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Digital Constitutionalism and the Role of the Rule of Law in the Governance of Virtual Communities

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Digital Constitutionalism and the Role of the Rule of Law in the Governance of Virtual Communities Digital constitutionalism and the role of the rule of law in the governance of virtual communities Nicolas Suzor Doctor of Philosophy thesis, School of Law Queensland University of Technology June 2010 Digital constitutionalism and the role of the rule of law in the governance of virtual communities Thesis in fulfilment of the requirements for the degree of Doctor of Philosophy (PhD) June 2010 Written and submitted by Nicolas Suzor LLM (Research), LLB, BinfTech (QUT) School of Law Institute for Creative Industries and Innovation Queensland University of Technology Brisbane, Australia Supervisor: Professor Brian Fitzgerald Professor of Intellectual Property and Innovation, QUT School of Law The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my know- ledge and belief, the thesis contains no material previously published or written by another person except where due ref- erence is made. Nicolas Suzor 18 June 2010 For Kylie. Acknowledgements This research was funded by a scholarship from the Institute for Creative Indus- tries and Innovation (iCi). I received additional financial support from the School of Law, the Faculty of Law, and Queensland University of Technology. I am grateful for the support of Greg Hearn during my candidature. I am greatly indebted to my parents, friends, family, and colleagues. For academic feedback, I am particularly thankful to Sal Humphreys, for exposing the subtleties of governance; Greg Lastowka for providing a legal framework; and Julie Cohen for showing how a critical conceptual model could unify social tensions and legal doctrine. Personally, professionally, and academically, I am extremely grateful to Brian Fitzgerald for his honesty, guidance, and intellectual prescience. I very much appreciate the personal support and thoughtful commentary of Brendan Nerdal and Ross Temby. Finally, to Kylie Pappalardo, who unfailingly believes in me, chal- lenges me, and encourages me, I am eternally thankful. Table of Contents Chapter 1. Introduction 13 1. Structure 13 2. Theoretical approach 20 3. Methodology 22 4. Structure of thesis 23 Chapter 2. Governance tensions: inadequacies in the current regime 27 1. Case studies 27 a. Property interests: Bragg v Linden Lab 28 b. Punitive measures: MDY v Blizzard 31 c. Rights and responsibilities: Facebook TOS 34 d. Discrimination – Sara Andrews and Mr Gaywood 35 e. Speech interests 37 2. The flaws with the standard legal approach 40 a. Cyberproperty 42 3. Avoiding the necessary marginalisation of participant interests 49 Chapter 3. The role of the rule of law 53 1. The deterministic trend in cyberlaw theory 56 a. Situating cyberspace 65 b. The rule of law 70 2. Governance limited by law 76 a. No arbitrary punishment 76 b. Substantive limits 79 i. Discrimination, speech, and protest 84 A. Speech limits 86 B. Disruptive protests 88 ii. Property 89 iii.Right to privacy 94 iv. Rights of legal enforcement 96 v. Summary – substantive values 98 3. Formal legality 99 a. Predictability 100 i. Clear rules 100 ii. Changing rules 101 10 iii.Emergent behaviour and uncertain rules 104 iv. Inconsistent application and discretionary enforcement 106 b. Procedural fairness 107 4. The role of consent and democracy 111 5. Conclusion 118 Chapter 4. Flexibility in the contractual governance model 121 1. The assent problem 123 a. Incorporation by notice 125 b. Incorporation by signature 129 c. Synthesis in Australia 137 2. Unconscionability and unfair terms 143 a. Trade Practices Amendment (Australian Consumer Law) Bill 2009 146 b. Application of unfair terms legislation 147 c. The US approach – Bragg v Linden 150 3. Estoppel, election, and good faith 152 a. Common law election – affirmation of contract 155 b. Estoppel 158 c. Good faith 161 4. Conclusion 167 Chapter 5. The enforcement of internal norms 171 1. Internal enforcement: the complex nature of internal norms 172 a. Internal enforcement of community norms 175 b. Limits on internal punishment 179 c. Identifying harm and the role of consent 186 2. Enforcement of internal norms in territorial courts 196 3. The need for punishment beyond the internal community 202 a. Criminal sanctions for breach of community norms – the story of Megan Meier 203 b. The role of compensatory damages 205 c. Punishment in private law 207 d. The interplay between contract and property, tort, and copyright 213 e. The need for an alternative approach 217 4. Empowering community governance 218 a. Restitutionary damages 219 b. Specific performance and injunctive relief 222 i. Specific performance and compensation to participants 223 ii. Injunctive relief 228 5. Conclusion 238 Chapter 6. Unresolved questions: limits to a contractual governance framework 241 1. Enforcement between participants 242 a. Enforcing the rules as they are 252 b. Compelling the provider 255 c. Enforcing the contract: third party beneficiary doctrine 257 11 d. Hybrid enforcement models 260 2. Third party enforcement 261 a. Tortious interference with contract 267 b. Secondary copyright infringement 268 c. Anti-circumvention 270 d. The future for third-party enforcement 273 3. Sui generis schemes – statutes of interration 274 a. Potential approaches for constitutional structures 277 Chapter 7. Conclusion 281 1. The contractual framework informed by rule of law values 282 2. Evaluation: the limitations of the framework 287 3. Future work 290 Appendix A. Annotated Bibliography 293 1. Books 293 2. Dissertations 296 3. Journal articles 296 4. Loose-leaf services 310 5. Legislation 311 6. Cases 312 7. Conference papers 316 8. Presentations 317 9. Other documents 317 10. Newspaper articles, magazine articles, and blog posts 317 11. Web pages 320 Chapter 1.Introduction 1. Structure This thesis considers one main question: how should we regulate the exercise of private governance power in virtual communities? This question centres on the legit- imacy of governance in the way that community norms are created and enforced. This is the project of digital constitutionalism, which seeks to articulate a set of limits on private power that will best encourage innovation and autonomy and simultan- eously protect the legitimate interests of participants in these increasingly important spaces. In answering this question, I provide a normative framework based upon the broad ideals of the rule of law through which to conceptualise the tensions about governance that arise in virtual communities. One of the most exciting and promising features of a global communications network is the ability for people to form communities with real personal relationships without the limits of distance.1 Beyond merely providing a forum for interaction, however, this is the promise of the potential for individuals to come together to create com- munities with their own consensual norms that reflect their particular needs and de- sires. Through participation in these spaces, these communities construct their own meanings to the actions and relationships that take place within the community. Much of the current legal scholarship about regulation of the internet makes one of two deterministic assumptions that fail to adequately conceptualise tensions around governance in virtual communities. The first is the cyber-libertarian fallacy, which recognises the great potential of virtual communities to develop their own consensual norms, but assumes that communities will always be best governed without the inter- vention of the territorial state.2 The familiar reply asserts that cyberspace is always 1 See Howard Rheingold, The Virtual Community: Homesteading on the Electronic Frontier (1994). 2 See, for example, John Perry Barlow, A Declaration of the Independence of Cyberspace (1996) <http://homes.eff.org/~barlow/Declaration-Final.html> at 26 August 2009; David R Johnson & David Post, “Law and Borders--The Rise of Law in Cyberspace” (1995) 48 Stanford Law Review 1367. 14 Introduction regulated and regulable, that there is no separate sovereign jurisdiction.3 This ap- proach leads to a second deterministic assumption, that the territorial state can best encourage the development of virtual communities by creating enforceable property rights and allowing the market to resolve any disputes.4 These deterministic assumptions are flawed firstly because they do not ascribe suffi- cient weight to the value-laden support that the territorial state always provides to private governance regimes through property and contract,5 the inefficiencies that will tend to limit the development of utopian communities,6 and the continued role of the territorial state in limiting autonomy in accordance with communal values. On a more fundamental conceptual level, these approaches are flawed because they releg- ate community governance either to a wholly external other space or to a wholly private space of passive consumption.7 In Julie Cohen's words, current cyberlaw dis- course has been largely “predicated on a teleology of disembodiment”8 that isolates participation in cyberspace from the remainder of lived experience. This disembodi- ment generally leads to attempts to draw borders around and create dichotomies between public and private spaces and real and virtual actions. The result is typically the delegitimisation of state intervention in the regulation of virtual communities. As virtual communities continue to become more central to the lives of individuals, the way that we conceptualise power relations within these spaces becomes
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