HBLR Online is a portal to timely pieces about recent developments in business law. As an important forum for opinion and scholarship, HBLR Online is designed to be a cutting edge guide to developments in the field of business law. HBLR Online also provides opportunities for student members to develop their own editing and writing skills. Accordingly, HBLR Online will contain pieces by students as well as outside contributors.
Max Stul Oppenheimer†
The internet has spawned two major policy debates: the extent and control of protection of personal data privacy, and the impact and control of interference in public policy, most notably elections.
On the one hand, there is a concern that social media privacy controls are deficient and that personal data is being shared without informed consent, while the increased speed and reduced costs of data processing has enabled aggregating fragments of personal information into detailed personal dossiers.
On the other hand, there is a concern that lack of information about sources of information in social media fosters propagation of false information that can influence elections.
In this article, I argue that proposed solutions to these two problems are incompatible— providing greater protection of personal data will make it more difficult to protect against meddling in elections, while requiring, in effect, censorship of political posts will make it more difficult to respect privacy concerns. I begin in Section II by identifying the common phenomenon that has brought both problems into focus: increased speed and decreased cost of data collection and transfer and how it exacerbates the concerns. I then summarize in Section III the concerns over control of personal data and proposed solutions, focusing in particular on recent problems at Facebook and how they argue in effect for a right to anonymity. In that section I also introduce the constitutional basis for anonymity, found in the First Amendment. I then summarize in Section IV the more recent concerns over the proliferation of false information on social media, focusing in particular on recent problems with election meddling and how they argue against a right to anonymity. In that section I also explore the elusive definition of “truth”, comparing approaches under a sampling of statutes and introduce the limited role that truth plays in determining First Amendment protections. I also explain how identifying the source of information is an important element of distinguishing between fact and fiction and of evaluating the weight to be given to opinion and how anonymity hinders achieving those goals. Finally, I introduce the complication of corporate speech and the impact of recent Supreme Court cases on the rights of corporations. In Section V, I conclude that direct regulation of political speech on social media is unlikely to succeed and propose instead that the solution lies in the First Amendment itself—promotion of more speech.
† Professor, University of Baltimore School of Law; B.S., Princeton University; J.D., Harvard Law School.
Rules for Principles and Principles for Rules: Tools for Crafting Sound Financial Regulation
Heath P. Tarbert†
The fundamental objective for any government agency overseeing financial markets and institutions should be sound regulation. And how we regulate is just as important as what we regulate. Every major financial regulator in the world employs, to varying degrees, two primary methods of regulation: principles-based and rules-based. In this article, I discuss the key advantages of each of these forms of regulation. I also offer some considerations for determining when a principles-based, a rules-based, or hybrid approach to regulation is the most appropriate. That is to say, I outline a number of “rules for principles” and “principles for rules” for achieving sound regulation. Finally, I consider some real-world applications of this framework as applied to our modern and increasingly digital markets.
As the Chairman of the Commodity Futures Trading Commission (CFTC or Commission), my focus will be on the CFTC and its agenda. Among my goals is reinvigorating the CFTC’s primarily principles-based approach to regulation where appropriate. Such an approach can provide enormous flexibility in rulemaking and enable the CFTC—the world’s premier derivatives regulator—to stay ahead of the curve by reacting more quickly to changes in technology and the marketplace. At the same time, I consider the circumstances where a more prescriptive, rules-based approach is preferable. In pursuing this endeavor, I have been able to build on the work and ideas of a number of former CFTC Commissioners and Chairs of diverse backgrounds and political affiliations.
At the outset, I note that in developing this analytic framework and applying it to concrete regulatory initiatives, I have been guided by Aristotle’s maxim on methodology: “Our discussion will be adequate if it has as much clearness as the subject-matter admits of, for precision is not to be sought for alike in all discussions. . . .” Evaluating the factors that lead us to a more principles- based or rules-based regulatory approach is dependent on facts and circumstances that are, by their nature, complex and subject to change. We should therefore resist the urge to demand more certainty from this inquiry than it admits.
† Chairman and Chief Executive, Commodity Futures Trading Commission. The opinions, analyses, and conclusions expressed in this Article are mine and do not necessarily reflect the views of other Commissioners or the Commission itself.
Human Rights Rhetoric in Global Internet Governance: New ICANN Bylaw on Human Rights
As part of a significant institutional reform in global governance of the Internet, the Internet Corporation for Assigned Names and Numbers (“ICANN”)—an internationally organised multi-stakeholder body that secures the operation of the Domain Name System (“DNS”) globally—has recently included a “Core Value” of “respect for internationally recognised human rights” in its Bylaws. Since the DNS is integral for navigating and browsing the Internet, policies governing its operation have enormous human rights implications at the global level. After more than three years of multi-stakeholder deliberations over the appropriate Framework of Interpretation (FOI) for the new Core Value, ICANN Board has finally approved it in November 2019, taking one crucial step forward towards the implementation of its newly pronounced human rights aspirations. This article critically examines ICANN’s latest human rights rhetoric and argues that the new aspirations in the Bylaws are drafted in a way that they carry little, if any, legal weight. I will further show that the new aspirations in the Bylaws are much weaker than the quasi-constitutional, self-imposed commitments in ICANN’s founding documents—the Articles of Incorporation. ICANN has proved to be reluctant to comply with those self-imposed commitments in the past; and I argue that it is, therefore, unlikely to convert its novel human rights rhetoric into practice. This raises questions about the extent of its commitment to human rights values, and whether the new Core Value amounts to little more than a veneer intended to bolster ICANN’s public image and confidence in light of the ongoing institutional reforms in Internet Governance.
†Fellow and Lead of “Technologies and Rule of Law” Research Stream, Allens Hub for Technology, Law and Innovation, Faculty of Law, UNSW Sydney, Australia. Justine Nolan, Nicolas Suzor, Angela Daly, Robin Gross, Stephanie Perrin, Felicity Bell and Leah Grolman for their insightful comments on earlier drafts. I am also grateful to ICANN’s Non-Commercial Users Constiuency, in particular Milton Mueller, Farzaneh Badiei, Collin Kurre, Stefania Milan, Niels ten Oever, Vidushi Marda, Aarti Bhavana, Kathy Kleiman and Konstantinos Komaitis, who have worked hard to advocate and promote human rights at ICANN.
The Democratic Digital Dollar: A Digital Savings & Payments Platform for Fully Inclusive State, Local, and National Money & Banking Systems
Many national and subnational units of government see a need for more inclusive money, payment, and retail banking systems for the capture, storage, and transfer of spendable value among their constituents. Existing and still proliferating payments platforms, most provided by for-profit private sector entities, exclude too many people, and extract too much value in the form of needless transaction charges and other rents, to be up to the task of efficiently affording this essential commercial and financial utility to the full public on sensible terms. This Article sketches a smart-device-accessible platform— the ‘Digital Dollar Platform Plan’—which, thanks to new payment technologies, can easily be put in to place and administered by any unit or level of government with a view to supplying this critical commercial and financial infrastructure to all of its constituents.
† Edward Cornell Professor of Law and Finance, Cornell Law School; Visiting Professor of Finance, Georgetown McDonough School of Business; Senior Counsel, Westwood Capital, LLC; Co-Founding Director, Digital Fiat Currency Institute; Board Member, Public Banking Institute. The author has drafted legislation that would institute a version of the plan here discussed in the State of New York. This legislation has now been proposed by Assemblyman Ron Kim in the New York State Assembly and Senator Julia Salazar in the New York State Senate. See Empire State Inclusive Value Ledger Establishment & Administration Act, H.R. 8686, 2019 Assemb. Reg. Sess. 2019-2020. (N.Y. 2019), https://assembly.state.ny.us/leg/?default_fld=&bn=A08686&term=2019&Summary=Y&Actions=Y&Text= Y&Committee%26nbspVotes=Y&Floor%26nbspVotes=Y.
Human Leadership in a Highly Regulated and Tech-Reliant Corporate Environment
Timo Matthias Spitzer, LL.M. (Wellington)†
We are living in times of drastic change and global legal, economic, and political turmoil, hoping for the best but expecting the worst. A focus on the shareholder may drive managers toward profit maximization, often with limited incentives to include environmental, governance, and social factors into corporate decisions. Crises show the need for human leadership with integrity to realign companies with stakeholders besides the shareholder, including the wider society.
Neither the regulator nor technology can replace the need for human leadership with integrity. As to supervision and best-in-class compliance policies, overregulation may even prevent directors from seeing the forest for the trees, and hamper their abilities to make moral judgment calls, as it is impossible to regulate all possible scenarios in advance. Technology supports cost- efficiency, but an irresponsible reliance may even be dehumanizing, as programs can reflect values of software developers, and artificial intelligence may inadvertently adopt societal bias, contributing to a moral dilemma.
International corporate governance codes – as exemplarily analyzed herein – recognize the advantages of moving toward a wider stakeholder inclusion, but such codes serve as recommendations only when they are unbinding in nature. To achieve a lasting solution, it would require introducing a legal entity model, which includes all relevant stakeholders in the company’s decision-making process. However, this would require material corporate law reforms, which are difficult to achieve and implement in the short-term and in the current climate.
As a practical solution, the elevation of the General Counsel (GC) as a strong and independent leader to the C-suite level would support the Chief Executive Officer (CEO) in achieving corporate sustainability through leadership with integrity. Such promotion would enhance the role of the GC as a proactive business partner and ultimately a protector of the corporation. The revised responsibility would still include assessing legal and compliance matters but extend toward assisting the CEO in strategy, budgeting, governance, human resources, and other key matters for the company.
†Board Member and Adjunct Professor at the Institute for Law and Finance, Goethe University Frankfurt. The author would like to thank his team, in particular Cedric Liesens, Kajetan Sitko and Lukasz Lorent, as well as Julia Bayón Pedraza for being a role model and true leader. Kudos to the Association of Corporate Counsel, the International Bar Association and The Legal 500 for providing a forum for the global legal in-house community.
Cybersecurity Provisions in Trade Agreements: The State of the Art
Chimène I. Keitner & Harry L. Clark
Virtually without exception, conducting business across borders today means being connected to the Internet. The U.S.-Mexico-Canada Trade Agreement (USMCA), which is awaiting implementation by Congress, would become the first operative United States free trade agreement to include a chapter devoted to “digital trade.” The USMCA provisions on digital trade build on the electronic commerce chapter in the Trans-Pacific Partnership (TPP, now CPTPP)—a multilateral trade agreement that the Obama Administration negotiated, but the Trump Administration rejected. As the United States continues to negotiate the conditions for its bilateral trade relationships, cybersecurity concerns are likely to feature in the discussions.
As a general matter, trade agreements seek to reduce barriers to cross-border trade. The prospect of negotiating a trade agreement can be used as a “carrot” in foreign relations, whereas punitive measures such as sanctions and tariffs are used as “sticks.” Meanwhile, growing concerns about cybersecurity and the perceived risks posed by foreign technology and foreign control over data create pressures for more trade-restrictive arrangements. This essay examines provisions relating to digital trade and cybersecurity against the backdrop of these potentially competing interests. We begin by describing current efforts to address cybersecurity-related concerns in trade treaties, with a focus on the USMCA. Next, we address concerns at the intersection of cybersecurity and national security. Third, we identify an apparent trend towards company-specific arrangements rather than global regimes. Finally, we offer an assessment of current efforts to use trade treaties to resolve cybersecurity and digital trade challenges.
 Office of the U.S. Trade Representative, Agreement between the United States of America, the United Mexican States, and Canada, Nov. 30, 2018; see Roy Blunt, USMCA: Where Things Stand, Senate Republican Pol’y Comm. (Mar. 26, 2019), https://www.rpc.senate.gov/policy-papers/usmca-where-things-stand.
 See, e.g., Anupam Chander, The Coming North American Digital Trade Zone, Council on Foreign Rel. (Oct. 8, 2018), https://www.cfr.org/blog/coming-north-american-digital-trade-zone (observing that “the TPP is dead, long live the TPP”).