Law and Information

For the fifth time within two months I’m finding myself back in Cambridge, Mass. You can’t imagine how much I love this place. There are many reasons why I think Cambridge is among the most exciting and inspiring places to be. One reason, of course, are the many wonderful friends and colleagues that have been working and living here. Take as one prominent example my brilliant colleague Derek Slater, Fellow at the Berkman Cente and EFF affiliate with whom I had the pleasure to work on a couple of projects. He has just posted two interesting podcasts on his blog. In the first piece, Derek reports about the P2P litigation summit he participated in, arguing that we have to learn more about – and from! – the stories of the people that got sued by the recording industry. In the second podcast, Derek provides a big-picture analysis of possible (technological, business, and policy) approaches to the file-sharing problem. In essence, he makes a strong case why policy-makers should not take drastic measures (such as, e.g., compulsory licensing systems or, as the worst-case scenario, mandatory DRM schemes) to address the current digital media crises. Rather, policy-makers may be well advised to trust in the evolutionary power of market mechanisms on the one hand (emerging business models, in fact, might address the problem) and to focus on the reform of the DMCA and certain procedural protection measures on the other hand.

Viktor Mayer-Schoenberger, together with John Crowley, has made available online his most recent piece entitled “Napster’s Second Life? – The Regulatory Challenges of Virtual Worlds” on SSRN. By examining virtual worlds like EverQuest and Second Life and using a law and economics approach, the authors develop a scenario as to how the real-world legal system will interact with virtual worlds. Viktor, in essence, argues that virtual worlds will increasingly be engaged in regulatory competition with each other by offering alternative governance structures – including the allocation of intellectual property rights – to their users.
Further, the authors argue that real-world law makers are unlikely to extend the reach of national legal frameworks into virtual worlds, but might aim at regulating virtual world providers. Against this backdrop, Viktor and John explore some of the potential consequences of such an approach and conclude that such an approach by real-world legislators is likely to backfire and push “virtual worlds along a path similar to the one along which the fight against Napster pushed music sharing – towards a decentralized peer-to-peer model, in which providers themselves disappear, and with them almost any hope of real world lawmakers to directly influence the governance inside virtual worlds.” As an alternative, the authors recommend national lawmakers to facilitate the creation of robust self-governance structures within virtual worlds rather than “napsterizing” virtual world providers.