Broadly speaking, the law protects certain communications from forced disclosure in judicial proceedings. For example, the law recognizes an evidentiary “attorney-client privilege,” which is a legal privilege that protects confidential communications made to an attorney by his client. (In addition, you may have also heard of the “doctor-patient privilege” or the “clergy-penitent privilege.”) Let’s focus on the attorney-client privilege for now. The conventional or stated rationale for the existence of this privilege is to encourage the client to disclose all relevant information to his attorney, even information that may be damaging or potentially embarrassing. Does this privilege really accomplish this goal? No one really knows …
In a previous blog post, we proposed a “Facebook legal privilege” to protect all posts on social media sites like Facebook, WordPress, and Twitter. The ultimate rationale for our argument is that people should be free to post their comments and share their ideas on the Internet without fear of legal liability. (There might be some narrow exceptions, of course, but let’s err on the side of freedom.) By analogy, it’s worth noting that existing Internet platforms like Google, YouTube, Facebook, Tumblr, reddit, Amazon, eBay, and Craigslist already enjoy broad legal immunity from liability when they publish information provided by third parties under Section 230 of the Telecommunications Act of 1996, codified at 47 U.S.C. § 230. So why not extend this immunity (either through formal legislative fiat or through piecemeal judicial interpretation) to all Internet users as well?
In a previous post, we asked whether Mark Zuckerberg breached any legal duties or violated any laws when he created Facemash? One theory of legal liability might be the tort of invasion of privacy, since Zuckerberg downloaded and then re-posted pictures of Harvard students without their consent. But Zuckerberg only downloaded student I.D. photos. Does one have a reasonable expectation of privacy to one’s I.D. photo? Another possible theory of liability (both civil and criminal) is copyright infringement. But who owns the legal rights to those I.D. photos, the students or the university? Yet another theory of liability might be based on the federal Computer Fraud and Abuse Act, which prohibits unauthorized uses of protected computers. (The arrest and prosecution of Internet activist Aaron Swartz, for example, were based in large part on this law.) But does it matter that Facemash was just a prank and not a commercial website? Do you think a jury would find a college sophomore guilty of violating federal law in this case?
We are returning to this important book on “Error and the Growth of Experimental Knowledge” by our friend Deborah Mayo. We had started reading her fascinating book last spring and hope to finish it sometime this fall. We consider it a must-read for anyone interested in the philosophy of statistics.
As Denise Callahan explains in this report, What you say on Facebook and on other social network sites can be used against you in a court of law: “Whether it’s a divorce proceeding or criminal trial, posts on social networking sites such as Facebook, MySpace, Twitter, and Skype are regularly popping up as evidence in courtrooms locally and across the country.” But why should this be the case? For example, the law protects most communications between a client and his attorney and keeps those communications confidential from all court proceedings. So, arguing by analogy, should the law also recognize a common law “Facebook privilege”?
This semester, we are using the founding of Facebook, as depicted in the book “The Accidental Billionaires” and the film “The Social Network,” as an in-depth case study to learn about business law and ethics. Lesson 1 of the course will focus on Facemash. In brief, before he started Facebook, Harvard sophomore Mark Zuckerburg decided to start Facemash. For those of you who haven’t read the book or seen the movie yet, Facemash presented the user with two randomly selected pictures of Harvard students–Harvard I.D. photos that Zuckerberg had downloaded on his dorm room computer without formal authorization–and then let the user vote on which one was “hotter.” (You can read more about this infamous incident here.) So, here is the question we will address in Lesson 1: Did Mark Zuckerberg breach any legal or moral duties or violate any laws when he created Facemash?
We are now in the process of writing up a short paper on the subject of “Law & Strategy,” but in the meantime, we would like to share some of our tentative thoughts about this subject. First, we want to lay our cards on the table (or our “priors,” if you prefer). Because of our background in game theory and formal mathematical modelling, we use the word “strategy” differently from the way you and your business law colleagues use the word. Nevertheless, though we generally detest buzzwords, we found the framework of the legal pathways you and your colleagues have developed to be very helpful and illuminating.
With that said, however, here is how we would look at the relation between law and strategy. To begin with, we see business competition as a “game”—i.e. a strategic situation involving two or more players in which the outcome of the game depends on the choices (i.e. “strategies” in the game-theory sense of the word) made by each of the players. Furthermore, one of the key aspects of this game (business competition) are the “rules of the game”—i.e. what moves are legally permissible or not? By focusing on business as a game with rules, we see “strategy” in a different light—as a way in which the game is played. Thus, from a legal perspective, there are at least three ways a firm can play the “business competition game”:
- A firm can play the game within the rules (cf. your compliance pathway).
- It can try to manipulate those rules to its advantage (i.e. exploiting loopholes in the rules).
- Or it can try to change the rules of the game (through lobbying or litigation or other means, such as bribery).
Of course, in reality, most firms will use some combination or mix of strategies, but here we are simplifying and working at a high level of generality in order to paint a picture of firm behavior.