|Issue No 111||14 September 2001|
3.2 The Electronic Consumerist
In their latest instalment Peter Lewis and Michael Gadiel ask how effective has the law become in safeguarding the things that really matter to us?
Western law has come a long way. From the system of rules developed in Europe through the Middle Ages to safeguard the things deemed important at the time - personal property and protection of the moral health of the nascent society - the law has evolved into a beast that permeates nearly every aspect of our lives. Our leaders set laws, the state enforces them and the courts dispense them, all in the name of justice.
Yet how effective has the law become in safeguarding the things that really matter to us?. As prison populations grow, criminologists cast doubt over the effectiveness of criminal law in reducing crime levels. Property rights become increasingly blurred as the property ceases to be concrete chattels and become instead ideas and information that swirl around the collective consciousness. All the while the top end of town hire the best legal brains money can buy to skate around the corporate rules and tax regulations that are meant to keep those bastards honest. And with information technologies blowing the notion of national sovereignty out of the water, the traditional legal system is, sidelined as an anachronistic vestige of the great nation states of the Industrial Age.
What if our positivist legal heritage - that there can be a right and wrong determined by an objective evaluation of the truth by an independent party - is no longer the most appropriate vehicle for dispensing justice? Isn't the legal system, yet another hierarchy that must inevitably flatten out under the weight of the Information Economy? Can we defend it? Should we? And if it does collapse, what takes it place?
Fade To Grey - Democratising The Law
The law, at its essence, is a way of dealing with a vast array of subjective facts and coming up with an objective truth. That theory is now under challenge because it assumes that these principles that underlie our system are stable, so that in every situation there is always an objective right and a wrong. What it misses is all sorts of shades of grey that blur those rights and wrongs and cast doubts over the ability of any one party to determine who's right and who's wrong.
These are questions of jurisprudence. But they are also questions of politics. We are currently seeing a dissatisfaction - not quite a rejection - but a dissatisfaction with the idea that one person or one panel - generally, male, white, older, can make an objective decision that should bind us all. You see the dissatisfaction in everything from the tabloid newspapers' treatment of law and order issues to the perception that corporations are free to evade tax. There is a feeling that the courts and judges are not the representatives of some higher authority but are themselves subject to all of their own constructions of the world; their own biases - and that's what they apply when they purport to apply the law.
What we are now seeing is a yearning to place justice ahead of rules; a democratisation of the law which says that you can have input from a diverse range of perspectives to get the fairest decision rather than relying on a judge or a legislator in Parliament to set out what the law should be.
Law has always been a difficult area to democratise because of the inability of ordinary citizens to get access to the law. There are issues of cost, culture and opportunity that restrict new entrants in the legal field and mean it is still predominantly an old man's world. It's been dominated by conservative forces and set interests for a very long time, but we are finally seeing it being challenged by much more open discussion of law, driven by a broader awareness of legal issues across the population. Legal studies is now being taught in school. People who are involved in litigation are setting up websites and posting all the documents and inviting people to chat about the rights and wrongs of what's happened. And a lot more people are running their own cases rather than having to rely on QCs and expensive lawyers to get things through the court.
Part of this is a reaction to the specialisation of the law. The law has journeyed down the path of specialisation until we have a system that is so tightly compartmentalised that real life situations are reduced down to a series of abstractions that always leave you one step removed from the issue of justice, fighting over nuances and technicalities. And the law has become so different in each country, that a simple case of, say, insurance fraud in one jurisdiction, might not even fit the definition of insurance in another jurisdiction. Whereas underneath that there is a general principle of fairness in any insurance contract which can be applied across the board once you get away from some of the procedural and black letter law problems.
The Net provides a new opportunity for people to complain. In the past the courts were the sole avenue to express dissent regarding the actions of an individual, public official, or corporation, After all, what noise could one lone voice make? People have always known when they have been wronged, they just often have trouble fitting it into the technical requirements of the law in Australia, or the USA or the Canary Islands. But they know they have been wronged and they basically know how it could be righted and they just want to take that forward. And there are a lot of new opportunities to do that through internet communities
Legislators are, to an extent, recognising this. Freedom of information law, for example, is a legislative response to the demand from people to get openness and transparency about issues that affect them. So even though you can't use old fashioned property law to sue to make sure your right to access the internet is somehow safeguarded you can often expose unjust practises using other sorts of laws. You can expose what is going on behind the scenes to stop access to your online rights, and that's been shown recently in FOI applications made about ASIO'S Walsh report on what the government might do about cryptography. We are talking about a major new, online right to be able to encrypt your messages and your content, challenged by the government. No actual right is written into our Constitution - we don't have a Bill of Rights for example. But by using Freedom of Information and exposing what the government was planning to do, and using other lobbying tools and using the democratic processes you can ensure that that right is maintained.
Where does this democratisaiton of the law lead? Away from the positivist trade in black letter law to something that combines some very basic written laws - trade practices laws, privacy legislation, FOI - with a recognition of people's rights to pursue issues of justice. The movement is called 'Social Consumerism' and it's tailor-made for network technologies.
Social Consumerism is driven not only through law, but through actions, boycotts, and getting bad publicity for businesses who are doing the wrong thing by consumers. Public space is used to exchange information about what products are good; what products are bad; and who is behaving well and who is behaving poorly, and becoming active. Where in the era of broadcast technology this type of discussion was the preserve of highly-paid marketers and the odd TV current affairs show, with the network technology available it can become a new part of the consumer experience. Imagine, while purchasing goods - either at a real shop or online - having the chance to check out the latest corporate practices of the suppliers?
Social consumerism is seeking to become something other than the law as we know it. People are taking legal principles and legal procedures and using them for new purposes. And instead of being bound by the strict laws of precedent and the strict laws of evidence that we see in court, we are getting back to the basic principles of why we have laws in the first place. That notion of justice - which everyone must define for themselves - and resides in our hearts as much as it resides on a statute book.
There is a tension between pure consumerism, which says I want the product at the lowest price possible and social consumerism. We have seen that in Australia in debates about everything from CD prices to the garment industry. If you just want everything at a lower price you probably aren't worried about sweatshops or the impact on the local industry, or the environmental impact. But if you follow Social Consumerism - you say yes, we want things to be priced efficiently, but we are also expressing an interest in how the good is made; who has a role in making it; how the environment is affected; and how the workers' rights are protected during that process.
Improved communications mean we can - if we want to - take more responsibility for making our decisions about what's just and unjust. It also means we can make our own decisions as consumers based on those judgments. So instead of having a company sued in a court and fined, they may find themselves subject to a consumer boycott campaign which leads to a drop in revenue. And the important thing is that instead of paying the fine and forgetting about the incident, the firm will face the penalty imposed by the community until it changes the abhorrent practice.
And example is the application of Trade Practices Law. Why do we have Trade Practices Law? Because consumers are weak and businesses are powerful and markets aren't perfect. So you take those three principles and you apply them through a whole range of advocacy and activities. You embrace new ways of disseminating information to consumers, and you forget the Evidence Act and the actual procedural requirements for using Trade Practices Law because you can't afford a lawyer anyway. But you use those three basis principles and develop a new form of law which says that businesses can do the wrong thing but here's how we fight back. So you keep the principles of justice in the law but dispose of the black letter application that has defined the law for the last 200 years
The courts are part of the problem. As a consumer, for example, you have got a right not to be misled. But instead of going to court when you are misled, you can use that information and share it through the Internet to build a community of interest amongst people who might also have been misled. You take action against the company, which might not be legal action. It could be as simple as an e-mail campaign or getting them bad press. But you do eventually use the same principles as those informing the law - justice, fairness, equity.
There are consumer watchdog groups gaining in strength, and there's also the role of the popular media. When you get ripped off today, instead of going to a lawyer you can go to A Current Affair. Using the same principle, you get ripped off, you set up a home page - which takes things a step further When people watch A Current Affair they think "Oh gee that company is doing a bad thing." But they just sit on their sofa and don't do anything. If it is done through internet channels the person who sees bad behaviour can react, they can send an e-mail straight away, they can withdraw their services, they can withdraw their accounts, they can join a boycott.
Three Responses from the State
This sort of thinking has obvious implication for the role of the State as legislator, particularly in a world where national boundaries take on increasing insignificance. The States can react in three different ways. The first is that they sit back and hope that this all goes away. And quite a few countries are doing that and they are not changing their legal system - and the legal system will very quickly fall behind, and only apply to offline transactions. (any examples??)
The second way is that they can be scared of the democratisation the internet provides and they can react in quite Draconian ways and set up bans and licensing requirements and very strict legislation on what can and can't be said, distributed, or copied, on the Internet. This is the Howard censorship model - but there are even more hardline examples. If you look at countries like Singapore where a direct link is made between your ability to act as an Internet Service Provider and your compliance with incredibly strict laws. To get an ISP licence - of which there are only three or four in Singapore - you have to promise that you will have strict content control over things like gaming and racing, homosexuality, palmistry - nothing that can bring the Singapore government into disrepute. It's probably completely unrealistic because Singaporeans will find ways to get access to content that goes beyond what the government expects them to see.
The third way is for States to see that the Internet is something different, in that it is an international community, and that the best thing that they could do is act as intermediaries - negotiators on behalf of their citizens - in all of the international fora - like the United Nations, the World Trade Organisation, and the OECD, etc., that are trying to promote internet trade, consumer protection, privacy protection. And the best thing the government can do is say well, we will give up on our national borders to the extent that we agree with what is happening on the international stage and we will go and fight on behalf of our Australian consumers for good privacy protections, good consumer protections; good freedoms in these international fora, which will be the real guardians of how behaviour is conducted on the internet.
This is not an argument for a pure laissez faire approach, it's more an argument for coordinated regulation on an international basis, coordination of the things which the internet community want. And this is where we see a real conflict because governments aren't very good at listening to what the internet community wants. It's a challenge to government to think long-term and put the interests of net users first, even where these are in conflict with traditional policy priorities. Users demand privacy for instance, whereas government interests might lie in providing wanting law enforcement agencies access to people's e-mail content. Whose interests should be put first? If they promote the latter, they may end up catching a few criminals, but they'll block people using the Net in ways that add to the nation's broader prosperity.
The best way to ensure that the internet thrives and that communities can find their own way through what needs to be regulated and what doesn't is for governments to have a role of listening and negotiating international agreements on what can and can't be done. There is a real problem when governments think that they know best and place their old fashioned interests like law enforcement and security and intelligence at the front of their thinking and push those agendas rather than listening and reflecting the agenda of the internet community.
Of course there is another party in this game, the big corporations that are trying to harness the information revolution to maximise their profit. Where do they fit into the equation? Initially as a threat to the internet community, because they're interests are so at odds. We currently have the opportunity for something new to emerge from the Internet - something new in terms of a community of equality - where you have all got the ability to participate and have access to influence policy and decision making - to have your say to exercise your various freedoms. But just as this has emerged with the potential to really blossom, the commercialisation of the internet has intervened.
This raises the spectre of a rich and a poor internet community, excluding those who can't afford access - determining that the internet should really be about shopping and investment advice and things which are of benefit to business, rather than a free flow of information which is of benefit to consumers. We are currently watching business commoditising a whole range of information on the internet which has been free and which has been accessible, into information which can be packaged and sold and targeted just to those people who will be profitable consumers for business.
Secondly, business is becoming the vehicle for government to regulate the internet in the way that government would like. So that commerce on the internet should be taxable; speech on the internet should be controlled through various broadcast points to meet government licensing requirements. And we will get back into the old fashioned model of media being in a way controlled by government and certainly heavily influenced by government.
So they are the two initial roles of business, and the third one which they will always promote but which perhaps we need to be more cynical about is that business has the opportunity to innovate and develop new ways of accessing the information and new ways of people on the internet meeting each other and talking to each other and communicating. That was happening anyway, without the commercialisation of the internet. It was developing very fast and of course there were just a lot of bright individuals on the internet who were interested in communication and were finding ways to go forward and a lot of it was driven out of universities rather than out of big business.
Through The Consumerist Prism
There are specific legal issues that are emerging which appear confusing when looked at in the old compartmentalised manner. Lawyers may see censorship, privacy, secondary boycotts as new areas of the law to master; through the consumerist prism they are merely vehicles for ensuring individuals get a fair go in the virtual world.
Censorship, for instance, is an issue which under the traditional model would be administered by the government. It would either decide for itself what is best for its citizens to see or hear - or would pass this task off to a supposedly independent third party, like the Office of Film and Literature Classification. They would have the task of prescribing how any information might be described to the public, so that the public could decide for themselves; or in extreme cases, ban material from public display
Through the prism of democratisation of information and the democratisation of the law you would start with basic principles, which might get back to a freedom to see and hear and disseminate whatever information you want, but also the ability to be informed about what information you might be about to see and hear and be able to at least be empowered to take steps yourself to choose whether or not to use that information.
This is the model that's emerging for the Internet, because central censorship authorities are unable to control the vast array of information available on the internet without chopping off at some point, access to the internet itself. The Australian model of content regulation in the online world is a fairly half-hearted attempt to apply this traditional model to the internet with the full expectation that it won't work in practice. Consumers are already empowered to make decisions about what information they want to see and hear, but most of the technical ways of cutting off access to information are just too blunt. They are not sophisticated enough for the internet community that has emerged. The resources and time and effort spent on that regulation could have been better spent on education and for general dissemination of information.
Censorship is one of those issues, where, at the international level, there might be some things that could be done to promote education about the fact that all sorts of information is out there on the internet, and the fact that consumers need to take care. But there is unlikely to be anything that an individual country can do. If Australia seriously wanted to promote its interests it would have listened to the internet community and promoted those interests on the international stage and in international negotiations, rather than trying to go out on its own and set up a regime that is really just there to please short term political interests.
Sleeping With the Enemy
The government's performance on online privacy is marginally better because it is one of those rare instances where business and consumer interests actually coincide. If electronic commerce privacy can be protected consumers will feel more confident in entering into electronic commerce and that will boost returns for industry. The problem is that industry wants to have its cake and eat it, in that they want to tell consumers that your privacy is safe - that you can shop at our online mall and we won't sell your information without your consent - but at the same time they quite like the idea of downloading a small, non-intrusive program onto your computer, just to monitor where you go during your time in their shopping mall, and perhaps keep that information without letting you know about it.
Privacy will win out in the end on the internet because those companies who protect privacy legitimately and who offer consumers the protection and confidence that consumers keep saying that they want will be the companies that succeed. People wil go to sites where they can trust their information won't be mishandled. Those firms will become so successful that privacy will be seen as a winner on the internet.
So the ball is in the consumers' court.
The formal law, probably has a role in helping to formalise the standards consumers want in a clear code. But instead of enforcing that law in court, compliance with the law becomes a marketing plus for the web sites that comply with it. Sites that meet the legal standards might display a logo saying that this is privacy compliant. Or all ".au" sites might be covered by Australian privacy law that is recognised world wide - giving local sites a market advantage over competitors. Or there might be an international privacy regime. There are currently guidelines which are voluntary. In the future they might be tightened up - because both consumers and businesses demand it.
Unfortunately there are a lot of other areas of law where it is not so clear that consumers will get a win. A good example is access to information and services on the internet for people with disabilities. It's open for countries to say that under our discrimination laws your web information should be accessible to people from diverse backgrounds with a range of abilities and disabilities. And certainly in Australia we do have that law, but whether that will be carried through onto the internet for a range of government and commercial web services is less clear.
Because those people will, by definition, be in a minority, they won't have access to the consumer and market power that an issue like privacy has. Businesses will either do the absolute minimum required by law or simply break the law and risk the wrath of some consumers and throw up a whole lot of procedural and jurisdictional problems for anyone who does complain. It's an area where perhaps consumer interests and the internet community need to move from being passive and thinking - oh well that doesn't affect me because I don't have a disability - to being quite proactive and becoming advocates on behalf of all net consumers before we do end up with that situation of having internet abled and internet disabled
Getting the Ground Rules Right
The law does retain an important role in setting up a framework that will allow people to take the sort of action we have been talking about. Unfortunately, the Australian Government seems to be going in the opposite direction. Secondary boycott laws, for instance, prohibit trade unions from calling for consumer boycotts of corporations. Firms that are targeted can actually take action to recover their losses against the union calling for the boycott. In an era where the tools are there to disseminate information, it seems the government is trying to nip this sort of action in the bud.
The actual written laws that we have in a country like Australia - and it's worse in the US - appear to damage consumer rights rather than promote them. In Australia we have watered down a lot of our consumer laws and trade practices laws and we still don't have best practice privacy legislation for the private sector. We've got antiquated laws on things like cryptography, so even if you try to get those laws reformed, it is incredibly difficult and might be a waste of time.
The other way to go is to leapfrog the bad laws and turn to promoting consumer initiatives which can happen with or without the law in place. With secondary boycotts, for instance, it may be that a trade union is unable to promote to its members a boycott of products based on some bad behaviour by the business, but that a third party with common interests, some of whom may or may not be trade union members, can promote such boycotts and can disseminate that information through the Internet, the media or at a more local level. The Transport Workers uUnion, for instance, has established Concerned fFamilies of Australian Truckies to run these sorts of campaigns. Likewise, techers unions are forming stronger alliances with parents and citizens associations.
What the Internet Means
There are elements of internet which might become quite important because it gives any individual an opportunity to express an opinion. The idea of being able to put a virtual post-it note on any web site, for instance, and provide personal feedback on whether that was a good site, or whether you are being ripped off there or whether there was a breach of privacy, not only allows individuals to speak up, but promotes a culture of inquiry as other people go and look for those post-it notes. We won't have to wait for front page stories in the newspaper about a bad product. We won't need people like trade unions to go to a huge amount of trouble to issue press releases about the working conditions behind big sports companies making running shoes. Individuals will be able to do that just as well.
The model of social consumerism sees the internet as doing more than just providing a new means of communication. It sees network technologies as actually providing a new culture of people becoming interested in that sort of information. Rather than just shopping blindly they will actually take an interest in the story behind what they buy. Partly this is a response to a few people and a few key organisations getting out there and promoting those sort of ideas. But part of it is a general cultural shift to - not just noting that information is easily available - but that reading such information is the right thing to do. It actually makes sense for consumers to take an interest in the background behind what it is that they buy, because it will, in the long term effect them too.
This chapter is based on a conversation with Chris Connolly a lawyer and consumer advocate who runs the Financial Services Consumer Policy Centre
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