Examination of Witness (Questions 100
WEDNESDAY 9 FEBRUARY 2000
100. I am sure every member of the Committee
has taken that point. Within the context of the EC does individual
ownership of intellectual property on the Net actually exist and
is it worth doing anything about it, which is what the EC and
this government are intending to do?
A. It does exist, as I am sure you know better
than I. The Copyright Bill coming out of the 1997 WIPO meeting
to do digital copyright extends in quite logical ways to digital
works. With many of the traditional copyrights there are a variety
of people who have been sued quite successfully over pirating
digital works. It does exist. There are also hidden in the bowels
of the legislation some quite controversial points in terms of
who bears responsibility for what. Again, I am sure you know better
than I the notion of when a cached version of a work is held on
a computer in transit, if the message is in violation of copyright
is the cached version in violation of copyright? While it may
be a technical detail it has vast potential consequences for shared
liability. Frankly, I have had lobbyists from Microsoft and the
software service providers saying, "We want this in there
solely so that we can sue the telcos to make them more responsive
to us", and the telcos quite legitimately are saying, "We
do not really want to be sued. It is not our responsibility. It
is going to raise the cost of these services dramatically if we
have to try to enforce this and, given that cheap services are
economically beneficial, why should we?" Sorry: long answer
to your question, but it shows some of the complexities.
Lord Cavendish of Furness
101. I am interested by the calm way in which
at this momentand this is not criticalwhen people
are looking every day for more redress, for more protection, we
are getting the stark message that we are about to face an age
of much less protection, more disorder, less redress.
A. More personal power.
102. These are the stark facts. If there is
some historical precedent for the fact that with these great shifts
in the way people conduct their business moralities do develop,
is it possible that the First Tuesdays of this life can become
a sort of Law Society for the legal profession and try that?
A. I have never thought of that one.
103. I have confidence in the law because of
the Law Society. I may be wrong.
A. It is a very important point. The distinction
I would draw to some extent is between standards and conventions
because of things like First Tuesday and networks and because
of the speed of communication across the Net. It is very easy
to create conventions. Indeed, the Internet is a convention. It
has voluntarily adopted standards that are not imposed by a committee
or by a standards organisation. There are things people agree
to do in the same way in order better to work together. Because
of the speed of communication and feedback the good news is that
it is very easy to catch, to comment on, to give feedback to violations
of those conventions. Fraudulent websites, bad information, dubious
argument, are all chased across the Web right, left and centre.
That is not to minimise the problem that there is a lot of dubious
argument and bad information out there in the first place but
there is a redress to it.
Lord Woolmer of Leeds
104. Could I return to your paper which was
most interesting? In one or two places you appear to be saying,
and I would not want to put words in your mouth, that perhaps
one of your principal concerns is that where there are regulations,
not specifically aimed at e-commerce and the Net and so on, but
about employment, about taxation and so on, your desire would
be that at least they were consistent and harmonised rather than
getting into a great deal of argument about whether taxes should
be lower or higher, but whatever they were it is much more important
that they are harmonised. If there were an order of priorities
would that be your first priority?
A. I think I would be very disappointed if harmonisation
went upward. If you had for example French employment law, Spanish
company law,I cannot think of a British example because
by and large I cannot think of too much to complain aboutthen
you would have the worst of all possible worlds. In general, assuming
that you do not manage uniquely to capture the worst of every
jurisdiction, harmonisation is at least as important as, if not
more important than, any specific inclusion. Harmonisation is
predictability. It is the ability to know what you are going to
do, understand what the set of issues and problems is and do it,
105. If I may return to the medical analogy,
am I right in thinking that what the technology revolution has
done is simply to transform and reduce the cost of obtaining information
and transmitting information? One has always for a long time been
able to find out where one can get medicines outside your own
jurisdiction, if you work hard enough at it, and you could probably
get somebody to send it to you, but what the Web does is enable
you very easily, very quickly, very cheaply, to find out that
information. It is not that there has been a change in the various
legal relationships except that your access to the information
and the number of people who access it is very much cheaper and
hence more widespread. Is that fair?
106. In the past the ways of regulating would
have been either to seek to regulate the provision of information
and the Web enables people to leap over that because you can access
the information, but historically you could then (and I am not
suggesting you should; I am clarifying my mind) seek to prevent
the sending of the physical goods if you were buying goods as
opposed to services. You would seek to prevent those coming across
the border. For example, I am sure the Chinese can find out where
they can buy medicines from America, but getting them into their
homes in China would be regulated by the Chinese authorities in
the way in which they have always been. Is that a fair picture
of where we are?
A. Yes. One of the solutions to the original
problem of censorship is to turn the solution on its head. With
broadcast mediums you censor the transmission of information which
is very difficult if not impossible on the Web, but the Web does
give you a variety of ways to limit the reception of information.
The software that schools are using for example prevents my son
and other children from bringing in websites. There is a variety
of ways of protecting stuff. The medical example is a particularly
good one because it does show some of the leakiness. Of course
you have to face up to the fact that it is going to be hard to
do. Let us be honest. This is not entirely a new problem and technology
is not entirely creating it. There are tons and tons of blatantly
illegal drugs, not just semi-legal drugs, which are coming across
the border on any given day despite efforts to stop them.
107. Can I turn to the concrete issues on this
theme of harmonisation as opposed to no regulation at all? From
your point of view, looking at the industries, do you think there
are issues on intellectual property, on host/home country, of
taxation, in other words, if there is going to be taxation in
the world, if you need public services at all, to have some form
of taxation that does not simply get swept aside by leapfrogging
in and around all this? Do you think that those are issues that
governments, EU or otherwise, still legitimately need to address?
If so, how do you think governments can seek to find a level playing
field that does not in the process of doing that cause problems
for the new technologies?
A. We are still at the very early stage of understanding
what the landscape is going to look like. I would agree with Baroness
O'Cathain saying that the future is not like today only more electronic.
At some point things change pretty dramatically because information,
computers, industries, governments, do not work like others. Part
of the key approach is not to snatch at solutions, for the time
being to be aware of the limitations in our ability to predict
the future, and to solve the obvious problems, avoid obvious inequalities,
move rapidly when there is some certainty as to how to proceed,
but to be somewhat cautious in the fostering of the new economics
and the new technologies as they go. Something I would point to
there is that there has been a consciously adopted policy of a
tax moratorium and it is a temporary moratorium that the US has
put on. Tax is a real issue that governments will have to address
and it will have to be addressed globally because it is a global
market. The US is saying, "We just do not know enough about
how people are going to shop here yet. Let us let it grow a bit."
108. I have a very brief supplementary to the
point I asked before. Can I go into areas which clearly we would
all agree were wrong: child pornography, for instance? I think
99.99 per cent would agree with that. I have got a nine-year-old
son for example who spends more time on his computer than he spends
watching television. Is there any way that we can agree about
certain global things, do you think, as governments or, to take
Lord Skelmersdale's point, Europe, or whatever area? Could we
take one or two major subjects, which we could actually put the
force of law behind to prevent or do you think that also has to
be completely left open?
A. I think child pornography is one, but it
is not like the Net created it and it is not like it is not illegal.
It is illegal. People go to jail for having this on their computer.
The fact that the Internet enables it to be more rapidly disseminated
is in some ways a threat but also, if you have an intelligent
policing system (the police systems are led by the Dutch I think
who are getting much more intelligent about tracking it down)
you can look back the other way up the pipe. If there is child
pornography being transmitted where is it coming from? Who are
these pornographers? They are breaking the law already. Let us
use this greater flow of information to track them down and put
them in jail.
109. You see that there would be some thingsI
do not want to become like Lord Cavendish leaving this meeting
feeling that the whole world is going to be turned upside downthat
you think are like that. Drugs is another good example. I do not
know this for a factthat you can get better quality hash
over the Net than you can by going down to Soho. I am told. This
is clearly something that is illegal. Do you think there are things
that we could enforce, either by geography or globally, in order
to prevent those things becoming more easily available to people?
A. As Lord Woolmer was saying, the Web makes
things easier to find and to transmit. That will not change what
is illegal or not illegal. Most governments around the world have
made drugs illegal, have made child pornography illegal.
110. Surely governments have responsibility
to protect the health and welfare of their citizens in so far
as they can whilst allowing them to have freedom which applies
in a democratic situation. If for example there are drugs which
are very well known to cause real damage to human beings, you
cannot say to the human beings, "Do not take that".
For example, if there was a drug which would help somebody suffering
from multiple sclerosis but people know that the side effects
of that drug are so appalling, yet people who were suffering from
multiple sclerosis would probably want to take it. How could governments
stop those people doing real damage to themselves?
A. In practice the social trend is for governments
not to stop, for two reasons. One is demographics. We are dealing
with a significantly more educated workforce
111. We are not really.
A. and population than we ever had before.
They are going to university. They are taking white collar jobs.
People who at least believe themselves to be. In a democracy people
believing themselves to be capable of taking their own decisions
is an important thing. Secondly, in practice in those sorts of
cases it is seldom black and white. If I am about to die of cancer,
who but I really can make the decision of whether I should take
a drug that might blind me or whether I should die? Ultimately
that is kind of my choice and I should like to make it. I speak
for myself but I think I also speak for a lot of other people
in that situation.
112. With all the laws which there are for preventing
drugs as well as child pornography, governments have not been
able to enforce them at present. Are they really enforceable at
A. Taking the economic analogy, so much government
effort is put on the supply side in trying to stop drugs being
produced. Increasingly what governments can affect is the demand
side. They can try and explain to people not to take drugs, and
if the people really wish to take drugs, well, then their powers
to stop them become significantly more limited.
113. If you are saying you can go back up the
pipeline on child pornography, you can go to the source, why should
you not go to the source on hackers? Why should you not go to
the source on people who are on the website advertising drugs?
There is a whole range of issues. Why should you not access anybody's
e-mail if you so wish? Why should a piece of paper not float around
on a wire to journalists that there is a cyber crime treaty contemplated
in the Council of Europe, with consultations between European
countries, the States, Canada, Japan, South Africa, South Africa?
A. As much as I understood the question, it
was that if some things are illegal why should we not be able
to look everywhere to ferret them out.
114. Why should we not be able to enforce it
if people collectively come together and create a treaty?
A. I think we can. There are going to be limits
though on privacy. It is not new dilemmas. The fact that some
things are illegal to have in your house does not stop us from
discussing search and seizure and when you can go in and when
you cannot, and we will want similar civil accommodations for
electronic communication. When is it legitimate to wire-tap? How
is it wire-tapped? Insert the large and deleted sections of the
Electronic Commerce Bill here.
115. Then it is public opinion, is it not? In
this country we have the Data Protection Act, and there is a directive
for one in Europe. No such legislation exists in the States. Yet
the recent survey work done by Andersen Consulting seems to indicate
that there is quite a body of opinion in the States now moving
in that direction.
A. Yes, and self-regulation has been somewhere
between disappointing and not encouraging on this scale of good
to bad. I was particularly amused that the White House was not
wandering around saying that self-regulation as opposed to privacy
policy was the way of the future.
Lord Woolmer of Leeds
116. I should love to follow that last point
up. It is almost like the agenda for a meeting for someone, is
it not? In your paper you gave two concrete examples which, let
me assume, would apply to you, that in your and your colleagues'
view would help the promotion of e-commerce and the Web and young
entrepreneurs. One was obstacles to company formation, to licensing
and so on, the whole range, and that these by implication vary
in Europe, and getting greater consistency and speeding it up
would help. Secondly, the differential treatment of stock options
in tax regimes within the EU in your view is holding back young
European entrepreneurs. Would it be possible for you to give us
a note that gave practical examples of those so that we have concrete
examples and see the reality of those, because at the end of the
day you said, "Do not keep jumping into everything all the
time but when you do, act quickly." I took your message to
be that they are two areas in your view where action is needed.
A. I take it that this is a "go away and
send back" question.
A. Yes, I am happy to do that.
118. You do have an opportunity with us to feed
some of the views of your club into areas where they may take
A. It strikes me that you are interested in
finding out what European entrepreneurs are talking about and
are concerned about. We have a good 30,000 of them who pay attention
to the e-mails that we send out. We would be more than happy to
ask questions on your behalf.
119. We are opening a Web page.
A. Yes, why not. Put up a Web page.