The Regulation of Social Media Influencers, 11 January, Maastricht

BOOK WORKSHOP

11 January 2019
Maastricht University, Faculty of Law 

As people turn away from classical advertising channels such as television, print or radio, social media platforms such as Instagram, Youtube, and more recently Tik Tok, are establishing themselves as marketing outlets in the search of consumer engagement. Powered by the generation of online content by their users, consumers who produce content – or in other words prosumers, these platforms now feature hundreds if not thousands of popular individuals who amass impressive amounts of followers. Active in any possible industries that appeal to their followers, ranging from gaming to pets, lifestyle, beauty or health and fitness, social media influencers continuously create content for their fans to keep them updated on different products and services, in the form of reviews.

On the one hand, empowering users to start their own channels or accounts and be able to gather revenue as an alternative to a classical job sounds promising: there are no market entry requirements, it provides the much-coveted millennial work flexibility, and can be a great alternative if job prospects are dire. On the other hand, influencer marketing raises fundamental legal and moral questions. As a lot of the content posted by influencers on social media is sponsored by the companies behind the products or services they review, without any notification: how should the audience draw the line between honest opinions and paid endorsement? What is more, the business models used by influencers are obscure at best. Most influencers start small, very likely as an individual and not as a freelancer or a business, so it is very difficult to tell who owns a specific account and what their obligations are to their audiences: is it a company that must comply with advertising laws and consumer protection, or is it peers, not bound by the same high standard? What happens with content which entails health risks, such as the promotion of cosmetic surgery or medical products? In addition, given that impressionable children between 7 and 15 are constantly present on social media, should they benefit from any additional protections?

This workshop brings together interdisciplinary approaches to some of the less visible issues posed by advertising on social media, and is supported by the Independent Social Research Foundation, the Maastricht European Private Law Institute and the University of Groningen. Each speaker in the event is currently authoring a chapter in the book The Regulation of Social Media Influencers (Elgar, forthcoming 2019), edited by Sofia Ranchordás and Catalina Goanta. The event will also feature a keynote speech by Madeleine de Cock Buning, Professor (Utrecht University /EUI), Chairman of the Dutch Media Authority (CvdM) and Chair of the European Commission’s High-Level Expert Group (HLEG) on fake news and disinformation.

The full programme and registration are available here. The workshop is free of charge, but places are limited. Registrations will be open until 5 January. For any additional inquiries, you can send an email to catalina.goanta@maastrichtuniversity.nl.

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Robo-liability: the European Union in search of the best way to deal with liability for damage caused by artificial intelligence

Antonia Waltermann and I will be organising a debate on legal personhood for robots at the SSH Synergy conference 2019 (7 February). For a brief overview of some of the issues the event will touch upon, see the following editorial I wrote for the Maastricht Journal of European and Comparative Law:

Robotics is no longer a theme reserved for science fiction movies and technological research institutes. Although most of us do not yet possess a human-looking machine that takes care of our household, robots already play an important part in our daily lives, as search robots, virtual assistants such as Siri or Alexa, programmes that suggest products or services based on our previous purchases or searches etc.

It is difficult to define exactly what a robot is. The concept may refer to machines that carry out identical and repetitive actions. These types of robots have been widely used since the industrial revolution and our current law is fit for dealing with them. More problematic, however, are the robots that possess artificial intelligence (AI), enabling them to ‘learn’ from the information they are programmed with and the actions they perform, and to use this ‘knowledge’ to make decisions in subsequent cases. It is these types of robots that challenge the present legal framework, inter alia in the field of liability law.

Search engines and virtual shopping assistants may cause economic damage to certain traders, by steering potential customers to their competitors; they may affect consumers whenever their suggestions are not accurate or do not meet their needs or preferences. However, the risks and damage caused by self-driving cars or healthcare AI applications may be significantly larger.

The full editorial can be found here.

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How Technology Disrupts Private Law: An Exploratory Study of California and Switzerland as Innovative Jurisdictions

2018 is the first year in history when more than half of the world’s population is online. Since its dawn, the Internet has changed many aspects of daily life. The first wave of the Internet saw a change in communication: the use of e-mails and the rise of Internet browsers facilitated online transactions and marked the beginning of global access to goods. Then came wider access to services, in what is by now called the ‘gig’ economy: Internet platforms started matching demand and supply in sectors such as transportation, tourism and even entertainment. More recently, a new wave of decentralization through cryptography developments in distributed ledger technologies has challenged the fitness of established legal rules and practices and disrupted disrupting the law.

Legal systems have always had adapt to modernity. What is new, however, is that all aspects of human development are moving faster than ever and at an unprecedented scale, with unmatched complexity. By contrast, regulatory solutions for legal questions arising out of technology innovation have been rather slow and random. The legal status of Uber drivers as independent employees has been established in different jurisdictions around the world, but will it also apply to Youtubers? Such case-by-case approaches tend to increase legal uncertainty rather than reduce it. In a recent working paper I completed for the Stanford Transatlantic Technology Law Forum, I looked at a number of private law issues raised by disruptive technologies in two particular jurisdictions: California and Switzerland. The goal of the paper is to map and analyse regulatory responses.

This is an excerpt from a post on the Oxford Business Law Blog. Read the full blog post here.

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Thou shalt not cheat! – Ivey v Genting Casinos (UK) Ltd t/a Crockfords

By Alexandru Daniel On

 

Every once in a while, I have the good fortune of reading a court case which is both fun and educational. The UK Supreme Court case Ivey (Appellant) v Genting Casinos (UK) Ltd t/a Crockfords (Respondent)[1] is one such case, which tells an interesting story, while also explaining to the public the limits of cunning trickery in gambling.

The facts of the case have the flavour of a scene from the Ocean’s trilogy, and hearing Lord Hughes recount the story is a real treat (Lord Hughes delivered the unanimous decision of the court, and a video of the judgment’s summary is available at https://www.supremecourt.uk/watch/uksc-2016-0213/judgment.html).

On the night of 20 August 2012 Mr. Ivey, a professional gambler, together with another professional gambler, Ms. Sun, joined a table of Punto Banco Baccarat at the defendant’s casino (Crockfords). With Ms. Sun’s help, and by employing a technique called “edge sorting,” by 6:41 PM the next day, the claimant had accumulated winnings amounting to £7.7 million.

Punto Banco Baccarat is a game of chance, not skill. Six or eight decks of 52 cards are dealt from a shoe, face down, by a croupier. Ordinarily, the croupier slides two cards to the position of the player (“Punto”) and two to the position of the banker (“Banco”). In certain circumstances, the croupier must deal one further card, either to player or banker, or to both. The goal of the game is to achieve, on one of the two positions, a combination of two or three cards which, when added together, is nearer to 9 than the combination of the other position. Ace to 9 cards count at face value, while 10 to king count as nothing. If the total is over 9, only the last figure of the total counts (e.g. if the player has a 5 and a 7, his combination counts as a 2).

“Edge sorting” is a technique which improves the odds of a player by making it possible to identify high value cards and distinguish them from the other cards coming out of the shoe. The technique becomes possible when the pattern printed on the back of the cards is slightly asymmetrical, due to very small differences which can be observed between the two long edges of a card. If a player can manipulate the circumstances so that for the high value cards one long edge is facing in a certain direction, while for all the other cards the other long edge will be oriented in that direction, then he can drastically improve his odds.

In Punto Banco, the high value cards are 7s, 8s, and 9s. After playing with no advantage through parts of four shoes, Mr. Ivey asked for a new shoe of cards. The new shoe had cards with a pattern on the back which could be manipulated by way of “edge sorting.” Mr. Ivey first asked the senior croupier overseeing the game if he could play with the same cards later if he is winning by the end of the current shoe. The senior croupier accepted, because he was the only one touching the cards[2] and no cards were bent in the process. Ms. Sun then, pretending to be superstitious, asked the croupier to turn certain cards in a different direction from others, saying that she believed that if the croupier would do that, it would change her luck. Croupiers are encouraged by their employers to indulge and play along with superstitious behaviour. It plays in the Casino’s favour if players erroneously believe that lucky charms or lucky practices will work in their favour, when in fact they do not improve their odds at all. Mr. Ivey’s bets were rather modest while this shoe was played, but at the end of the shoe he announced that he was winning and wanted to play with the same cards. After the cards were reshuffled, the accuracy of his bets increased. Although the difference in the two edges was small, with a sharp eye, Mr. Ivey could now see before a card was taken out of the shoe whether it was a high value card or not. He played until the early hours of that morning and in the afternoon of the next day, always with the same eight decks of cards. As mentioned before, his total winnings amounted to £7.7 million before he retired from the game on the evening of the 21st.

The practice after such a large win is for the casino to conduct an ex-post investigation. Before this incident, nobody at Crockfords had ever heard of “edge-sorting.” After reviewing CCTV camera footage, the investigators identified the method used by Mr. Ivey. Following the investigation, Crockfords returned Mr. Ivey’s deposit stake (£1 million), but declined to pay Mr. Ivey’s winnings, arguing that he had cheated. Mr. Ivey then sued the casino to recover his unpaid “winnings.” The trial judge and a majority of the Court of Appeal ruled in favour of the defendant. The Supreme Court, in a unanimous decision, affirmed the two judgments, and rejected Mr. Ivey’s appeal.

The issues addressed by the Supreme Court were (1) the meaning of the concept of cheating in gambling; (2) whether dishonesty was a necessary element of cheating; and (3) what is the proper test for dishonesty, if dishonesty were to be considered an essential element of cheating.

Lord Hughes’ opinion in this case (with which Lord Neuberger, Lady Hale, Lord Kerr and Lord Thomas agreed) is very detailed and carefully written. In summary, it was held that what Mr. Ivey did was in breach of an implied contractual term not to cheat, and therefore he was not entitled to his “winnings”; dishonesty is not a necessary element for cheating; and the proper test for dishonesty is an objective test, using the standards for dishonesty that “ordinary decent people” hold.

The arguments made by Lord Hughes are rich in quotable material and besprinkled with funny analogies. One learns, for instance, that “the runner who trips up one of his opponents is unquestionably cheating, but it is doubtful that such misbehaviour would ordinarily attract the epithet ‘dishonest’”;[3] and “[t]he stable lad who starves the favourite of water for a day and then gives him two buckets of water to drink just before the race, so that he is much slower than normal, is also cheating, but there is no deception unless one manufactures an altogether artificial representation to the world at large that the horse has been prepared to run at his fastest.”[4] Conversely, “the unorthodox lead or discard at bridge is designed to give the opponent a misleading impression of one’s hand, but is part of the game and not cheating;”[5] and, my favourite, “pretending to be stupid at the poker table, so that one’s opponent does not take one seriously, and takes risks which he otherwise might not, may or may not be another example [of deception which does not amount to cheating].”[6]

One striking aspect of Lord Hughes’ opinion is the absence of definitions. “Cheating” and “dishonesty” are treated as “I know it when I see it”[7] concepts. In regard to “dishonesty,” this was made explicit in the judgment: “[D]ishonesty is by no means a defined concept. On the contrary, like the elephant, it is characterised more by recognition when encountered than by definition.”[8] Value judgment on the honest or dishonest character of a person’s behaviour was deemed an issue of fact, not law, to be settled by the fact-finder (jury or judge) according to the standards held by ordinary decent people. “Cheating” was analysed in a similar manner. Defining the concept of cheating was described as “very unwise,”[9] and a “near impossible task.”[10] It was also deemed impractical: what ordinary decent people think “cheating” is changes from case to case, depending on the nature and the particular rules of the game the parties engage in.

Although there were two layers of legal rules governing this case, the Gambling Act 2005 and general contract law, this case was settled in the end by resorting to a third normative layer, composed of the rules and customs inherent to the game of Punto Banco Baccarat. Contract law was the gateway into this third normative system, the question whether Mr. Ivey breached an implied contractual term being contingent on whether he breached the rules and customs of the game. The UK Supreme Court was therefore the ultimate referee in a game of Punto Banco Baccarat.

This was not the first time a supreme court relied on the norms and customs of a game in order to settle a legal dispute. The French 1972 case of Rochman v. Durand[11] was decided on the basis of the customs of the game of football. This was a tort case, wherein the victim suffered injuries as a consequence of a collision with the goalkeeper of the opposing team who fell on the ball with the intention of saving it. Because this was a perfectly normal tackle and in line with the rules of the game, the goalkeeper was not at fault, and therefore the claimant’s tort action was dismissed.

However, such cases are rare. The Supreme Court cannot make determinations on the rules and customs of a game in any given circumstances. The dispute must first be framed in a legal manner; an access point into the legal system must be found. It would be hard to imagine, for instance, a case in which the Supreme Court would settle a dispute regarding the offside trap in football. But who knows?

[1] [2017] UKSC 67.

[2] When players touch the cards, the practice is that those cards are discarded and not used again.

[3] [2017] UKSC 67, at para. 45.

[4] Id.

[5] Id. at para. 46

[6] Id.

[7] “I know it when I see it” is Justice Potter Stewart’s famous test for obscenity. Jacobellis v. Ohio, 378 U.S. 184, at 197 (1964).

[8] [2017] UKSC 67, at para. 48. See also Id., para. 53.

[9] Id. at para. 47.

[10] Id.

[11] Cass. 15 May 1972, D. 1972, 606. An English translation is available at https://law.utexas.edu/transnational/foreign-law-translations/french/case.php?id=1202

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Can an agreement that was void at any moment due to a violation of competition law be revived?

Crosspost from Monard Law

When a court invalidates an agreement because the rules of contract law were violated (for example because the agreement was concluded as a result of a mistake or deception), then that agreement is deemed to have never existed. It was never valid and never will be valid. Aside from a few exceptions, everything that has already been performed under the agreement must be undone. If an agreement is invalidated for violation of competition law, the consequences are less clear.

It is possible that at the time of concluding a contract the agreement is already in violation of Belgian and/or European competition law because, for example, a producer imposes minimum selling prices on a distributor. In that case, it is also deemed that the agreement never existed.

However, it is also possible that at the time of its conclusion, an agreement benefits from a competition law block exemption, such as exists for distribution agreements, technology transfer agreements and so forth. The agreement is then deemed not to be in conflict with Belgian or European competition law.

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10 Years After Romania’s Accesion to the EU: European Contract Law (Doctrinal and Empirical Observations)


The Maastricht European Private Law Institute and the Legal Research Institute of the Romanian Academy (Centre for the Study of European Law – CSDE) are organising a conference on current issues of European contract law. 2017 marks a decade after Romania’s accession to the European Union, which is a meaningful moment for legal researchers to evaluate various aspects in different sub-areas of private law with respect to the development of the Romanian legal system as a legal system of the European Union.

The conference will include both doctrinal and empirical observations on European contract law. At the same time, the conference will serve as a dissemination platform for the first empirical study on the application of European law by Romanian national judges.

The event will also honour Prof. Nicolae Turcu, the former president of the Romanian Legislative Council’s Civil Law Section, who passed away earlier this year, to the grief of both legal academia and practice.

The full programme of the event can be found here (in Romanian/English).

Registration requests can be sent to ardae2007@gmail.com until 20 October 2017.

The conference is free of charge.

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