New hybrid regulatory frameworks for the Internet Henry

New hybrid regulatory frameworks for the Internet Henry H. Perritt, Jr. Dean Chicago-Kent College of Law Illinois Institute of Technology

Why does the Internet present new challenges? • Low economic barriers to entry proportionally more small enterprises • Lower transaction costs more smallvalue transactions • Inherently global exposure stress on traditional geographic jurisdictional criteria

What’s wrong with traditional public law regulation? • High transaction costs (uncertainty, remote legal systems) threaten to swamp value of transactions • Remote actors undermine enforcement ability • Diversity of requirements difficult to satisfy

What’s wrong with pure private self-regulation? • Disparate economic power threatens consumer rights • Race to the bottom undermines mandatory rules • Private governments not accountable

What are the alternatives? • • Tolerate diverse legal requirements Comprehensive treaties Tolerate “lawlessness” Develop new hybrid public/private regimes

Hybrid frameworks • Public law – Minimum substantive requirements – Backup compliance policing • Private law – Prescribe detailed rules – Provide first-level enforcement and dispute resolution

Examples • EC/USG data privacy “safe harbor” negotiations • ICANN • Credit card chargebacks

Prospects for the future • Harmonization reduces jurisdictional pressure – OECD privacy guidelines – OECD consumer protection guidelines • Consumer protection the next big opportunity • Dispute resolution approaches – Credit card chargebacks – OECD paper – Ebay escrow, insurance possibilities