Going Private: Technology, Due Process, and Internet Dispute Resolution
University of California at Davis Law Review, December 2000
70 Pages Posted: 21 Sep 2000
Despite cliches about Internet speed, disputes that arise on and about the Internet can be time-consuming to resolve, legally murky, and factually complex. In response, Internet players with market power are opting out: mandatory arbitration is replacing both substantive law and court procedure, and technological remedies are providing self-help without any dispute resolution at all. These alternative procedures tend to move faster than courts and to cost their corporate creators less than lawsuits. They are also structured to maximize the success of the powerful. But faster is not always better. Cheap is not always fair or accurate. Market power is not always used to achieve the public good. And the power to make the rules is often the power to win the game. The Internet is a largely privatized world, and private actors are creating structures under which governments and their courts are increasingly irrelevant.
A combination of private forces, government cooperation, and technological feasibility is creating a trend. Government, in the form of courts, is being marginalized and squeezed out of dispute resolution. When the technology of the Internet is capable of providing a remedy attractive to those with the power to design it, there is incentive to use it. When the law (procedural as well as substantive) is unappealing, a combination of contract and technology minimizes its impact. Further, the benefits of this privatization are not evenly distributed but result in some clear winners: trademark owners; copyright holders; corporate repeat players. The use of contract is already moving much of this dispute resolution out of the courtroom. We are not far from a time when technology makes it possible to move it out of the realm of the human.
The article discusses four important contexts in which Internet disputes have become privatized, and privatized in ways that provide predictable advantages to the already-powerful: 1) the domain name dispute policy of the Internet Corporation for Assigned Names and Numbers (ICANN); 2) the take-down provisions of the Digital Millennium Copyright Act; 3) the use of digital rights management technology to provide computer-activated self-help to those seeking to impose and automatically enforce contract; and 4) contractual shrinkwrap or clickwrap clauses mandating binding arbitration, in consumer transactions, of contracts creating their own law.
These scenarios, if left unchecked, will have several consequences for the power of courts as institutions and for due process to litigants. First, they result in privatized justice. Second, the processes shift procedural advantage to certain powerful players. Third, the mechanisms do not protect certain traditional components of due process in dispute resolution. Fourth, by eliminating government-run courts as the arbiters of disputes, these processes decrease the power of government to shape and enforce substantive law. For example, these processes can result in granting trademark owners protection they would not be granted under trademark law, copyright owners rights to prevent or license publications that they could not control under copyright law, and sellers rights to impose terms they could not impose under commercial law. Public interests that balance private property rights under real world governments (including free speech, an intellectual commons, and consumer protection) need not be included in these privatized systems. The article concludes that government action will be necessary to set minimum standards of public policy and due process, and they must do so quickly before the architecture of the Internet is too entrenched to change.
JEL Classification: K41
Suggested Citation: Suggested Citation