Regulation means ‘to change or maintain something by law’.18 In this book, the term will be used to describe the promotion of political aims through law and legislation, independently of whether these aims are promoted directly, through specific legal norms, or indirectly, through the coordination of systems of direct regulation (‘meta-regulation’).19 As the book will discuss how such political aims can be promoted by private international law, the emphasis will inevitably be on the latter dimension.20

1.17  In terms of its subject matter, the book will unsurprisingly focus on the Internet. Technically speaking, this term—which will be used interchangeably with the word ‘online’ where grammatically appropriate—refers to a network of different smaller computer networks and services that all use the Internet Protocol Suite (TCP/IP).21 This book will focus on those of these services that use the Hypertext Transfer Protocol (HTTP) and form the so-called World Wide Web, which was instrumental in the Internet’s rapid growth over the last three decades22 and seems to raise most of the practically relevant legal problems. This is not to say that the arguments made therein cannot be extended to other protocols and technologies where they raise similar challenges.

1.18  By making it easier than ever to form legal relations across national borders, the Internet raises challenges for private international law. Most, if not all of these challenges fall substantively into the remit of what is commonly understood as the law of (p. 6) obligations. In order to understand these challenges, and to find appropriate answers to them, this book will analyse and critically discuss the legal framework of civil liability for Internet activities in the European Union.

1.19  There are a number of reasons for this focus on the EU. Over the last two decades, the European legislator has made considerable efforts to create a harmonized framework of private international law within the Single Market; at the same time, the European Union has become more and more active in trying to solve problems created by the Internet through specific legal instruments and, more recently, started to discuss how these problems could be addressed more comprehensively. In both areas, efforts by the European Union are having a growing influence on legislation, case law, and academic debate, both in the member states and in other parts of the world.

1.20  This focus conveniently allows the book to rely on a particularly helpful term, which is used in a number of EU instruments, to define the activities on which it will focus: information society services.23 According to Directive 98/48/EC,24 which first introduced the term and maintained it through its numerous modifications,25 an ‘information society service’ is ‘any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’. The term is most prominently being used in the e-Commerce Directive,26 which specifies that

[i]nformation society services span a wide range of economic activities which take place on-line; . . . [they] are not solely restricted to services giving rise to on-line contracting but also, in so far as they represent an economic activity, extend to services which are not remunerated by those who receive them, such as those offering on-line information or commercial communications, or those providing tools allowing for search, access and retrieval of data; [they] also include services consisting of the transmission of information via a communication network, in providing access to a communication network or in hosting information provided by a recipient of the service.27

Unless otherwise specified, this broad definition will be used to designate the different kinds of online activities discussed in this book, and those who engage in these activities. As this book focuses on the different legal relationship that form through these services, its scope will not be limited to the providers who offer them28 but will focus just as much on those who use these services.29

(p. 7) C.  Overview

1.21  This book aims to discuss how private international law can most effectively address the challenges raised by the Internet for different areas of private law, linking this question to the broader debate about the potential of private international law to resolve conflicts of regulatory authority in a globalized world. It will do so in four steps.

1.22  Chapter II of the book will explain why the Internet raises such significant challenges for private law, and private international law in particular. Chapter II.A will retrace how, in the early days of the Internet, national legislators were happy to leave the new medium largely self-regulated but have quickly started to recognize the medium’s unprecedented economic and societal potential and have since taken a much more active approach to its regulation. The chapter will explain how this historical background still shapes contemporary debates about the respective roles of national regulators and private stakeholders on the Internet, before presenting the types of instruments that shape the current legal framework of liability for online activities. Considerations of private international law, it will turn out, have so far not played a major role within this framework; if anything, the different substantive instruments enacted by legislators around the world have increased the amount of conflicts that private international law is supposed to solve.

1.23  Against this backdrop, Chapter II.B will identify the two key challenges for private international law with regard to civil liability for online activities: the Internet’s independence from state borders, which drastically increases the number of connections to different countries and, at the same time, noticeably reduces their usefulness; and the prevalence of private ordering, especially on online platforms that are effectively regulated only by their hosts.

1.24  Chapter II.C will then illustrate how both challenges affect different areas of private law, and the law of obligations in particular. The five areas selected—the protection of personality rights, the protection of intellectual property (IP) rights, the prevention of unfair competition, the regulation of agreements, and the protection of structurally weaker contract parties—will be used as examples throughout the book.

1.25  In light of the challenges described in the previous chapter, Chapter III will then discuss the potential of private international law as a tool for regulation. In Chapter III.A, the history of private international law as a potential tool for regulation will be retraced. From the paradigmatically apolitical private international law of Friedrich Carl von Savigny to the openly political approaches that were advocated during the US ‘conflicts revolution’, the degree to which the selection of the competent court(s) and applicable law(s) should be based on political considerations has always occupied a central place in discussions about the shape and ambitions of private international law. Using the distinction between ‘conflicts’ considerations (which add a political dimension to the otherwise apolitical ‘Savignyan’ private international law but do not compromise its neutrality with regard to substantive results) and ‘substantive’ considerations (which (p. 8) openly contradict this neutrality), these different approaches can be conceptualized. The same is true for many of the more recent arguments that have been formulated in light of the perceived inability of private international law adequately to address new challenges arising in the context of globalization, which this section will also introduce.

1.26  In Chapter III.B, this ongoing discussion will then be linked to the particular problem of Internet regulation. It will be argued that the ability of private international law to coordinate regulatory authority both horizontally (between national courts and between domestic laws) and vertically (between public regulators and private parties) has the potential to address both challenges of coordination described in Chapter II.B.

1.27  Chapter IV will discuss to what extent this potential is currently being realized. It will provide a comprehensive overview and critical analysis of the current private international law framework for Internet activities in the European Union.

1.28  Chapter IV.A will introduce the relevant legal instruments and their interpretation by the Court of Justice. Given that the European legislator, although aware of the problems created by new technologies such as the Internet, has decided against including technology-specific rules into the general instruments on private international law, the focus of the section will be on the case law of the Court of Justice. It will describe how the Court has given the general rules on jurisdiction and choice of law for contractual and non-contractual liability a (partly) technology-specific interpretation, which is supplemented by some more specific instruments of substantive harmonization such as the e-Commerce Directive.

1.29  Chapter IV.B will then provide a critical discussion of the resulting legal framework. It will describe how the Court of Justice has repeatedly refused to reduce the overwhelmingly high number of connections that are created by acts of online communication into specific, easily identifiable connecting factors that would make it possible to allocate adjudicative and prescriptive jurisdiction effectively. Arguably driven by a deep-rooted fear of exposing claimants to an unregulated cyberspace, the Court instead attaches significance to all of these connections, creating complex, overlapping mosaics of competent courts and applicable laws, which are problematic for national courts and Internet users alike. The section will illustrate how these mosaics reduce legal certainty, increase liability risks, and impede the ability of national legislators to enforce private law on the Internet.

1.30  In Chapter IV.C, the situation in the European Union will be contrasted with the legal framework in the United States. The section will show how the jurisprudence of the US courts has been driven by similar considerations which have, however, not prevented the latter from adopting a considerably more flexible approach.

1.31  Chapter V will finally bring the threads of the first three chapters together in a proposition for an alternative approach. Chapter V.A will answer some preliminary questions. What should be the aims of an alternative approach? Through what kind of rules can they be reached? How can the interests of the different stakeholders and regulators (p. 9) be brought into balance? By answering these questions, this section will make a case for rules of private international law that focus on what was previously described (in Chapter III.A) as ‘conflicts’ considerations, including, most importantly, the legitimate expectations of the parties of the legal relationship in question.

1.32  On this basis, Chapter V.B will make a proposition for specific rules on jurisdiction and choice of law that could create a coherent legal framework for online activities by combining a country-of-origin default rule with a targeting-based exception for structurally weaker parties. It will argue that this combination would create a fairer balance between the protection of claimants and the legitimate expectations of defendant Internet users. It will also explain how such an approach could be implemented within the existing framework of EU private international law through a new instrument on jurisdiction and choice of law for claims involving information society services, which would however be difficult to extend beyond the relatively harmonized internal market of the European Union.

1.33  This proposition will also serve as a starting point for a discussion, in Chapter V.C, of how the gap between the state-centred rules of private international law and the effective private ordering exercised on online platforms could be bridged, and how the proposed rules might also be further adapted to meet this challenge.

1.34  In Chapter V.D, the final proposal will then be tested against the specific private law problems identified in Chapter II.C.

1.35  As the final chapter of this book, Chapter VI will summarize its core findings and discuss their potential for addressing other contemporary challenges for private international law. First, Chapter VI.A will summarize the central arguments of this book and highlight the potential benefits of a new approach to the private international law of civil liability for Internet activities.

1.36  Chapter VI.B will then identify some broader lines of reasoning, which might be applicable beyond the Internet and underline the potential of private international law to accommodate new challenges without abandoning its traditional commitment to ‘conflicts’ justice and substantive neutrality.(p. 10)

Footnotes:

1  The final canvas can be found at <http://i.redd.it/agcbmqgjn14z.png>. Links to further content, including time lapses and a complete atlas of the canvas, have been compiled by Josh Wardle and Justin Bassett, ‘Looking Back at r/Place’ (redditblog.com, 18 Apr 2017) <http://www.redditblog.com/2017/04/18/place-part-two/> accessed 1 Nov 2019.

2  Mark Serrels, ‘Place Was The Internet, In All Its Glory’ (gizmodo.com, 4 Apr 2017) <http://www.gizmodo.com.au/2017/04/place-was-the-internet-in-all-its-glory/amp> accessed 1 Nov 2019.

3  Anthony Cuthbertson, ‘Reddit Place: The Internet’s Best Experiment Yet’ (newsweek.com, 11 Apr 2017) <newsweek.com/reddit-place-internet-experiment-579049> accessed 1 Nov 2019.

4  Manuel Castells, ‘The Impact of the Internet on Society: A Global Perspective’ in Yochai Benkler and others (eds), 19 Key Essays on How Internet is Changing our Lives (BBVA 2013) 127.

5  The Internet Society, ‘Global Internet Report 2019. Consolidation in the Internet Economy’ (internetsociety.org, 2019) <http://www.future.internetsociety.org/2019/wp-content/uploads/sites/2/2019/04/InternetSociety-GlobalInternetReport-ConsolidationintheInternetEconomy.pdf> accessed 1 Nov 2019, 18–30.

6  See, eg, Horatia Muir Watt, ‘The Relevance of Private International Law to the Global Governance Debate’ in Horatia Muir Watt and Diego P Fernández Arroyo (eds), Private International Law and Global Governance (OUP 2014) 1, 1–4, 16.

7  ibid 2.

8  See ibid 2–3. See also Joel R Paul, ‘The Isolation of Private International Law’ (1988–89) 7 Wisconsin International Law Journal 149, 164–73, and below, [3.04].

9  See, eg, Pierre Mayer, ‘Le phénomène de la coordination des ordres juridiques étatiques en droit privé’ (2007) 327 Recueil des cours 1, [174]–[175]; see also below, ch III n 12.

10  See Paul Schiff Berman, ‘The Globalization of Jurisdiction’ (2002) 151 University of Pennsylvania Law Review 311, 314–18; Andrea Slane, ‘Tales, Techs, and Territories: Private International Law, Globalization, and the Legal Construction of Borderlessness on the Internet’ (2008) 71 Law and Contemporary Problems 129, 129–31.

11  Lawrence Lessig, ‘The Zones of Cyberspace’ (1996) 48 Stanford Law Review 1403, 1409.

12  See Berman (n 10) 315–17.

13  Lessig (n 11) 1409.

14  Uta Kohl, ‘Eggs, Jurisdiction, and the Internet’ (2002) 51 International and Comparative Law Quarterly 555, 557.

15  As to the terminology see Adrian Briggs, Private International Law in English Courts (OUP 2014) [1.39]–[1.41].

16  See Lord Collins and others, Dicey, Morris & Collins. The Conflict of Laws (15th edn, Sweet & Maxwell 2012) [1–004].

17  Most importantly in the context of this book, Regulations Rome I, Rome II, and Brussels Ia.

18  Ned Beale, Heather Bateman, and Katy McAdam, Dictionary of Law (5th edn, A&C Black 2007), ‘regulate’. See also Bettina Lange, ‘Regulation’ in Peter Cane and Joanne Conaghan (eds), The New Oxford Companion to Law (OUP 2008) 996: ‘Regulation refers to legal rules which seek to steer the behaviour of mainly private citizens and companies . . . .’

19  On which see Orly Lobel, ‘New Governance as Regulatory Governance’ in David Levi-Faur (ed), Oxford Handbook of Governance (OUP 2012) 68–71.

20  On the idea of meta-regulation by private international law, see Jacco Bomhoff and Anne Meuwese, ‘The Meta-regulation of Transnational Private Regulation’ (2011) 38 Journal of Law & Society 138, 141–42, 153–55.

21  Darrel Ince, A Dictionary of the Internet (3rd edn, OUP 2013), ‘Internet’.

22  See below, [2.10].

23  See, most recently, Regulation (EU) 2019/1150 of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services, Art 2(2)(a).

24  Directive 98/48/EC amending Directive 98/34/EC laying down a procedure for the provision of information in the field of technical standards and regulations, Art 1(2).

25  See Directive (EU) 2015/1535 of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services, Art 1(1)(b).

26  Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market, Art 2(a).

27  ibid, recital (18).

28  ibid, Art 2(b).

29  The Directive speaks of ‘recipients’: ibid, Art 2(d).