WG Law and Development
Chair: David Restrepo Amariles
Discussant: David Restrepo Amariles
Tilen Cuk | Université libre de Bruxelles (Perelman Centre)
How algorithms make law: the curious case of ICOs (Initial Coin Offerings) and altcoins (alternative coins)
Since Lessig, we tend to consider algorithmic code as law in the sense that the code sets the architecture for the cyberspace and for how we experience it. A lot less consideration has been given to the fact that the code is increasingly used for legal engineering. Rather than see the code as law in and of itself, we would like to investigate the code as allowing startups to cherry-pick laws that apply or could potentially apply to their cyberstructure. By doing this, the algorithms allow building sui generis legal regimes specifically crafted for the underlying activity in question. Algorithms therefore also make the law.
Nowhere has this algorithmic legal engineering been as clear as with ICOs, initial coin offerings, that allow raising capital through blockchain-based infrastructures. Blockchain is a cryptographic technology that securely validates transactions in a decentralized network following a predetermined protocol. Blockchain is an algorithmic ledger that is secure by design as the transactions that have been validated by the network cannot be changed by a single user. There is no central authority, simply the network needs to follow the protocol to validate transactions.
Blockchain was first used for virtual currencies. But soon the programmers understood that blockchain can validate any right or obligation, not just the transfer of value. Indeed, an altcoin can represent any bundle of rights and obligations, it all depends on what we put in the algorithmic code. Startups started offering their altcoins in exchange for money that would be used for their projects. This activity, similar to initial public offerings (IPOs) took the name of initial coin offerings, or ICOs. But the exact bundle of rights and obligations inscribed in the coin can fall under very different regulations.
As startups are afraid of prosecution, private regulatory initiatives emerged. With many different regulations in different countries possibly applicable and regulators that are not willing to make a final statement on ICOs, there seem to be a global model for ICOs that is emerging from private practice. The paper intends to investigate different problems of legal qualification of ICOs and private initiatives to circumvent them and show how altcoins make the law.
Pedro Fortes | Oxford
A Case Study of Geo-Discrimination: How Algorithms Discriminate Based on Geographical Location of Consumers.
This paper will discuss geo-discrimination, understood as a differential treatment of individuals based on their geographical location. In the academic literature, the local area of residence may offer justification for different treatment exceptionally, if economic costs connected with transportation, access, and infra-structure are higher. On the other hand, the identification of an address or a zip code may not be used by itself as grounds for denial of rights or for charging a higher price for a particular product. The paper will examine real cases in which consumers were exposed to proposals of receiving lower quality of services or being charged a higher price because of the location of their residence. In the US, an internet retail company of e-commerce apologised and returned money excessively charged from consumers because of an algorithm that considered their location. In Brazil, healthcare insurance providers propose to limit the coverage of patients based on the already existing infra-structure on their municipalities. Additionally, there are cases of geo-pricing and geo-blocking of companies involved with electronic booking of hotel accommodations and charge more according to the location of the consumer transmitted through the cookies of the computer used in a given purchase. In conclusion, this paper will question the legal validity of these forms of geo-discrimination and examine violations of consumer protection laws.
Håkan Hydén | Department of Sociology of Law, Lund University, Sweden
Algorithms as Norms
Algorithms are our new “laws” which affect people in their everyday life but without having a democratic opportunity to affect them. Being products of the ongoing digital transformation of society they have far-reaching how we do it and what can be done. This revolutionary technology which has taken hold of society in recent decades has been characterised as “disruptive” (Christensen, Clayton M. (2016). The Clayton M. Christensen reader: selected articles from the world's foremost authority on disruptive innovation.. Boston, Massachusetts: Harvard Business Review Press), meaning it makes earlier modes of producing and living outdated.
The purpose of the article is to analyse how digital technology creates its own norms. These norms are unique. They are not products of free will, nor of coercion. Rather, their normative consequences are the result of how the technology is used. Others have described these norms as freestanding imperatives (Habermas, Jürgen (1987). The theory of communicative action. Vol. 2, Lifeworld and system : a critique of functionalist reason. Cambridge: Polity). We lack knowledge of how these norms affect us and which normative effects they have for society at large. What are the underlying cognitive assumptions and what are their implications for values that people hold? The article seeks to address these questions by using norm scientific theory and method. The ambition is to follow up the shift of norm-setting power from (constitutional) law in the hands of jurists and politicians to algorithms created by engineers and technology systems.
Gregory Lewkowicz | Université libre de Bruxelles
Traduttore, traditore: The transformation of legal concepts in automated decision-making
From automated ticketing system to the stress-testing of high frequency trading algorithms, automated decision-making is an important trend in contemporary legal enforcement. The common picture is that, in the process of automation, existing legal rules are merely translated into smart legal devices. On the contrary, this paper will argue on the basis of examples from financial law, contract law and administrative law that legal concepts are completely overturned through automation. The fact that the Italian expression “traduttore, traditore” holds true in the context of the migration of legal rules into technological devices may seem obvious. However, the paper will show how this treason is specifically connected to the so-called mathematical turn in law.