Abstract
Over the last three decades, Europe has transformed itself from an industrial society into an information society. In particular the rise of the Internet has been instrumental in this transformation. The Internet has opened up new possibilities for innovation, social interaction and democratic participation. However, the Internet has also given rise to new societal issues such as cybercrime, the invasion of privacy, the curbing of free speech and infringement of intellectual property. These issues raise questions of a moral, ethical and legal nature. The goal of this study is to examine these issues in light of current technological, economic and societal developments.
Technological trends
The pace of innovation on the Internet is rapid. Broadband networks and the roll-out of next-generation networks have spurred the development and growth of new online services, which in turn fuel the demand for more broadband capacity. Stimulating this virtuous circle is a key goal of the Digital Agenda for Europe [1]. The rapid adoption of broadband and the convergence of infrastructure such as telephone and television with the Internet have allowed for the development of a host of new applications and services. These new applications and services are changing significantly the way we use the Internet. In just a few years’ time the Web, which is often equated with the Internet, has changed from being a passive information source into being a medium that allows for active user participation (Web 2.0). The next step in the development of the Internet is that the Internet will always be available, at any time and at any place, through mobile Internet, cloud computing and ubiquitous computing. In the near future we will thus live in the Internet, rather than go on the Internet.
Societal trends
The Internet has had a significant impact on our society, and its further evolution will no doubt continue to influence our society, culture and economy. We can clearly see its influence on society in the changing behaviour and expectations of users. Because the Internet permeates our daily lives, we have come to expect that we can access relevant and context-sensitive information at any place and at any time. Context-sensitive information is accessed through applications (apps) on mobile devices such as smart phones and tablets and through connected appliances such as radios, televisions and even refrigerators. We can already see that Internet traffic is shifting away from the traditional World Wide Web towards these (mobile) applications. While this new ‘on-demand culture’, in which information is always available, is of great benefit to consumers and businesses, it also poses new ethical and legal questions—for instance, regarding the right to privacy and intellectual property. Moreover, it changes the balance of power on the Internet, shifting more influence towards companies in control of the hardware, content platforms and operating systems running these applications. The Internet has also had a substantial impact on business and business models. Supply-chain management systems, for instance, have merged with the Internet, making logistics more effective, efficient and transparent. This has allowed for the creation of new integrated business models in both business-to-business and business-to-consumer relations. The ‘Internet of things’ is set to change logistics, supply-chain management and retail even further. Technologies such as RFID (Radio Frequency Identification) and 2D barcodes promise to reduce costs, stock depletion and theft, while at the same time making shopping easier, more personalised and more fun for consumers. However, these same technologies also raise questions about privacy and data protection.
A second trend is the changing role of users. Web 2.0 has enabled users to actively participate on the Internet. User-generated content, crowd-sourcing and co-creation act as catalysts for culture and creativity, but they also raise questions about intellectual property and the freedom of expression.
A third trend is that the Internet is no longer a ‘cyberspace’ that is disconnected from our physical world. To an increasing extent the Internet surrounds us in our daily lives. Ubiquitous computing and mobile Internet will bring us the Internet of things, while augmented reality allows us to project a virtual layer of information over our physical world. Furthermore, the exchange of virtual goods in virtual worlds means that our real economies are mixing with those of virtual worlds. This mixing of the physical and the virtual world raises questions about privacy, the freedom of expression and intellectual property.
A last trend that deserves mention is the increased dependency we as a society have on the Internet. The Internet has become a critical infrastructure for the future of Europe and an integral part of everyday life. Any disruption of the Internet may have serious (economic) consequences. Furthermore, dependency on the Internet creates vulnerability in the sense that our dependence on the Internet can be exploited by malevolent parties such as cybercriminals.
Regulating the Internet
Technological trends and the societal changes that accompany them have had a profound influence on Europe. Given the importance of the Internet for European society and the economy, regulation of the Internet is necessary. The nature of the Internet, however, poses significant challenges for effective regulation. A first significant challenge is anonymity. While this allows people to express their thoughts and feelings without fear of persecution, the anonymous nature of the Internet can also be abused by cybercriminals. A second challenge is the boundless nature of the Internet. Because the Internet does not occupy physical space and thus has no borders, attempts to regulate it often run into issues of competing sovereignty and jurisdiction. A third challenge is posed by ‘technological turbulence’. Because of the rapid pace of innovation and development on the Internet, any regulatory approach is bound to lag behind the technological reality, leading to friction and legal uncertainty. A final challenge is the fact that the Internet is for the most part owned by private entities whose interests do not necessarily align with those of the regulator. These characteristics of the Internet make regulating online behaviour a very difficult task indeed. Most if not all of the online dilemmas described in this report have their roots in these regulatory challenges.
Regulating (or not regulating) the Internet may affect the interests and rights of different actors in society. In order to keep the Internet an open communication infrastructure for vibrant social interaction as well as an engine for economic growth in Europe, we must ensure that the values and norms of the European Union are reflected in this infrastructure. Important regulatory goals for the Internet are based on values such as trust, safety, security, freedom, innovation, equality, fairness, reciprocity and decency. From these values we may deduce three primary regulatory goals:
to stimulate trust in the infrastructure, platforms and services that make up the Internet by ensuring a secure, safe and fair online environment;
to ensure that fundamental rights and liberties are protected in an online environment; and
to create an open and level playing field for economic actors that stimulates growth and innovation.
When it comes to describing the different options for regulating the Internet, we may distinguish four different approaches: self-regulation, state regulation, co-regulation and regulation through digital architecture (code as law). Each of these regulatory approaches has particular strengths and weaknesses.
Self-regulation was the dominant mode of regulation when the Internet was still in its infancy. But as the Internet grew in size, scope and importance, the limits of self-regulation, most notably its voluntary nature, became apparent. Given the importance of the Internet for European society and the economy, state-issued regulation is now the most important mode of regulation. However, the borderless nature of the Internet and the fact that most of the infrastructure is in the hands of private entities limits the possibilities of state regulation significantly. A third option is co-regulation. In this approach the government sets the boundaries of the legal framework, which is then filled in by the relevant actors. The co-regulatory approach thus combines aspects of self-regulation and state-issued regulation. While co-regulation can be an effective option for regulating online behaviour, its effectiveness is dependent on the participation of all the actors involved. A final mode of regulation is regulation through digital architecture. By regulating the behaviour of actors online through technology, enforcement of rules can be secured. Examples of the ‘code as law’ approach are filtering and blocking, digital rights management and mandated net neutrality.
Regulating the Internet may affect the rights and interests of actors in the information society. Rights and interests that are at stake include the safety and security of citizens online, the right to privacy, freedom of expression, the right to (intellectual) property and the free and correct functioning of the internal market. The most important question when it comes to regulating the online world is how we balance these different rights and interests, and how we can ensure the greatest degree of freedom online for individuals, groups and organisations without harming the rights and freedom of others and the good of society as a whole (e.g., security and economic growth).
Online dilemmas
In this study we identify four ‘online dilemmas’ in which the issue of effective regulation and the balancing of different rights and interests feature prominently. They are innovation, freedom of expression, privacy and intellectual property.
Innovation
The Internet is a key driver of the future prosperity of Europe. Building an online ecosystem that optimally facilitates the development (and subsequent consumption) of new applications and services is thus a key policy objective for Europe. Important challenges in this area are the creation of a single digital market and the question of which approach is best for stimulating an open and competitive online environment.
The first challenge is to create a truly single digital internal market for Europe. Currently, the European market is too fragmented, stifling innovation and hindering cross-border e-commerce transactions. Further harmonisation of national and EU legislation is therefore necessary.
The second challenge is to determine whether ex ante legislation is necessary to keep the Internet a free and open environment, or whether a more targeted legal approach with ex post enforcement is more prudent. This question is central to the discussions about net neutrality and interoperability.
Net neutrality is the idea that a public information network should aspire to treat all content, sites and platforms equally (Wu n.d.). While both proponents and opponents of net neutrality agree that to be an optimal climate for innovation, the Internet should be an open environment, they disagree on what is the most effective regulatory mechanism to ensure this openness. Those in favour of net neutrality argue that mandating network operators and not influencing the flow of data on their networks (i.e., net neutrality) is the only way to ensure an open online ecosystem. Opponents of net neutrality argue that net neutrality is ineffective and unnecessary and that it upsets the free market. They argue that the integrity and trustworthiness of the network, quality of service, service differentiation and the ability to deal with freeriders are arguments for abandoning the principle of net neutrality. Given the fact that any policy choice on net neutrality may have far-reaching consequences for innovation in Europe, it is necessary to explore all possible options. Alternatives to mandated net neutrality include transparency, competition and strong oversight. Moreover, in discussing neutrality rules on the Internet, we should also take into account the changing nature of Internet services and use in Europe and the possible shifts in power and influence these changes entail.
When it comes to interoperability, the first challenge is that the European standardisation process is often too slow to keep up with the rapid pace of development on the Internet. Therefore, the European Commission is currently modernising its standardisation policy. A second challenge in the area of interoperability is how to ensure that companies do not use de facto standards in a manner that implies unfair competition. The Commission is currently contemplating the idea of imposing ex ante legislation in order to ensure openness and interoperability. This approach is controversial, however, as it may lead to legal uncertainty and may influence the free market (i.e. the freedom of businesses) to a significant degree.
Freedom of expression
Freedom of expression is a fundamental human right and a prerequisite for our democratic society. The Internet has been a great stimulus to the freedom of speech in Europe, because it allows people to easily voice their opinions (possibly anonymously), connect with other users, make direct contact with their elected representatives and find information online. At the same time, however, the Internet also allows for the abuse of the freedom of expression. In addition to this, the Internet also opens up new possibilities for criminal behaviour.
Law enforcement on the Internet is a prerequisite for a safe and secure online environment, but at times it may be at odds with freedom of expression. Freedom of expression is a particular concern when technical measures such as filtering and blocking are used. Given the impact filtering and blocking may have on the free flow of information (and the right to privacy), particular care needs to be taken in their implementation. First of all, effectiveness should be assessed. Second, we must consider whether their application passes the tests of proportionality and subsidiarity. Options that are less far-reaching may include strengthening traditional law enforcement, creating public-private partnerships and strengthening international cooperation. Finally, we must take into account the risks of the slippery slope and those of function and mission creep.
Privacy
The Internet both offers opportunities for and poses threats to the privacy of users. The relative anonymity of the Internet protects the privacy of users, but at the same time vast amounts of personal data are stored daily, with or without the consent of users. Privacy in general and the protection of personal data in particular are therefore key issues when it comes to freedom online. It is important to recognise that while privacy is a right in itself, it is often more a means than an end. Privacy protects among other things our individuality, freedom and reputation. By separating contexts, shielding information from third parties and limiting the processing of personal data to those instances where it is necessary, we can protect privacy.
While privacy is a fundamental right, it is not absolute. The amount of privacy granted to an individual must always be balanced against society's need for openness and disclosure. Ideally, individuals should be able to enjoy the maximum amount of privacy, but there are instances where the legitimate interests of society (for instance, public health or security) may outweigh the individual's right to privacy. Moreover, we must acknowledge that (personal) data is the ‘lifeblood’ of the information society and that without the ability to process personal data, it would be impossible to operate many of our modern information services.
In order to preserve privacy and stimulate the free flow of personal data, we must raise awareness about privacy issues, heighten transparency, strengthen oversight, employ privacy through design mechanisms and put users in control of their personal data. Finally, we must continue to rethink privacy legislation in order to keep up with technological and societal developments.
Intellectual property
The Internet and digitisation have radically altered the landscape for the creation and distribution of content. Movies, music, games, software and e-books can be copied and distributed at minimal cost and without loss of quality. While the Internet has revolutionised content creation and distribution, it has also had a negative side effect in that intellectual property infringement now takes place on a massive scale, putting severe stress on intellectual property and its enforcement. For a knowledge-based economy such as Europe's, the creation and free flow of information is of vital importance. We must therefore create an environment that stimulates the creation and consumption of content. To create such an ecosystem online, we must ensure the protection of intellectual property while also ensuring the free flow of information.
Stimulating the development of new business models is necessary for the creation of a market for legal content that suits consumer needs and wishes. In order to facilitate the growth of new business models, we must strengthen and harmonise the internal market, combat piracy and illegal file sharing and look for alternative compensation mechanisms. Furthermore, creators need to be enabled to protect, market and monetise their works using mechanisms such as the Creative Commons, content platforms and easy-to-use (micro) payment schemes. Such an approach is not limited to professionally created content but is also applicable to user-generated content.
Conclusion
Our modern-day Internet is an environment that allows for great freedom, but with freedom also comes responsibility. If we want to keep the Internet an open, safe, and vibrant online environment, we must ensure that we take into account and protect the rights and interests of all members of society. The greatest challenge for Europe is to ensure the highest degree of (online) freedom for all. This means balancing the rights and interests of individuals, groups and institutions with those of others as well as with the general good of our society. In balancing these rights, we must make sure that we do not play a ‘zero-sum game’, whereby values are exchanged for one another. Rather, we must aim to ensure that these values are maximised to the greatest extent possible. For instance, we must not exchange privacy for security, but seek an approach that strengthens security while maintaining privacy. In those cases where values do compete with each other, a political choice needs to be made.
Footnotes