Report on the 11th International Media Law Forum (IMLF) with Prof. Pistor
On November 9, 2020, the Institute for Media and Communications Law (IMKR), in collaboration with the German-American Lawyers’ Association (DAJV) and the Collaborative Research Center 1187 “Media of Cooperation” at the University of Siegen, hosted the 11th International Media Law Forum (IMLF), attended by approximately 70 international and national scholars, practitioners, and other interested parties. Prof. Dr. Katharina Pistor, LL.M. (London), holder of the Chair of Comparative Law at Columbia Law School in New York, spoke on “Legal foundations of (digital) surveillance capitalism.”
According to the U.S. economist Shoshana Zuboff, who coined the term, surveillance capitalism is understood as the rise of the use of digital data for private profit maximization, which largely takes place outside the existing legal framework. Pistor disagreed with this assessment. In doing so, she linked the fundamentals of the capitalist system to its legal foundations. Specifically, Pistor addressed data exploitation and the question of data ownership. Her remarks form part of her broader reflections on the relationship between capital and law, as presented in her book The Code of Capital, published by Princeton University Press. The German edition, Der Code des Kapitals, was published by Suhrkamp in November 2020.
Pistor began by illustrating the concept of the “commodification” of data as a process of commercializing personal data. The largest data-processing technology companies (Big Tech) have achieved their market dominance by collecting, exploiting, and controlling data on a massive scale worldwide – data that millions of individuals, as data producers, disclose either consciously or unconsciously. Big Tech companies maintain the view that the collected data, as res nullius, belongs to no one and may therefore be collected and exploited at will. In contrast, Pistor highlights, among other things, the principle of res communis in Roman law, according to which certain assets may not be privately appropriated in accordance with the collective will. One way to balance these interests could be for data producers to have claims to forms of profit-sharing in exchange for relinquishing their property rights to the collected data.
Pistor considers it ill-advised to simply present data producers with a “take it or leave it” option from Big Tech as a means of avoiding data exploitation. The most significant digital platform operators are run by the largest Big Tech companies, resulting in oligopolistic or, in some cases, monopolistic structures that, given network effects, leave few viable alternatives. As a result, the largest platforms would become so dominant that only a few data producers would want to opt out of participation and would consequently remain subject to data exploitation.
Despite sometimes collecting supposedly unowned data free of charge, data collectors secure the right to complete control by cleaning and classifying the collected raw data in order to sell it to their customers as data with predictive power regarding future consumer behavior. For this reason, Pistor speaks of a monopolization of data by private companies and the subsequent “data capitalization,” whereby Big Tech grants its customers selective access – for a fee – to the processed data with predictive power and assigns economic value to that data based on its use.
Data processors justify their business model by asserting property rights to the collected data, which they claim are justified by the combination of the data and the work performed. The data, they argue, constitutes an asset, and the work performed consists of cleaning and aggregating those data sets. According to Pistor, it is unclear whether this legal interpretation is correct. She sees a failure on the part of lawmakers to declare data “res communis” in a timely manner and thereby ensure protection against private appropriation. The current situation of data monopolization and the monetization of predictive data is difficult to correct in hindsight and ultimately remains in a legal gray area. A reorganization is unlikely to be achieved through unilateral action relying solely on contract law or antitrust regulations. Instead, data processors could have successfully advocated, among other things, for stricter trade secret laws, including the introduction of criminal penalties for violations such as hacking and data theft.
Pistor then turned to legislation aimed at protecting personal data and restricting unrestrained data collection. Promising approaches include laws enacted by various U.S. states (e.g., the California Consumer Privacy Act, the California Privacy Rights Act, and the New York Stop Hacks and Improve Electronic Data Security Act) as well as the EU General Data Protection Regulation (GDPR). Since the GDPR took effect, consent from data subjects must always be obtained for data collection, at least within the EU. In addition, Article 20 of the GDPR grants the right to data portability from one data controller to another. At the end of her presentation, Pistor discussed the potential implications for antitrust and tax law. In the ensuing discussion, participants at the 11th IMLF debated, among other things, whether digital technology creates a new power to actively influence human behavior, which could necessitate further regulation.
Further reading: Pistor, “Rule by Data: The End of Markets?”, Law and Contemporary Problems 83 (2020), 101 (also available at https://scholarship.law.duke.edu/lcp/vol83/iss2/6).
