More and more aspects of life are covered by the internet. This increases the number of relationships that arise between natural and legal persons. These relationships can arise via the internet in general, on platforms like LinkedIn or in virtual worlds like “Second Life”. In the future, the “metaverse” or similar “virtual worlds” may aim to supplant the real world, creating even more complex legal relationships.
Where the natural or legal persons involved in internet relationships belong to the same jurisdiction, things are relatively easy: the domestic law applies. But what if the natural and legal persons live and operate in different jurisdictions and the platform owner in a third? Which law is applicable? How are the weaker persons in the respective relationships protected? How can the rights and obligations be enforced? These are just some of the many questions that arise with regard to international cyber relationships.
The Regulatory Institute is investigating internet-based international legal relationships in view of a future article, a checklist for regulators, a compendium of model provisions or even an entire model law. The exact theme and format of the final output will be defined only in the course of the investigation.
The investigation should at any rate cover work / labour relationships. But if feasible, we would like to expand it to include private law contracts in general. Ideally, the investigation should also cover other kinds of interactions like insults, sexual and other harassment, verbal violence, threats, dismissive statements on religion or convictions, wrong accusations or statements on other persons, fake news, racism, and fraud. Beyond the classic contractual relationship, we might also enter the tort-related fields of injunction, repair, contractual sanctions, and penal sanctions.
The goal of the investigation is not to reinvent the wheel, but to describe a way how to adapt the principles of international private law and the applicable national rules to the particularities of international internet-based relationships and to complement these provisions when needed. The outcome of the investigation could interface provisions that ensure the correct application and better functioning of international private law and the applicable national rules to the international internet-based relationships.
If the national laws were complete and clear also with regard to international internet-based relationships, no interface law would be needed, simply information on where to find and how to apply the law to internet-based relations. However, we suspect that the national laws merit completion and clarification. For example, the criteria determining whether a relationship is subject to social security obligations might not cover so well the situations in which the worker is located in another jurisdiction than the person commissioning the work and the platform in a third jurisdiction.
Beyond the mere clarification, jurisdictions might also consider whether it is appropriate to formally withdraw or suspend the application of domestic law where the internet platform owner or virtual world owner has established an equivalent protection of the weaker party, e.g. by establishing an equivalent social security system.
The Regulatory Institute is aware of the various piecemeal approaches of jurisdictions to regulate some aspects and types of internet-based international relationships. However, we consider that a more comprehensive and complete approach is needed to avoid numerous frictions and incompatibilities of national requirements.
The Regulatory Institute is also aware of the huge size of the task it wishes to undertake. Therefore, it invites all interested persons and institutions to contribute.
In more detail:
A. During our investigation, we have to reflect on various levels, such as the:
- International private law of the various jurisdictions and their interaction,
- responsibility and mechanisms of the platforms and virtual worlds, and
- relationship between the first and the second.
B. For the relationship between the first and the second level we might have to consider:
- On one hand, jurisdictions will have to establish a body of provisions which cannot be alienated by bilateral agreements of users of the platforms and virtual worlds and by the general conditions of use established by the owners of the platforms and virtual worlds (“ius cogens”).
- On the other hand, jurisdictions would have tremendous difficulties in enforcing their law without the help of the owners of the platforms and virtual worlds, even though a few mechanisms for requesting enforcement with their help exist. In such a situation, jurisdictions might decide to officially refrain from applying or “suspend” their own law and enforcement of the “law” established by the owners of the platforms and virtual worlds is good enough and if that “law” is well enough enforced. This brings us to the need for establishing a set of criteria for what is a fair intra-platform or intra-virtual-world law and enforcement. These criteria might therefore be embedded into the private law and international private law of the jurisdictions.
C. The criteria referred to in the previous paragraph may inter alia relate to:
- Effective protection of civil rights by an internal arbitrage procedure, including for most frequent cases like non-payment, non-delivery of goods or services, delayed goods or services; deficient goods or services; whilst goods and services may relate both to the real world and the platform or virtual world;
- Effective protection of labour rights by an internal arbitrage procedure;
- Effective protection of social (security) rights;
- Effective protection against penal offences where they might trigger subsequent civil rights by an internal arbitrage procedure;
- Effective support of victims where the these prefer to go for an ordinary judicial procedure;
- Alert mechanisms I: participants to alert the platform / virtual world owner to trigger its policing;
- Alert mechanisms II: platform / virtual world to inform real world authorities;
- Absence of completely unfair rules on judicial forum and applicable law; and
- Clear provisions on judicial forum and applicable law.
D. Once we have established such a list of criteria for what is a fair intra-platform or intra-virtual-world law, we might also reflect in terms of public law:
- Should jurisdictions, as a matter of public order, request platforms and virtual worlds to respect these criteria?
- If so, should jurisdictions impose these criteria?
- What if various jurisdictions thus impose criteria which are mutually conflicting?
E. Like for other model law projects, we hope that our investigation might facilitate the emergence of an international consensus on such appropriate criteria so that platforms and virtual worlds still can be operated as internationally as possible. Thus we hope that our investigation will support a soft harmonisation of law.
F. Such soft harmonisation should be as comprehensive and complete as possible. Hence, a complete analysis of aspects to be regulated and subsequently to be covered by the platforms and virtual worlds might turn out to be useful. Here, as a first trial, a list of such aspects:
- Consumer rights;
- Protection of minors;
- Protection of gambling, gaming or online addicts;
- Protection of other vulnerable persons;
- Child sexual abuse material;
- Extreme pornography;
- Representation of extreme violence;
- Verbal violence;
- Other illegal content (e.g. instructions on how to produce illegal goods);
- Sexual and other harassment;
- Threats and extortion;
- Insults;
- Wrong accusations or fake news on other persons;
- Propaganda / dissemination of political or societal fake news;
- Instigation to hatred / hate speech;
- Dismissive statements on religion or convictions;
- Racism;
- Dismissive statements on sexual orientation;
- Attack on a state’s goods and symbols;
- Fraud;
- Extortion;
- Falsified (virtual) goods and documents;
- Theft (of virtual currencies, intra-platform/virtual world rights, bank account money etc.);
- Patent rights violations;
- Brand protection (including for intra-platform / virtual world brands);
- Copyrights violations;
- Personality rights;
- Data protection;
- Taxation obligations, including for speculative wins made with virtual goods;
- Currency use, including with regard to virtual currencies; or
- Instigation to violations with regard to any of the above.
G. Complete national regulation and soft harmonisation of laws also require establishing a core of obligations of the owners of platforms and virtual worlds. These obligations might inter alia relate to:
- Informing authorities on incomes and speculative wins of users;
- Informing authorities on activities which are subject to social security obligations;
- Informing authorities on activities or facts which are subject to taxation;
- Fair publicity obligations;
- Warning obligations, e.g. in view of minors or gaming addicts; and
- Fair provisions on the forum and applicable law in the relationship between users and platform / virtual world.
H. The analysis of the aspects listed under F. and the obligations under G. might also be helpful for the owners of internet platforms and virtual worlds when developing a regulatory strategy. By covering most aspects and obligations with effective internal policies, they can increase the likelihood of jurisdictions recognising the level of protection of the weaker parties to be sufficient / fair enough so that the application of national law can be withdrawn or suspended. Such withdrawal or suspension is in the interest of the platform or virtual world owners, in so far as the activities will be less hampered by constraining national law: imagine how cumbersome it would be for a worldwide operating platform or virtual world owner to fulfil legal requirements of 50+ jurisdictions.
I. Less evidently, such withdrawal might also be in the interest of the jurisdictions. The jurisdictions have difficulties in terms of enforcement of their law with regard to internet-based international relationships. Instead of seeing their “ideal” law not enforced, they might prefer to push the platforms’ and virtual worlds’ policies being pushed upwards to an effective and sufficient / fair enough protection of the weaker parties and reserve their limited enforcement capacities for other policy fields. Thus a potential win-win for jurisdictions and platforms or virtual worlds alike.
Evidently, the points listed in A. to I. are still quite superficial. They aim to illustrate which aspects might be covered by the investigation which might take 4 to 12 months. The Regulatory Institute is open to contributions from all who wish to contribute.