The argument for an electronic silk road, promoting free trade and by extension, harmonious global values and laws, is an inherently appealing idea to all digital natives used to an ‘open web’ experience. Dr Anupam Chander, himself a product of parents who migrated from India to the US in search of a better life, expertly lays bare the changes in global trade patterns – and the resulting complications – in his book ‘The Electronic Silk Road: How the Web Binds the World Together in Commerce,’ released in 2014 in South Asia. Aside from the easy narrative exploring complicated developments, Chander’s book is especially pertinent for an Indian audience, looking to profit off this free trade, often without reading the fine print.
The promise of Trade 2.0 is enormous, begins Chander, but he quickly delves into the real world complications that arise out of these new exchanges. Unlike with goods trade, where a well-defined port of entry and exit serves as points for regulation and new jurisdictions, digital exchanges of services, prove to be far trickier. He raises a metaphysical question: where does an event in cyberspace occur? Simply put, whose jurisdiction extends to these digital transactions – the region where the company providing the services is registered, or the region where these services are consumed?
The real-life examples of the ‘pirates of cyberspace’ are easier understood. For example, the gambling sites operating out of Antigua, where it is legal, were sorely contested in the USA, where, for the most part gambling is illegal. This particular case went to the WTO where the gambling sites argued that they were simply providing entertainment services while the US argued that this sort of activity would promote fraud, money laundering and underage gambling. The WTO sided with the US. Another case, familiar to most young people, is of the file-sharing site, The Pirate Bay, which is under constant legal threat from copyright holders because of the “illegal” downloading of materials that include movies and music. The founders have even been convicted of copyright infringement under Swedish law, and have since moved their domain name from .org to the Swedish address .se to avoid the risk of seizure of their domain name by the US authorities.
This move too, speaks to the parallel jurisdictions that exist in cyberspace, complicating its ‘free flow.’ In fact, the domain name system is described by Chander as ‘choke point’ in an essentially end-to-end system. What this means is that the body that sets rule for domain names, Internet Corporation for Assigned Names and Numbers, ICANN, can function as an otherwise elusive chokepoint for domain registries such as .com, .net and others. However, this privately held body has so far only chosen to apply its authority on behalf of trademark holders. The recent bitter fights over who would be granted the domain of .vine and .wine saw France lash out against ICANN, and India too expressed its concerns at private companies being awarded domains like .indian and .ram, for fear they could be misused. Another ‘choke point’ is the root server, which serves as the registry for domain names. Who maintains these is a pertinent question. For example, VeriSign maintains the .com and .net root servers, and is based in Virginia, USA. Therefore, that is where its jurisdiction lies. More recently, some root servers have been distributed across multiple jurisdictions, making it harder to locate and attack. However, keeping these root servers under one authority such as ICANN is seen as crucial to many, as it allows web users based in different countries to ‘talk’ to each other. While countries can create a parallel internet system, as China and Russia have done, it would mean that users across the world would have to modify their computers to point to the alternative DNS rather than ICANN DNS. This is seen as a serious affront to the seamless nature of the current, dominant, internet experience.
Ultimately, the book is an examination of trade and law, and its new avatars in the cyber realm. A new global division of labour – where US legal documents are being prepped by lawyers based in India, and phone calls to big American companies are being answered by Filipino workers – also means countries will display protectionist behavior. For example, in the light of increasing medical images review (including radiology)moving from the US workforce to India, the US Congress restricted Medicare reimbursements for services that were subcontracted to providers located outside the country. This dichotomy between wanting free trade but protecting ones country from the same has come up during Trade 1.0 and continues to be a theme in Trade 2.0
Chander also flags newer scenarios that are emerging. For example, ‘cloud computing’ is essentially the act of ‘moving a computer service to remote computers, typically with the user both largely unaware of the jurisdiction or jurisdictions from which the service is actually supplied.’ This is important. For companies such as Google, the cloud exists across various techno-legal-economic jurisdictions, which he fears could become a ‘legal black hole’.
The legal aspects of this new silk road,and how they should be shaped, form the crux of Chander’s book. After going into some detail about one of the biggest companies to exist thanks to the internet – cheekily called Facebookistan due to its billion citizens – Chander quotes founder Mark Zuckerberg acknowledging its special role: “We exist at the intersection of technology and social issues.” But what has this meant? Differing privacy standards across the world, where facial recognition features might not be welcome in some regions as they are in others; differing free speech environments where governments might want to step in to censor content their believe is inflammatory; and different regulatory climate with some states moving to tax Facebook on its growing advertising revenues.
What does this lead up to? A few steps are outlined by Chanderto ensure trade across cyberspace remains ‘free’. The first is legal glocalization – where sites are localized to conform to varying rules in different jurisdictions. However, Chandertempers this suggestion, warning that excessive interventions will hamper the worldwide nature of the web. This scenario harks back to an earlier question – whose law applies? The choices here are the following: country of origin; country of reception; UN or a treaty-based law; self-regulation by the private companies involved and finally, user-based regulation. There are problems with each scenario. The country of origin suggestion might spark what is called a ‘race to the bottom’ with companies trying to register themselves in places with minimal regulation. An international treaty seems difficult, given that speech, privacy, defamation and a few other concepts are difficult to create consensus around. The country of reception principle would make it very difficult for corporates trying to enter many different markets, and both regulation by users and/or the companies themselves might lead to problems later, given that consumers often lack knowledge about the services they use. All these problems lead Chander to suggest adopting the principle of ‘harmonization’ where one should imagine a regulatory ‘race to the top’; with regulatory competition among countries leading to a global welfare-maximizing ideal. This, coupled with companies abiding by the ‘do-no-wrong’ principle – for example, not assisting authoritarian regimes to suppress free speech and human rights –would help countries across the world reach their goal to manage overlapping jurisdictional authority. Courts could decide on applicable jurisdiction according to the state with the closest connection to the dispute. The creation of international standards and the increasing difficulty of enforcing differences would, according to Chander, encourage the emergence of global best practices.
Chander’s book is a knowledgeable and a timely intervention in a world increasingly relying on the information society to move it forward. India too, speaks the language of ‘Digital India’ and everywhere one looks e-commerce websites are capturing the public imagination. Start-ups are the order of the day; complementing the already established IT services industries. Global commerce is changing the world, and the internet is now termed a ‘global commons’ – it has achieved as much importance as the seas and space! In this scenario, some of India’s own unique problems in this domain are addressed by this book: that of jurisdiction over transnational data flows. In the past, Indian ministers have offered the opinion that jurisdiction should extent to the country of reception. Currently, India is exploring the idea that data flows originating and ending in one jurisdiction should only be routed through that country, and not through international servers. This does not address the problem of jurisdiction of international data flows, but it is a start. Further, India believes that the routing of internet traffic and their numbering need not be carried out by a private body such as ICANN, but that the role can be shared by governments under bodies such as the International Telecommunications Union. These are suggestions on the table, but strike at the heart of the debates being carried out about the future of the internet – which is also the future of international trade.
There is only one weak point in the book. Chander wonders if international trade law could encourage political freedom around the world. Human rights in cyberspace do end up in debates about not the production, but the consumption of knowledge. Many in the West want the internet to adopt common values of free expression. Yet, this can often be the point of departure for many countries. Some are authoritarian and want to impose censorship. Others, and India can fall into that category, is not interested in foreign elements dictating national policy. This is the reason why foreign funded bodies often come under the scanner in India. The argument is tricky, and opens up more questions than what this book seeks to answer.
Ultimately, Chander’s informative book engages the reader. It is recommended for those who want to peek into the nuts and bolts of the internet, understand the application of the law that guides it, and finally, follow the smell of money!
The author heads the Cyber and Media Initiative at the Observer Research Foundation.