Private Regulation Research Articles

Algo-Rhythms and the Beat of the Legal Drum

The paper focuses on concerns and legal challenges brought on by the use of algorithms. A particular class of algorithms that augment or replace analysis and decision-making by humans, i.e. data analytics and machine learning, is under scrutiny. Taking into account Balkin’s work on “the laws of an algorithmic society”, attention is drawn to obligations of transparency, matters of due process, and accountability. This US-centric analysis on drawbacks and loopholes of current legal systems is complemented with the analysis of norms and principles of the EU data protection law, or “GDPR”. The aim is twofold. On the one hand, the intent is to shed light on some crucial differences between the US and EU law on the regulation of algorithmic operators, both public and private. Whereas, in the USA, scholars debate whether and to what extent new duties and responsibilities of algorithmic operators, e.g. information fiduciaries, have to amend the current framework of self-regulation and light government—as shown by the White House’s Office of Science and Technology Policy report from November 2016—in EU law much of the new duties and responsibilities of algorithmic operators have been passed upon them as data controllers. Whether such approaches will successfully tackle the normative challenges of the algorithmic society is, on the other hand, an open issue that will likely represent the main topic of debate over the next years. Disagreement may concern: (i) the terms framing the legal question in e.g. statistical purposes of the data processing; (ii) how such terms are related to each other in legal reasoning (e.g. a right to explanation as valid law in the EU); and (iii) legal hard cases that will increasingly have to do with the principles that are at stake also but not only in data protection (e.g. informational self-determination). By entrusting such legal hard cases to algorithms, or some sort of smart artificial agent, humans still bear full responsibility for the judgment of what is socially, ethically, and legally “plain” and “hard” in social affairs. The balance between delegation of decisions to algorithms and non-delegation will be the leitmotiv of the algorithmic society. Since the devil is in the detail, the current paper is devoted to some of them.

A field-level perspective on government involvement in private regulation

This paper addresses recent calls by various scholars to study the interaction between public and private forms of regulation and the need to bring the state back into transnational private regulation. To date, the involvement of government has generally been conceptualized in the singular – one government with numerous non- state actors. This conceptualization fails to capture the dynamics of the regulatory pluralism that can be witnessed empirically. In many industries the transnational regulatory field is characterized not by one but numerous government actors, often in the pursuit of contradictory policy goals. The present study contributes to the literature on “bringing the state back in to private regulation” by examining and tracing the efforts by numerous governments to shape private regulatory schemes and the consequences of their doing so at the level of the regulatory field.

Platform Governance in the Sharing Economy: Interplay Between Public and Private Regulators

We built a multi-stage dynamic game model to analyze how to effectively regulate opportunistic behaviors in the sharing economy. We elaborate this under three different scenarios: sellers under (1)...

Diffusion of (Improving) Innovations: The Diffusion of Privatized Regulatory Agents

The rate at which innovations diffuse through a population changes with accumulated adoption. However, many innovations also improve as experience accumulates. We use unique data from the medical device industry to both explore how technological change affects diffusion and to better tease apart its effects on two common diffusion mechanisms: vicarious learning and institutional change. We investigate the likelihood that a manufacturer will choose to use a privatized contractor to obtain regulatory approval of a new device over the traditional public regulatory process, which both appear to exhibit learning from experience effects. Results suggest that improvements to the review times of private regulators lead to increased adoption of such privatized contractors. This study has implications for diffusion studies by providing a rational explanation as to why innovations change as they diffuse, for organizational learning studies by beginning to integrate research on learning from experience with the diffusion literature, and by extending knowledge of privatization.

Regulation of Business-Clients Relationships through ‘Organisational Law’

AbstractIn the European regulatory framework, private law principles, and primarily party autonomy, may be interpreted as legal tools oriented beyond the interests of the single individuals involved in commercial transactions, and rather connected to the superior objectives of the Internal Market, and of the European Economic Constitution. Looking from this perspective at the regulation of Business-Client relationships, while it is clear that the strong interrelation of autonomy/heteronomy elements in commercial transactions calls for a methodological approach capable of providing an integrated view of regulation and private law, it also emerges that, up to now, similar attempts have been developed mainly within contract theory. The aim of this article is to test whether the regulatory perspective of European private law allows the regulation of Business-Client relationships through standards and rules not directly taken from contract law, but rather originating in other, formally different, legal branches. More specifically, attention in centred on corporate law, intended as that part of commercial law which defines the internal structure of the firm. Focus is thus put on organisational rules which are relevant within an incorporated business: the analysis starts from national rules, anchored to the traditional partition between civil law and commercial law; then it traces their rationale within the European framework, looking for hermeneutical insights capable of providing a more unified interpretation of those rules when framed back at a national level, as standards of regulatory private law.

Private Regulation in EU Better Regulation

The promotion of private regulation is frequently part of better regulation programmes. Also the Better Regulation programme of the European Union (EU) initiated in 2002 advocated forms of private regulation as important means to improve EU law-making activities. However, for various reasons the ambition to encourage private regulation as a genuine governance response to policy issues has remained a paper reality. This contribution asks whether and to what extent the 2015 EU Agenda on Better Regulation provides renewed guidance on how private regulation might be integrated in EU law-making processes. To that end, it builds on previous (empirical) research conducted on European private regulation and reviews the principal policy documents constituting the new EU agenda on better regulation. It is argued that while the new agenda addresses a number of the shortcomings of the old programme concerning the conceptualization and practice of private regulation in the EU, it still falls short of providing principled guidance on how private regulation can be combined and integrated in EU law-making.

European Regulatory Private Law Going Global? The Case of Product Governance

The article claims that contract law principles are being used by transnational financial regulation to set a world-wide (proto)normative framework regulating intra-firm processes. This practice comes close to the European Regulatory Private Law (ERPL) phenomenon already employed by the EU lawmaker in quite technical fields, such as banking and financial services law. After an overview explaining what it is meant by ERPL, the article discusses the new Product Governance rules under the Market in Financial Instrument Directive II, which may be viewed as the most recent example of ERPL. The article then provides a description of the normative production of the International Organization of Securities Commissions (IOSCO), also regarding product governance rules. The result of the author’s analysis seems to suggest that IOSCO has paved the way for a European approach to product governance which, overall, is coherent with the ERPL theory.

The Exercise of Public Authority Through Informal International Lawmaking: an Accountability Issue?

An increasing number of fora and networks have been recognised to play a role in international or transnational normative processes. While lawmaking by formal, intergovernmental international organizations received abundant attention over the past years, we know less about a phenomenon that this paper refers to as ‘informal international lawmaking’ (IN-LAW). Lawyers struggle with the new and extensive normative output in global governance. We nevertheless use the term ‘law’ to connote the exercise of public authority, as opposed to what is often referred to more broadly as ‘regulation’ (covering both public and private regulation). IN-LAW, as we define it, can include private actor participation, but excludes cooperation that only involves private actors. The present paper thus purports to introduce the concept of ‘informal international lawmaking’ and it will present some findings based on case studies in the IN-LAW project related to the reasons for actors to opt for informal lawmaking. We also analyse whether − and to what extent ‒ IN-LAW bodies are subject to some form of accountability and, if so, in what form and at what level. Finally, we will look at some consequences of informal international lawmaking, in particular in relation to the changing role of law in global governance

The Application of Audit Standards in ECA's Work

External auditors, both in the private and in the public sector, are in the business of providing information to citizens and other stakeholders, to decide whether and in how far they can trust in what the audited bodies claim has been achieved. Audits of these auditors are governed by standards which concern the different aspects of professionalism of auditors and their audits. This raises the question how these standards fit into a regulatory framework under which an external auditor operates. So far, there is little published research on the role and structure of standards that govern audits of the European Court of Auditors (ECA). By drawing a structure of these standards and investigating them vis-a-vis the EU legal framework, we argue that the ECA, which is based on constitutional law and EU law, is mainly following the private sector standards and private sector standards are more or less copied, as far as financial audit is concerned. For issues more exclusively covered by public sector auditors, such as performance audits, public sector auditors have developed themselves standards and guidelines. The fact that there are no uniform general audit principles which would govern the work of the ECA raises a concern to what extent public external auditors pay attention to the difference between the public and private auditing. The paper aims to enhance our understanding of the institutional complementarity between transnational private regulation and public regimes.

Introduction to the Special Issue: Public and Private Labor Standards Policy in the Global Economy

AbstractThis article introduces a Global Policy Special Issue on public and private protections of labor and social standards in the global economy, exploring whether public and private regulations of such standards develop in harmony or tension with one another. It promotes an approach to studying public‐private interactions in global labor governance that is sensitive to how interactions are important at different stages in the making of public and private regulation; how the causal interaction can go from the public to the private and from the private to the public; how such interaction varies in quality and promise across different parts of the world, labor issue areas and policy instruments; and how public‐private interaction can only be captured by combining case histories with large‐N analysis. The evidence from the Special Issue's articles leads to a set of generic propositions, describing how public interventions tend to strengthen private labor policy, while private interventions tend to either modestly substitute for or have little effect upon public labor and social protections. The article then discusses how these dynamics may be influenced by the political contentiousness of the specific labor issue and the characteristics of the state.

Of Private Law, Market Regulation and Telling Them Apart in the EU

This paper seeks to engage with the theme of the conference, Private Law and Regulation, and with the organizers’ research theme, “coherent private law”, at two main levels. On the one hand, it connects to the question of private law and market regulation by zooming in on one specific manifestation of private law - unfair contract terms under European harmonised rules - which is arguably already regulatory private law. Rather than discussing the impact of public law rules on private law adjudication, then, the paper seeks to show how public law rationales impact private law rules when the latter are adopted and “used” as a regulatory instrument. This argument is sketched on the basis of a case study on the European Court of Justice’s interpretation of the Unfair Terms Directive. After having presented this study, the paper concludes by briefly exploring what options are available for private lawyers to claim a residual relevance of their subject and its principles in a context which seems to put all these consolidated ideas under increasing strain.

Entre régulation environnementale privée et institutions publiques : les effets mitigés de la certification forestière communautaire en Amazonie

Nous analysons les effets de la certification Forest Stewardship Council sur les communautés forestières au Brésil, en tenant compte des dynamiques sociales et institutionnelles préexistantes. Nos enquêtes montrent que l’adoption de la certification forestière par les petits exploitants peut apparaître plutôt rentable à court terme. Cependant, une mauvaise articulation entre cette régulation privée et les institutions publiques existantes rend ce dispositif difficilement soutenable à long terme.

Комплексный правовой режим предупреждения банкротства туроператора как предмет частного и публично-правового регулирования [На англ.

Комплексный правовой режим предупреждения банкротства туроператора как предмет частного и публично-правового регулирования [На англ.

Between History and Passion: The Legitimacy of Social Clubs in the Province of Buenos Aires (2001–2007)

In the last few decades the concept of self-regulation accompanied the process of dismantling the welfare state. In this context, in central countries—Europe and North America—the importance given to private regulations versus public action increased, thus requiring new mechanisms of legitimacy. To this end, appeals to the principles of economy and technical efficiency to legitimate private regulations have been made by several researchers. However, these principles acquired a negative view in Argentina because they were used to use to legitimate processes that led to various crises, especially taking into consideration the neo-liberal experience of the 1990s. Against this historical background, this paper seeks to show a particular case of legitimizing the self-regulation of non-state organizations (social clubs) by using classic <em>topoi</em>, which had been historically used to legitimize state action. In order to do so, this text focuses on the analysis of “Luna de Avellaneda” Act of 2007, by which the government of Buenos Aires sought to legitimize the self-regulation of clubs appealing to the classical values of democracy, participation, and solidarity. For this, the historical experience of the Argentinean political community will be observed from the perspective of the history of these clubs, thus recovering the social function they played in the diverse political and economic crises.

Might Corporate Social Responsibility Hollow Out Support for Public Assistance in Europe?

AbstractThis article explores whether private regulatory activity to promote labour and social standards might hollow out traditional public regulations to provide welfare and labour protection at home and abroad. Such exploration has hitherto been frustrated by empirical limitations of measures of private regulatory activity and its implications for public regulation. The present article extends those limits by focusing on how new measures of labour‐related private regulation affect attitudes in 27 European polities towards welfare redistribution and for foreign assistance. Our analysis suggests that private‐regulatory CSR promoting labour and social standards may directly and indirectly diminish public support for domestic welfare redistribution, but appears to have little effect on support for foreign aid. We see, hence, possible crowding‐out only with respect to domestic, not international, assistance.

Internet as a Public Space for Freedom of Expression: Myth or Reality?

This article examines the stature of internet as a modern public space for demonstration of one’s freedom of expression. It opines that the numerous benefits internet provides as a public space for individuals’ nourishment of freedom of expression are curtailed by its private ownership. So much so, that internet is no more the open field for free expression that many predicted it would be. It further explores the approaches taken by the US and European Union in encouraging private regulators to restrict free speech rights in the online world according to their own whims. Courts’ role in this regard is explored briefly which in effect is also a mere disappointment. This article then seeks to rebut the defensive grounds taken by states and courts in failing to provide sufficient protection to fundamental freedoms in the internet arena. While arguing the importance of cyberspace as a genuine forum for public discourse of present century, it would be asserted that internet should also be regulated by free speech principles and protected by human rights regimes. It has all the elements of a ‘public sphere’ so it should be given the same level of protection as provided in the offline world.

Banking Communication Non-binding and Burden-sharing Approved: Kotnik

Case note on Judgment of the Court (Grand Chamber) 19 July 2016, Tadej Kotnik and Others v Državni zbor Republike Slovenij (526/14) On 19 July 2016, the CJEU decided the Kotnik case concerning State aid, EU soft law, corporate law and insolvency law. The wide spectre of legal subjects touched upon shows that the case is important not only for constitutional and State aid law, but also for the research field on regulatory private law. It impacts banking contracts throughout the EU. The importance of the case is underlined by the fact that the CJEU decided the case in the Grand Chamber. In short, the CJEU ruled that the Commission’s Banking Communication from 2013 is not binding on Member States. It considered the Banking Communication’s provisions on burden-sharing to comply with EU primary law including State aid provisions, the right to property and the principle of protection of legitimate expectations. The CJEU also found that the burden-sharing regime is compatible with Directive 2012/30/EU which generally requires that a capital alteration be decided by the general shareholder meeting. However, the burden- sharing regime is limited by the principle of proportionality since it may not exceed what is necessary to counter the capital shortfall. After a short outline of the facts and legal background, this case note will address each of the CJEU’s findings and discuss their implications for other areas of EU law.

Food Safety Meta-Controls in the Netherlands

Both public and private actors are involved in the monitoring and enforcement of compliance with public food safety norms. Public authorities in countries such as the Netherlands, the United Kingdom and Canada have recently started to develop forms of coordination and collaboration with private food safety control systems. Such policies bring with them the risk of regulatory capture, loss of transparency and fuzzy accountability relationships. Here we analyse how the Netherlands Food and Consumer Product Safety Authority (de Nederlandse Voedsel- en Warenautoriteit – NVWA) assesses and monitors the functioning of private food safety control systems (meta-control) so it can use these private systems in its own enforcement activities. We do so by discussing two national private systems that have been formally accepted by the NVWA: Bureau de Wit and RiskPlaza. The paper examines the safeguards that the public enforcement agency deploys while coordinating its own activities with private food safety controls, the advantages and risks involved in this strategy, and the extent to which this policy can be improved. The study is based on the analysis of policy documents, public and private regulation and open-ended interviews with representatives of the public and private sector in the Netherlands.

Fairtrade labour certification: the contested incorporation of plantations and workers

Fair trade seeks to promote the well-being and empowerment of farmers and workers in the Global South. This article traces the contested growth and configuration of Fairtrade International labour certification, providing a multifaceted and dynamic view of private regulation. I explain why Fairtrade International began certifying large enterprises and how its hired labour strategy has developed over time, illuminating fair trade’s move from peasant to plantation sectors, stakeholder involvement in shaping the growth of Fairtrade labour certification, the internal and external balancing of farmer and worker concerns, and major innovations in Fairtrade’s ‘New Workers Rights Strategy’. My findings challenge the claim that recent market mainstreaming explains the rise of labour certification within fair trade and the more general argument that private regulatory programmes founded to foster empowerment evolve over time to prioritise a logic of control. As I document, Fairtrade International has recently moved to bolster producer power within its organisation and labour rights within its certification programme. My analysis reveals the dynamic nature of private regulatory programmes and the potentially influential role of diverse stakeholders in shaping the priorities of Fairtrade and other labour-standards systems.

The Role and Function of Private Trade Associations as a Private Regulator in Making Markets More Efficient and Stable: The ISDA, The ICMA and The LMA in Comparative Review

The Role and Function of Private Trade Associations as a Private Regulator in Making Markets More Efficient and Stable: The ISDA, The ICMA and The LMA in Comparative Review