Georgetown University Law Center Scholarship @ GEORGETOWN LAW 2013 The Electronic Silk Road: How the Web Binds the World in Commerce Anupam Chander Georgetown University Law Center, [email protected] This paper can be downloaded free of charge from: https://scholarship.law.georgetown.edu/facpub/2297 https://ssrn.com/abstract=3662605 Anupam Chander, The Electronic Silk Road: How the Web Binds the World in Commerce (New Haven, Conn.: Yale University Press 2013). This open-access article is brought to you by the Georgetown Law Library. Posted with permission of the author. Follow this and additional works at: https://scholarship.law.georgetown.edu/facpub Part of the Computer Law Commons, Consumer Protection Law Commons, Internet Law Commons, and the Law and Economics Commons THE ELECTRONIC SILK ROAD THE ELECTRONIC SILK ROAD HOW THE WEB BINDS THE WORLD IN COMMERCE ANUPAM CHANDER New Haven & London Copyright © 2013 by Yale University. All rights reserved. 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Library of Congress Cataloging-in-Publication Data Chander, Anupam. The electronic silk road : how the web binds the world in commerce / Anupam Chander. pages cm Includes bibliographical references and index. ISBN 978-0-300-15459-7 (clothbound : alk. paper) 1. Law and globalization—Economic aspects. 2. Electronic commerce— Law and legislation. 3. Internet—Social aspects. 4. Globalization— Economic aspects. I. Title. KZ1268.C47 2012 381'.142—dc23 2012047258 A catalogue record for this book is available from the British Library. This paper meets the requirements of ANSI/NISO Z39.48–1992 (Permanence of Paper). 10 9 8 7 6 5 4 3 2 1 For Madhavi Sunder, sine qua non, and Harish Chander and Yash Garg, who sacrificed so much to embrace the opportunities of globalization I think of the ancient Silk Road as the Internet of antiquity. —Yo-Yo Ma CONTENTS Acknowledgments ix Introduction: Tracing a Silk Road Through Cyberspace 1 1 The New Global Division of Labor 18 2 Western Entrepôt: Silicon Valley 35 3 Eastern Entrepôt: Bangalore 59 4 Pirates of Cyberspace 87 viii 5 Facebookistan 113 6 CONTENTS Freeing Trade in Cyberspace 142 7 Handshakes Across the World 158 8 Glocalization and Harmonization 166 9 Last Stop: Middle Kingdom 192 Afterword 207 Glossary: A Cheat Sheet for Global E-Commerce 213 Notes 219 Index 265 ACKNOWLEDGMENTS Before there was trade in services via cyberspace, people moved. My parents migrated to the United States right before the celebrations marking the Bicentennial, my dad arriving in 1974 and then my mother, with my brother and me in tow, the following year. We flew from New Delhi via Beirut and London to New York, a route that would soon become impossible because of war. A legal change in 1965 made this flight possible. Before immigration law revisions that year, US law had set a quota of merely a hundred Indian immigrants per year. My par- ents’ move made possible the extraordinary education I received in the United States and, such are the ironies of globalization, allowed me to study under the great Indian Nobel laureate Amartya Sen. ix x In 2003, two disparate media sources I read, the crowd-sourced technology site Slashdot and the Indian-American paper India Abroad, converged on the phenomenon of “outsourcing.” The phe- nomenon bridged my two different scholarly areas of expertise—in ENTS international economic law and cyberlaw. By examining the issue DGM E from a legal perspective, I began to see that “outsourcing” was part of WL a larger phenomenon—trade in services via electronic networks. This NO K insight helped me see the crucial link that binds together both Ban- C A galore and Silicon Valley. Invited to a cyberlaw retreat on Cape Cod by Harvard University’s innovative Berkman Center for Internet and Society, I presented my initial thoughts on the subject in August 2003 in a paper then titled “NetWork.” There, Tim Wu pressed me on the implications of the General Agreement on Trade in Services for this new kind of trade. Over the past decade, I have learned much about the subject from my colleagues at various institutions. I remain indebted to Deans Kevin Johnson and Rex Perschbacher at the University of California, Davis, for remaining unfailingly supportive at every turn. I am grateful to my colleagues Afra Afsharipour, Diane Amann, Vik Amar, Mario Biagioli, Chris Elmendorf, Tom Joo, and Peter Lee for very helpful comments on drafts. I am grateful to colleagues at other institutions, including Susan Crawford, Tino Cuéllar, Mark Lemley, Adam Muchmore, and Michael Reisman. During the writing I had the privilege of being a visiting profes- sor at Chicago, Cornell, Stanford, and Yale law schools. I am also grateful to Harold Koh, then dean at Yale Law School and currently the legal adviser of the United States Department of State, who chal- lenged me to think more about “Trade 1.0” when I was discussing “Trade 2.0.” At lunch with Jack Balkin and me, Bruce Ackerman inquired whether global law was the natural outcome of the develop- ments I describe herein. Daniel Markovits and Alec Stone Sweet led xi a brilliant dissection of my argument in a workshop that I regret not recording. I am grateful to Jed Rubenfeld for an important dialogue on tensions between democracy and globalization. A C K I thank Dean Saul Levmore of the University of Chicago Law NO School for welcoming me into the fervent intellectual environment WL E of his law school for a year. In a faculty workshop at the University DGM of Chicago, Martha Nussbaum, philosopher and thinker nonpareil, ENTS urged me to make my normative vision explicit. Professor Dr. Rolf Weber of the University of Zurich offered incisive commentary when I lectured on the subject at the World Trade Institute’s annual World Trade Forum, hosted by Thomas Cottier and Mira Burri. Mira Burri and Ted Jaenger read the entire manuscript and provided superb suggestions. I thank Harvard’s Mark Wu for his thoughtful commentary in an online symposium on my paper, “Trade 2.0,” for the Yale Journal of International Law. I learned a great deal from law faculty workshops at Chicago, Connecticut, Emory, Florida State, Illinois, Oregon, Northwestern, UC Davis, UCLA, and Washington University (Saint Louis) as well as technology law and international law workshops at Stanford and Georgetown, respectively, and the Harvard-MIT-Yale Cyberscholar Workshop. Over the years, I have learned so much from my students. I acknowledge in particular students Kuang-Cheng Chen and Taejin Kim for educating me on cyberlaw in Taiwan and South Korea, respectively. Students such as Jessica Karbowski and Janice Ta of Yale Law School and Sarah Anker, Rubina Chuang, Audrey Goodwater, Angela Ho, Jordy Hur, Uyen Le, Kathryn Lee, Johann Morri, Dimple Patel, and Louis Wai of UC Davis performed invalu- able research. Librarians extraordinaire Aaron Dailey, Margaret “Peg” Durkin, Susan Llano, Elisabeth McKechnie, Erin Murphy, and Rachael Smith helped locate all manner of legal materials. xii Special thanks to Connie Chan, James Lawrence, Stratos Pahis, for excellent editing of earlier articles. Parts of this book are adapted from earlier published articles and book chapters and are used here with the permission of the publish- ENTS ers: “Trade 2.0,” Yale Journal of International Law (2009): 281–330; DGM E “Facebookistan,” North Carolina Law Review 90 (2012): 1807–44; WL “International Trade and Internet Freedom,” Proceedings of the NO K American Society of International Law Annual Meeting 102 (2009): C A 37; and “Globalization Through Digitization,” in The Impact of Globalization on the United States, ed. Beverly Crawford, vol. 2 (New York: Praeger, 2008), 73–97. At Yale University Press, Michael O’Malley, himself a noted author, championed the book. My editor Joseph Calamia carefully shepherded the book through production and provided thoughtful recommendations on the entire manuscript. I could not have asked for an editor more deeply committed to my project. Laura Jones Dooley provided a very careful copyedit. Another book from Yale University Press, Nayan Chanda’s Bound Together, helped me think about the role of individuals in globalization. In 2012, I received a Google Research Award to support related research on the Internet and free speech. My love and thanks to my children, Anoushka and Milan, for abiding a father who might go off on a hot Saturday to work on a chapter rather than taking them to the pool. My deepest debt is to Madhavi Sunder. INTRODUCTION Tracing a Silk Road Through Cyberspace The Silk Road linking the ancient world’s civilizations wound through deserts and mountain passes, traversed by caravans laden with the world’s treasures. The modern Silk Road winds its way through undersea fiber-optic cables and satellite links, ferrying elec- trons brimming with information.