private ordering
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Private Ordering Principles, February 2004
PRINCIPLE OF PRIVATE ORDERING
This document was written by Dr. ichael !irnhac", o# the $ai#a %enter o# &aw '
Technology at the Faculty o# &aw, $ai#a (niversity, #or the wor"ing group on private
ordering, o# the )sraeli )nternet *ssociation +)O%-)&.
The document re#lects the views o# the members o# the wor"ing group/ r. oni !ass, Dr.
*mir 1tioni, *dv. eyTal 3reiver-chwart, s. haula $aitner, *dv. $aim avia, r.
Daniel osenne, r. ehoshua aor.
* comment #or the non-)sraeli reader/
The following document is the initial phase of the private initiative of the Israeli
branch of ISOC. Other than administering the .il domain names, ISOC is involved in
several public activities, such as bridging the digital divide, assisting people with
disabilities to access the Internet etc.
The Israeli legal system is one of common law, and is heavily influenced by US law.
Thus far, no specific Internet laws have been enacted (i.e., no C!, CO"!, CI"!
laws, and no #C!, CO""! ones either$. %owever, several Israeli courts had little
difficulty declaring that the law applies to the digital environment, and turned to the
&uestion of how to enforce such laws. In this course, there is an emerging body of law
regarding various issues, such as IS" liability, copyright, 'urisdiction etc.
!t the same time, there are attempts by private entities to create codes of conduct
for various activities. #ost notably, is the Israeli "ress Council)s (a private, non*
statutory entity$ decision to impose its Code of +thics on to Online ewspapers, a
term deliberately left undefined, even if these do not accept the Council)s authority todo so.
On this bac-ground, ISOC attempted to create a set of general principles for private
ordering. It was made public in ebruary /001, and a call for comments was
simultaneously issued (http233www.isoc.org.il$.
The members of the forum which discussed these principles are from various fields2
!ass and $aitner are members of ISOC)s 4oard5 1tioni is the chairman and 3reiver-chwart is ISOC)s legal advisor. avia is a prominent attorney who speciali6es in Internet
law5 osenne is a former general director of the #inistry of Communications, and aor is the
former C+O of I4#*Israel. !irnhac" teaches law at the University of %aifa, and is the co*director of the %aifa Center of 7aw 8 Technology.
** #ichael 4irnhac-, #arch /001.
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http://www.isoc.org.il/http://www.isoc.org.il/
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Private Ordering Principles, February 2004
PRINCIPLE OF PRIVATE ORDERING
Executive Summary
Private Ordering is the process of setting up of social norms by parties
involved in the regulated activity (in some manner$, and not by the State.
Private Ordering aims to achieve public goals, such as efficiency, enhancingthe mar-et, and protecting rights.
Private Ordering has the advantage over public ordering in that it is set by
active players in the mar-et, including citi6ens and consumers, and in that in
some cases, it can preempt intrusive and populist legislation. Thus, Private
Ordering may protect human rights.
Private Ordering is especially suitable for the dynamic digital environment, in
which most activities relate to information. Private Ordering reduces the
constraints imposed on freedom of speech, while protecting privacy, and
fulfilling the democratic potential of a distributed networ-.
Private Ordering must adhere to the principle of voluntary acceptance. It can
be imposed only on those who have agreed to subordinate his or her activity
thereto. on*voluntary imposition of Private Ordering will bring about the
failure of the entire Private Ordering s scheme.
Private Ordering aims to e:press a wide consensus, and hence its details
should be agreed upon in an open, public, transparent process, in which as
many relevant players as possible participate, including commercial parties
and citi6ens3consumers. The procedures of Private Ordering should includemechanisms to prevent abuse, and mechanisms to identify consent among
participants.
Private Ordering should be composed with a full awareness of the possibilities
created by technology, its positive as well as negative features, and only after a
clear identification of the goal to be achieved. The social and technological
conte:t of each sector of the activity to be regulated should be pre*e:amined,
and there should be an attempt to identify possible negative conse&uences in
advance. Special attention should be given to users) rights, such as their
freedom of choice, free speech rights, the freedom to access free information,
use it and share it with others, protection of privacy and the li-e.
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Private Ordering Principles, February 2004
A. General Principles9. De#inition2 Private Ordering is the process of setting of social norms by
parties involved in the regulated activity (in some manner$, and not by the
State. ;egulation, whether public ordering or private ordering, aims to achieve
certain public goals, such as efficiency, enhancing the mar-et, and protection
of human rights.
/. Public Ordering 2 ;egulation which stems from the State is public ordering ,
since its authority derives from the public, which acts through official state
organs, such as the legislature, the e:ecutive and the 'udiciary.
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B. Private Ordering in a Digital Environment 9. The digital environment has several uni&ue characteristics, which differentiate
it from other mar-ets. #ost of these features strengthen the preference of
Private Ordering over public ordering.
/. The )mportance o# Public Ordering 2 It should be emphasi6ed that "ublicOrdering is not wrong per se and is not irrelevant. On the contrary. In many
fields of human activity, the most effective way to achieve a desired public
goal (economic, social or other$ is still legislation or another form of public
ordering. urthermore, in some circumstances, Private Ordering is not the best
approach. It may suffer from various wea-nesses.
. )nterests and $uman ights2 Social interests, worthy of protection, are also
relevant in the intermediate period, in which the mar-ets evolve. These
include, but are not limited to, free speech, privacy, consumer protection,
protection of minors etc. urthermore, even according to supporters of the free
mar-et, there might be mar-et failures which 'ustify interference, such as anti*
competitive behavior. Therefore, the social interests at sta-e should be
identified and protected.
?. De#ining the 3oal o# egulation2 The above statements provide us with some
instructions (guidelines$ as to the content of the regulation (whether public or
private ordering$2 clear identification of the goal or interest to be protected, is
of supreme importance. The means should be tailored to fit the goal. There is
an advantage for technology*neutral rules, since the alternate$ choice would
soon render the rules irrelevant. In other words, there is an advantage to state
the regulation as general principles or standards, rather than as particular rules.
There is of course a price of ambiguity in such a choice.
@. )n#ormation2 The main resource in the digital environment is information.
Information is the core of the Internet in at least two ways. irstly, the flow of information is essential for the successful functioning of the mar-et, and
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especially of e*commerce. The transparency of information minimi6es
situations of abuse of power and enables greater competition. Secondly, much
of the online activity is that of transferring information2 browsing, uploading
and downloading files, sharing files of various sorts, e*mail etc.
A. The 1conomic and Democratic 7alue o# )n#ormation2 The meaning of the previous section is that almost any online activity affects the functioning of the
mar-et. Supporters of the free mar-et are in favor of the free flow of
information. !nother central aspect, is that almost any communicative activity,
i.e., transfer of information, raises fundamental constitutional issues.
Transferring information is a matter of freedom of speech. ree speech is a
basic human right in liberal democracies. The principle of free speech has
many aspects, and it is meant to assure, inter alia, the right of every person to
e:press him3herself freely (where the e:pression can be literal, te:tual or in
the form of writing code$, the right to access information, and the right to
-now about the government)s actions (i.e., OI!$.
90. The &imits o# Free peech2 It is important to recall that the e:istence of a
principle of free speech, and the very e:istence of speech, does not imply that
the activity cannot be regulated. reedom of speech, as the Supreme Court
dictated, is not absolute Boriginally, this was written in regard to the Israeli
Supreme Court, but applies to many other courts in liberal democracies,
including the US * #4. The e:act ways in which these limitations can survive
scrutiny was carved in the case law, and need not be rehearsed here. %owever,
the very e:istence of speech in the regulated arena re&uires e:tra caution in
any -ind and form of regulation. The speech at sta-e should first be
recogni6ed, a tas- which is not always that easy.9
99. The )mportance o# Free peech2 Civil libertarians) observation of the presence
of speech in the digital environment, and hence of the principle of free speech
is yet another reason to -eep the State out of the digital sphere. Dhen the State
regulates activities that also have speech elements, this is often viewed as
censorship. %ere lies yet another advantage of Private Ordering 2 since it does
not stem from the State, there is no governmental abridgment of free speech.
9/. The Threats to Free peech2 It is crucial to reali6e that threats to free speech
stem not only from the State, but from the private sector as well. This threat
has been identified in close conte:ts and addressed. 7imitations on cross*ownerships of media outlets serve as an e:ample. The concern here is that
mar-et powers will harm free speech. The advantage of Private Ordering is
that it reflects a wide consensus of the various players. %ence, the importance
of voluntary acceptance of Private Ordering (see in#ra, section .9$, and
hence we should be aware of the notion of non*governmental harm to free
speech. This latter insight should guide the process of accepting particular
Private Ordering (see in#ra, section ./$.
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See e.g., the #C!, which limits the development of certain -inds of technology (anti*circumvention$. If we accept the argument that code is speech, than the #C! is a limitation of speech.
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v. &eading the Process2 In any field chosen as a candidate for Private
Ordering , a public figure or figures should be chosen to lead the
process, by setting the agenda, preventing abuse, encouraging
participation, and setting the mechanism of consent. Private
Ordering suffers a wea-ness at this point, as without public
legitimacy for the leaders of each process, it is doomed to fail before it begins.
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v. From Private Ordering to Public Ordering 2 It should be
remembered that it often happens that an ethical rule becomes a
legal rule. Courts occasionally adopt the ethical standard as an
indication for the social norm in the relevant field (such as in
the case of interpreting the concepts of negligence, public
good, bona fide and the li-e$. !ccordingly, one should becareful when creating Private Ordering , and especially those
who wish to thwart governmental interference.
=. The *ptness o# Private Ordering to the egulated Field or *ctivity2 The
utmost fle:ibility should be maintained in regulating each field or activity.
+ach topic has its uni&ue considerations, which re&uire specific attention.
i. tandard or ules2 Standards enable fle:ibility and easy
adaptation to changing circumstances, but suffer from
vagueness. In some cases specific, accurate rules should be
adopted, even though they might be infle:ible.
ii. *chieving the 3oals2 ifferent topics re&uire different means to
achieve the goals. In some cases an investigation will suffice, in
others a public condemnation or another sanction will suffice.
There is no room for a singular method of achieving the goals.
iii. eals2> One of the means to achieve the goals of Private
Ordering can be the creation of a seal program. The seal should
be simple (and can also serve as an image lin- to another web
site$. The seal will indicate that the web site chose to sub'ect
itself to a particular set of the Private Ordering scheme. Thus
for e:ample, in the case of accessibility to people with
disabilities2 a web site which follows the rules of Private
Ordering in this field will be able to present the seal. The seal is
a simple manner to address all parties) interests2 the site will be
a sign of e:cellence5 able to users will be able to easily identify
the web site)s policy. The seal also enables a relatively easy
way to e:amine whether the site fulfills its commitment to the
Private Ordering scheme. ! site which does not fulfill its
commitment will not be allowed to present the seal, and
trademar- law will provide enforcement. The seal will belimited to the particular rules of Private Ordering , and will not
be an approval of the content or of the service provided.
iv. The particular rules of Private Ordering in each regulated field
should include rules as to the relationship between the body
that initiates the rules and the parties that accept them
voluntarily. These should include, inter alia, immunity of the
private regulatory body, ways of 'oining and e:iting the
scheme, details regarding a seal where it is used etc.
> This method is roughly based on the privacy seal programs in use in the US, such as Trust+. F #4.
A