Jane K. Winn

Relational Practices and the Marginalization of Law: Informal Financial Practices of Small Businesses in Taiwan

There is a significant relationship between Taiwan’s rapid economic development and indigenous Taiwanese social practices and ideas about law. This relationship has generally been misconstrued or overlooked by much of the academic literature discussing Taiwan’s economic “miracle.” Networks of interpersonal relationships have played a significant role in promoting economic development, while the ROC legal system has often been reduced to a role of enabling those relationships rather than establishing the kind of universal normative order often associated with the idea of a modern legal system. A substantial component of Taiwan’s economic development has taken place in the informal sector, outside the purview of the ROC legal system. This study is the first attempt to develop a systematic account of the marginalization of Taiwan’s modern legal system and the concomitant heightened significance of alternatives, such as networks of personal connections or informal surrogates for legal regulation, in contributing to Taiwan’s rapid economic development. The role played by the ROC legal system in indirectly supporting relational practices is not one that can readily be expressed in terms of legal theories constructed to account for the relationship between law and development in Western nations. The conflict between contemporary Taiwanese social reality and liberal-democratic theory, when recognized, is usually followed by exhortations for the Taiwanese system to further modernize, thus resolving any conflict in favor of the Western model. If, however, Taiwan’s system is not so much moving toward convergence with Western models as developing along alternative lines, then analyzing how formal legal institutions in Taiwan are marginalized may better explain processes of economic development and democratization in many nations outside the Western legal and political tradition.

Are 'Better' Security Breach Notification Laws Possible?

Security breach notification laws (SBNLs) may have succeeded in bringing the issue of inadequate information security to the attention of American consumers, but do not appear to be having much impact on the way that American businesses store and use sensitive personal information. This failure is not surprising in light of the extremely limited scope of American SBNLs, which generally do not reinforce an underlying right to privacy but instead only mandate disclosure of information that is confusing and difficult for consumers to make use of. While receiving repeated notices of security breaches might someday galvanize American public opinion to support stronger information privacy laws, that would be a remote and uncertain benefit from legislation that appears in the short term to penalize responsible businesses while being disregarded by unsophisticated and irresponsible ones. Although businesses in possession of sensitive personal information are exposed to something like strict liability for security breaches, the vendors of the information technology systems that are vulnerable to breaches remain exempt from liability. SBNLs generally commit no public resources to ensuring compliance, reducing the risk that non-compliance will be detected to near zero for many businesses. Under such circumstances, most businesses have no economic incentive to comply with a law when compliance would be very costly. Even though litigation claiming damages following a security breach notification has not been successful to date, the risk of being exposed to such litigation as a result of compliance further increases incentives for non-compliance. This paper reviews the development of new governance approaches to regulation, including “responsive regulation,” “smart regulation” and “better regulation” and then applies new governance criteria to SBNLs to show why they are unlikely to have much impact on the information security policies of many American businesses. This paper reviews the practical problems that any business faces when trying to secure large quantities of sensitive personal information, and outlines what a “better regulation” approach to information security regulation targeting sensitive personal information might include.

Clash of the Titans: Regulating the Competition between Established and Emerging Electronic Payment Systems

This article equates the providers of traditional electronic payment services with the Titans of Greek mythology, and the providers of new electronic payment technologies with the Olympians. Professor Winn concludes, however, that unlike the Titans of Greek mythology, these modern Titans appear to be winning in their battle with the upstart Olympians. This article describes the fundamental characteristics of payment systems, reviews the applicable law, and describes the new technologies that were, until quite recently, expected to displace older electronic payment systems. Consumers and merchants, by and large, are happy with the existing regulatory structure. And, because of the failure of new technologies to gain significant market share yet, regulators have not yet been obliged to revise existing regulations to take account of these new technologies.

Us and EU Regulatory Competition and Authentication Standards in Electronic Commerce

This article examines the role of law reform in promoting the development of technical standards for the authentication of parties engaged in Internet commerce. Law reforms intended to improve the security of Internet commerce can only succeed if they address business, technical and legal issues simultaneously. The EU has used commercial law reform and formal standard development to coordinate work on authentication standards, while the US has allowed the market to determine what type of authentication technology is appropriate and has left the development of standards to private consortia. While the EU approach may solve collective action problems more effectively, the US approach may discover end user requirements and may allow business judgments about risk to inform the law more effectively. Neither approach has yet resolved the authentication problems facing businesses engaged in online commerce.

Social networks and electronic commerce in China

Communications technologies that make up the emerging global information infrastructure have the power to regulate online behavior. Social networks in Chinese society have survived the growth of formal legal institutions and liberalization of Chinas economy, but it is not clear whether they can survive the regulatory pressures created by global information technology networks. The spread of electronic commerce technologies in China may strengthen legal institutions and open local markets to international competition, but is likely to be resisted by all the same interests that resist those changes in other contexts. The Chinese response to the spread of electronic commerce might take several forms: assimilation; marginalization; or localization of new forms of commercial activity that rely on new technologies.

The Emerging Law of Electronic Commerce

In this chapter, I define the scope of electronic commerce law and discuss how law can evolve in response to rapid change in social and business practices. I summarize how commercial law has adapted to electronic sales of goods using EDI and Internet distribution systems, discuss the strengths and weaknesses from a legal perspective of a new technology-based model for electronic commerce - digital signatures and public key infrastructure - and compare that model with others for managing the legal risks of electronic sales of goods. I also summarize how changes in payment system technologies and bank practices have produced new laws governing electronic payment systems; and how financial markets have moved to electronic systems for transferring investment securities.

Patents and Standards in the ICT Sector: Are Submarine Patents a Substantive Problem or a Red Herring?

This article examines the role of law reform in promoting the development of technical standards for the authentication of parties engaged in Internet commerce. Law reforms intended to improve the security of Internet commerce can only succeed if they address business, technical and legal issues simultaneously. The EU has used commercial law reform and formal standard development to coordinate work on authentication standards, while the U.S. has allowed the market to determine what type of authentication technology is appropriate and has left the development of standards to private consortia. While the EU approach may solve collective action problems more effectively, the U.S. approach may discover end user requirements and may allow business judgments about risk to inform the law more effectively. Neither approach has yet resolved the authentication problems facing businesses engaged in online commerce.

Can China Promote Electronic Commerce through Law Reform? Some Preliminary Case Study Evidence

This article analyzes legislation recently enacted in China to promote the use of electronic commerce among Chinese businesses. It reviews the terms of regulations to promote the use of accounting software by Chinese firms, the electronic commerce enabling provisions of the 1999 Contract Law and the 2004 Electronic Signature Law in light of their relationship to Chinas economic development goals and their impact on Chinese businesses. It contrasts the success of the accounting software regulations with the limited impact of the Contract Law provisions and the dim prospects for the Electronic Signature Law. While law reform generally may be of limited use as a policy instrument to promote the use of electronic commerce technologies by Chinese businesses as long as the transition to a market economy remains incomplete, these case studies suggest that law reform based on an accurate understanding of the conditions Chinese businesses face has a better chance of success than legislation based on foreign models which in turn were based on conditions in developed market economies which differ significantly from those in Chinas transition economy.

Islamic Law, Globalization and Emerging Electronic Commerce Technologies

Network effects created by the use of electronic commerce technologies may put pressure on the community of the Muslim faithful to assimilate into global markets that do not comply with the requirements of Islamic law. At the same time, however, they hold the promise of greater access to global markets constituted in a manner that comports with Islamic law. There are significant structural differences in commercial transactions conducted in conformity with Islamic law and those conducted according to Western secular norms. As a result, the automation of Islamic commercial transactions will require the development and implementation of significantly different technical standards. Many Muslim countries now have low penetration rates for electronic commerce technologies, and the development of technical standards to support automated transaction processing in a manner that conforms to Islamic law does not appear to be a policy priority in those countries. If such standards are developed, then strategy and relative bargaining power will determine whether secular Western organizations wishing to trade with Islamic organizations are required to implement both Western and Islamic technologies in order to gain access to markets in Islamic nations, or organizations in Islamic nations are required to implement both in order to gain access to global markets.

Mobile Payments and Financial Inclusion: Kenya, Brazil, and India as Case Studies

Although financial inclusion is now recognized as an essential element of any economic development strategy that includes poverty reduction, a majority of the world’s poor remain excluded from formal financial services. Since 2007, the Kenyan mobile payment scheme M-Pesa has captured world attention as a financial inclusion success story, although no other countries have been able to reproduce that success. This paper considers the impact of the regulatory environment on mobile payments as a channel for delivering inclusive financial services using Kenya, Brazil and India as case studies. While Kenya succeeded in rapidly increasing financial inclusion, the Safaricom mobile network operator offering the M-Pesa service ended up controlling 99% of market for mobile payments, posing challenges for regulators and prospective competitors later trying to dislodge it from its dominant position. By contrast, Brazil made slow and steady progress toward achieving 99% financial inclusion among recipients of its Bolsa Familia social welfare program through incremental improvements in its legacy electronic payment systems and by creating a network of business correspondents for banks. Progress in India has been slower as a result of adopting a broad perspective on financial inclusion and pursuing multiple initiatives simultaneously, but inclusive financial services in India may finally be poised to take off. Early attempts to regulate mobile payments and business correspondents erected regulatory and technological barriers to their adoption, but the new “payment bank” regulatory framework may finally have removed those barriers for good. In partnership with the banking industry and to promote competition, India has created an open, public platform for clearing and settlement of electronic payments, and has begun using the new RuPay card network together with the new Aadhaar national identity scheme to deliver direct benefit transfers to the poor.