Rolf H. Weber

Shaping Internet governance : regulatory challenges

Historical Developments.- Organizational Framework in Internet Governance.- Philosophical and Sociological Environment.- Discussion Topics of Internet Governance.- Regulatory Issues.- Concluding Obervations.

Legitimate governing of the internet

Numerous discussions on internet governance have revolved around the prevailing issue of legitimacy aspects, not least due to the fact that the internet is not confined to technical issues, but also implies policy-making decisions. In the course of addressing legitimacy in international governance, the tendency to rely on democratic principles can be identified. Such an approach, however, should be subject to enhanced scrutiny, since perceptions of both democracy and legitimacy vary and run the risk of merely replacing one complex and vague generic term by another. Furthermore, no quick solution can be expected from adherence to the general concept of multi-stakeholderism either. The questions remain, how players can be designated, procedures ensured and outcomes secured that are deemed legitimate. New approaches are welcome and will need further elaboration to pave the way forward towards a generally accepted, stable internet governance framework complying with legitimacy expectations raised by the various stakeholders concerned.

Border Tax adjustment – legal perspective

Border tax adjustment is a second-best solution for improving climate mitigation measures as long as international cooperation does not function to a satisfactory degree. However, the implementation of such measures can legally be problematic under the angle of the legal framework of the World Trade Organization (WTO) which aims at liberalizing international trade and at avoiding trade barriers. In particular, border tax adjustment might come into conflict with the National Treatment principle and the discipline on subsidies. These legal problems can only be overcome if the specific legal justification reasons provided for in WTO law for the promotion of climate sustainability (such as conservation of exhaustible resources and protection of human, animal or plant health) are interpreted in a broad way.

Shift of legislative powers and multi-stakeholder governance

Since governance is changing under conditions of interconnectedness now happening and new approaches of rule-making structures need to be taken into account, the multi-stakeholder-approach with its inclusion of all stakeholders involved in the governance process has become a much discussed topic primarily in the context of the internet governance debates. Requiring a high level of competence and expertise, modern rule-making processes depend on the joint involvement of all stakeholders having the necessary expertise. As to that, possible legal approaches for including both state and private actors into lawmaking frameworks need to be developed. Considering first attempts of realising this subject, as for instance the Guiding Principles on Business and Human Rights published by John Ruggie, the Special Representative to the Secretary-General of the United Nations, or the Governmental Advisory Committee’s influence on the Internet Corporation of Assigned Names and Numbers, the conclusion can be drawn that different models of rule-making processes attempting to overcome the prevailing governance and participation gaps need to be realised.

Emission Trading Schemes: A Coasean Answer to Climate Change?

Emission Trading Systems (ETS) have long been appraised as the most economic efficient policy instrument to tackle climate change. In their theoretical construction, ETS draw upon the Coase theorem stating that environmental protection should be left to the forces of the free market through an economically efficient allocation of property rights. The current ETS, however, are a problematic implementation of Coase ’s theory, with structural deficits leading to high transaction costs and undermining cost-effectiveness. This contribution provides an overview over the theoretic foundations underlying market-based mechanisms, illustrates current deficiencies and presents potential improvements.

Three Models of the Bank's Fiduciary Duty

Legal systems impose varying degrees of fiduciary duty on the banks. This paper analyses three models, thereby pointing out the differences between them. First, the Anglo-American model, which does not inherently consider the bank-customer relationship as a fiduciary one, yet it states exceptions to the rule. Second, the continental European model, that defines specific cases in which a fiduciary relationship exists. Third, the Israeli model, which applies the fiduciary duty to the bank-customer relationship as a whole and therefore states the widest standard of conduct for the banks. This paper concludes that a certain harmonization of the principle would be beneficial to the financial markets.

Investment Suitability Requirements in the Light of Behavioural Findings

The findings of behavioural finance research Have undoubtedly influenced the traditional understanding of the processes and patterns that allow the financial markets to function. (A good collection of early key papers is Kahneman et al., Judgment under uncertainty: Heuristics and biases, 1982; see also Kahneman and Tversky, Choices, values, and frames, 2000; legal implications stemming from behavioural findings are described by Korobkin and Ulen, Calif Law Rev 88:1051–1144. See also Moloney, How to protect investors: lessons from the EC and the UK, pp. 67–74, 2010 regarding the irrational and uninformed investor) Perceptions, which used to be based on the assumptions of rational behaviour gradually allow for human flaws (Cunningham, Wash.Lee Law Rev 59:836, 2002 resumes that behavioural finance is “a marriage of cognitive psychology and the financial economics of market inefficiency”). Not only the structural information asymmetries between the various financial market participants interfere with the efficient allocation of capital; moreover, there is also a need to address other factors that may substantially influence markets, such as emotions, reference biases, overconfidence and inertia impair rational choice (However, the role of psychology in economics was already discussed by Keynes, The general theory of employment, interest, and money, p. 315, 1936 referring to animal spirits (162) and unrealistic optimism or pessimism as causes for booms and busts). Since such insights from the field of behavioural economics are often not in line with the common legislative model developed on the basis of the rational investor concept, the question arises which possible reactions of the law (especially of financial market law) to the insights provided by other disciplines might be valuable (An interesting exemplification showing the reaction of law in response to biased decision-making processes is the justification of the business judgment rule as a yardstick which can be seen as a limitation of the hindsight bias that otherwise would affect the judges; see Rachlinski, University of Chic Law Rev 65:574, 1998: “For example, in corporate law, the business judgment rule protects corporate officers and directors from liability for negligent business decisions because, in part, of the tendency for adverse outcomes to seem inevitable” and p. 625: “The business judgment rule and subsequent remedial measures rules, for example, make a great deal of sense as a response to hindsight bias”). Today’s approach towards the point-of-sale (POS) regulations for investment advisory and portfolio management services includes a mandatory assessment regarding the individual appropriateness and suitability of financial investments (Already Rapp, Ohio North University Law Rev 24:189, 1998 stated in relation to financial industry standards of conduct that none is “more frequently cited, and least objectively applied, than the ‘suitability’ requirement”). The following analysis of presently debated regulatory code-of-conduct-requirements fostering investor protection is based on behavioural findings.

Anonymity Challenges in the Internet

Since information about people acting in the Internet (both, consciously or unconsciously provided by them) can be easily found, surfing on the World Wide Web is far from an anonymous activity of no consequences. With regard to the therewith associated risk of data abuses it is still a debatable point, whether the identification in the online world is essential, and if so to what extent, or whether there is a right to act anonymously within the World Wide Web.

The role of the financial services industry in the clean development mechanism: involving private institutions in the carbon market

This paper highlights the functions performed by the financial services industry in the clean development mechanism (CDM) of the Kyoto Protocol. The CDM enables industrialised economies to meet their emission reduction targets while supporting environmental projects in developing economies. Since the Copenhagen Summit did not give a satisfying response to the future prospects of the carbon market, reliance has increasingly been placed on private actors in order to keep developing the carbon market architecture. Financial institutions are involved in the CDM market as pooling and transferring economic resources in order to develop CDM projects; they can also enhance market liquidity while trading carbon certificates. The financial services industry is active in the CDM market, providing evidence of the necessity to encompass private institutions in the efforts to tackle climate change. This paper shows the benefits of financial intermediation in the CDM market and also explains some shortcomings.

Governance of the Internet of Things

“Governance” can be traced back to the Greek term “kybernetes”, the “steersman”, and the Latin word “gubernator” leading to the English notion “governor”, therefore addressing aspects of steering or governing behavior.317 Different disciplines have addressed governance issues which, in a nutshell, can be summarized as the discussion on the appropriate allocation of duties and responsibilities as well as the proper structuring of the concerned “organs”, thereby balancing performance-based strategic management and financial/economic control. 318 Or in other words: “Governance, at whatever level of social organization it may take place, refers to conducting the public’s business − to the constellation of authoritative rules, institutions and practices by means of which any collectivity manages its affairs”.319