Liability Rules Research Articles

Liability Rules For AI-Facilitated Wrongs: An Ecosystem Approach To Manage Risk And Uncertainty

How do we apply liability rules in cases in which hardware, software, and data all come from different sources, and in which humans are involved all at the same time or in sequence? What roles do our laws play in situations in which AI is involved? Most essentially, how do laws help us deal with the risks and prevent harms, and also hold the right individuals responsible for AI-caused or AI-facilitaed harms when they occur? This paper aspires to provide some answers to these questions. The paper supports a multifaceted approach to liability for AI-facilitated wrongs, which would require identifying different risk pools and applying rules of collective liability together with rules enforcing or incentivizing the (re)allocation of (individual) liability within separate risk pools. The paper surveys and assesses different AI liability schemes against the backdrop of the human tendency to either underestimate—when systems work well—or overestimate—when systems fail—the role of humans and other non-technological factors in the process. It also returns to Calabresi and Melamed’s classic theory and discusses the role that liability rules will play in the context of AI-facilitated wrongs and in the allocation of legal entitlements and liability costs, ideally to the parties that can most inexpensively avoid them.

Rules of criminal liability for corruption offences and their prevention

The objective of the article is to conduct a comparative legal study of Ukrainian and international standards of criminal liability for corruption offences and their prevention. The research methodology includes the following methods: system-structural method, formal-dogmatic method, historical method, grouping method, comparative-legal method, legal modeling method and others. As a result, the peculiarities of anti-corruption regulatory-legal provisions and police practice in the states analyzed are clarified, with the selection of relevant positive and negative trends, principles of construction of anti-corruption policy, specificity of the conceptual apparatus, etc. Emphasis is placed on the need to further harmonize Ukrainian legislation with international agreements and the practice of their implementation. It is concluded that negative trends in foreign countries have been found to be the result of non-compliance with relevant commitments to combat and prevent corruption.

LEGAL CONNECTION OF THE ORGANIZATIONAL AND LEGAL FORM OF A LEGAL ENTITY WITH THE PECULIARITIES OF ITS CIVIL LIABILITY

The article analyzes a number of problematic issues related to the mechanism of application of civil liability to legal entities of private law in modern civil law. Particular attention is paid to the emergence and legal regulation of subsidiary liability, the possibility and procedure for filing recourse claims against the person guilty of the offense. The author draws attention to the presence of a number of problems in the practical implementation of the rules on subsidiary civil liability of legal entities and the rules governing the institution of recourse. The opinion is expressed on the expediency of bringing the rules of subsidiary liability of members of a production cooperative with the liability of members of a limited liability company, so it is necessary to agree on the liability of members of a production cooperative of the same type. It is concluded that the enshrinement in the legislation of special rules governing the recourse procedure for the protection of civil rights, would solve the situation. The author points out the important negative consequences of the lack of legislation and doctrine of a clear vision of the legal nature of corporate responsibility, its main features and relationship with other types of civil liability (contractual and tort). A general description of the practical difficulties in applying the rules of subsidiary liability is given. It is stated that the independence of civil liability of business associations is limited by a number of cases when the obligations of the company are also the responsibility of its members (founders). It is argued that in relation to non-profit companies, the legislator consistently adheres to the concept of this type of legal entities, and does not provide for the possibility of acquiring ownership of the company’s property, and therefore there is no corporate liability of non-profit companies and their members.

Liability rules for autonomous vehicles

PurposeThe coming use of autonomous vehicles has kindled an extensive debate over the choice of a desirable liability regime. This article contributes to that debate by explaining how rules for liability and damages ought to be constructed to deal first with stranger (including highway) cases and then with consensual cases (like medical malpractice). It concludes that an output regime based on events as they unfold is applicable in the former but not in the latter. It then argues that this legal regime carries over without a hitch to autonomous vehicles. It then further notes that in private disputes there are no fixed rules for deciding how to mix rules for injunctions and liabilities for threatened harms, and further notes that the regulatory regime for IoT will face those same difficulties, which are best solved by trying to minimize the sum of Type I and Type II errors, as in other cases.Design/methodology/approachLegal reasoning/analysis.FindingsOne salient point is that the rules of the road should change in response to technical innovation, but liability rules should not. The sound approach for dealing with damages for past incidents ought to be constructed to deal first with stranger (including highway) cases in which there is a dichotomous decision on compliance or not. That regime is based on events as they unfold, and carries over without a hitch to autonomous vehicles. For dealing with the prevention of future harms from violation of these rules, by contrast, there are no fixed rules for deciding how to mix damages with injunction, and the substitution of a system of direct state enforcement faces the same difficulties of implementation. In both settings, the rules of the road should be held constant, after which the ideal remedial mix follows the traditional approach of trying to minimize the sum of Type I and Type II errors, relating to over and underenforcement. The basic rules of tort liability stand in contrast to the different standards of liability that arise in consensual situations, and in all cases, they must necessarily be supplemented by rules of vicarious and product liability. Overall, the bottom line is this: autonomous vehicle innovations are relevant to designing regulations for future and uncertain harms, but irrelevant to liability for past harms.Originality/valueThis is an original legal analysis on the topic of Autonomous Vehicles.

Securing Property Rights

A central challenge in securing property rights is the subversion of justice. We present a model of a polluter whose discharges harm multiple owners, and we compare property rules, liability rules, and regulation on efficiency grounds. We provide conditions under which property rules are preferred to liability rules, thus verifying the Calabresi-Melamed conjecture. Regulation that enforces partial abatement may be preferred to either of the extreme rules. An empirical analysis of water quality in the United States before and after the Clean Water Act shows that the effects of regulation are consistent with several predictions of the model.

International Environmental Responsibility and Liability

The accountability of the subjects of international law for their acts and omissions, and the consequences thereof, is fundamental to the effectiveness and legitimacy of international law. Yet, the international environmental accountability of states remains a difficult and controversial topic, for both doctrinal and policy reasons. With few exceptions, states have not addressed this question in international environmental treaties, neither have international courts been burdened with cases or requests for advisory opinions on questions of environmental responsibility or liability of states. This article provides an analysis of the relationship between international environmental law and state responsibility, including a discussion of primary obligations, environmental harm, and the standard of care/due diligence. For the purpose of this article, accountability is used as an “umbrella term” and refers both to the responsibility of states and international organizations for internationally wrongful acts, as well as to their liability to make reparation for harm and damages resulting from their activities. Accountability for internationally illegal acts, such as breach of a treaty or the violation of customary law rules, is relatively well developed in general international law under the concept of state responsibility, though not in a codified, treaty-based manner and some uncertainties exist. In general, state responsibility refers to the accountability of a state for a violation of international law and is premised upon an internationally wrongful act which can be attributed to a state. Such internationally wrongful act can arise from the breach of an international legal obligation (“primary law”), established by treaty law (e.g. bilateral or multilateral environmental agreements) or by a customary norm of international law (for example the prohibition of environmental harm). The consequences of international responsibility for a wrongful act are the obligation of the wrong-doer to cease that act, to offer assurances of non-repetition, and to make full reparation of the injury caused by the internationally wrongful act, including compensation for environmental damage. On the other hand, rules for strict liability for environmental harm resulting from lawful activities are not so well established, and remain singular and exceptional. In general, states have shown little interest in setting up a general liability framework for environmental damage and only very few international environmental regimes impose liability and compensation schemes on states. Some issue-specific international environmental treaties impose civil liability on private actors, but do not establish a compensation scheme for states. Those liability rules are not used to prevent pollution or damage, but serve as a “backstop” to provide access to compensation when damage occurs despite the implementation of treaty rules that aim at preventing damage. Such damage can occur by accident or non-accidentally. In the later cases, compensation can be rewarded where a state did not exercise proper care so as not to cause adverse environmental effects to other states or areas beyond national jurisdiction or to prevent others in its territory from causing such effects. This standard is captured by the doctrine of “due diligence” which has been defined to require what a responsible government can be reasonably expected to do under normal conditions in a similar situation; applying its best practicable and available means. Due diligence does not refer only to unlawful omissions by a state, but also predominantly to the obligation of conduct to show proper care by exercising good government, management and control, for example, through enacting necessary legislation, effective law enforcement to prevent or terminate illegal activities.

БЕЗВИНОВНАЯ ОТВЕТСТВЕННОСТЬ ЗА ПРИЧИНЕНИЕ ВРЕДА ПРИ ЭКСПЛУАТАЦИИ ВЫСОКОАВТОМАТИЗИРОВАННОГО И ПОЛНОСТЬЮ АВТОМАТИЗИРОВАННОГО ТРАНСПОРТНОГО СРЕДСТВА КАК ИСТОЧНИКА ПОВЫШЕННОЙ ОПАСНОСТИ

This article is devoted to the liability for damages caused by highly automated and fully automated vehicles as sources of danger. The author considers owner and manufacturer of these vehicles as possible responsible persons by the rule of strict liability. It is concluded that neither option has clear advantages.

Health, Environment and Economic Interests: From Balancing to Ensuring Effective Remedies

Abstract Balancing health and the environment against economic interests – in terms of production but also employment – is a big conundrum for national, European and international courts and politics. It seems a ‘tragic choice’ to deal with. The Ilva case symbolises an environmental disaster that offers an opportunity to delve into several sensitive issues. Part I will address, firstly, the possible methods and limitations of balancing constitutional rights in the Italian legal system, drawing on the flexible and dynamic nature of the hierarchy of legal values. Secondly, it will address the role of effective judicial protection of the right to health and environment, taking into consideration access to justice and effective remedies, as the European Court of Human Rights (ECtHR) pointed out. Part II will focus on the role of civil liability in repairing damage where no effective prevention is feasible. While focusing on the unilateral prevention of accidents and the irrelevance of a regulatory compliance defence, the paper will contend that ‘reflected’ environmental damage should be awarded compensation through a strict rule of liability. Finally, the paper will articulate some policy remarks as to the most effective model to regulate environmental disasters.

Уменьшение размера имущественной ответственности: постановка проблемы

The article deals with an issue of reduction of liability in the civil law. The Civil Code of Russian Federation includes handful rules, which allow the court to reduce liability of a debtor. However, such rules are applicable to different events and there are no universal rules applied to all events of property (economical) liability. For instance the court ought to reduce liability of a debtor in case both a creditor and the debtor are failed an obligation as well as the court is entitled to reduce liability of the debtor when the creditor facilitated increasing an amount of his losses. The court reduces an amount of penalties in event of such the amount is obviously not equal to the result of aftermath that an obligation was failed by debtor. In cases related to damnification the court has the right to reduce liability of tortfeasor based on his property status unless they caused damage intentionally. Yet there are many rules of property liability simultaneously do not allow to reduce such liability, for instance liability for violation of intellectual rights, rights of consumers (when a seller refuses to fulfil a demand of a consumer on his own free will), etc. Since there are sort of such rules, the court occasionally forces to apply the art. 333 of the Civil Code to Russian Federation, meanwhile the legal practice of applying this article is inconsistent. The reason of that inconsistency is there are no legal rules of reducing liability which regard all types and events of property (economical) liability. However the legal practice has a wide experience and knows many methods of reducing property (economical) liability. The author points out that it is time to formulate universal rules of reducing liability applied to all events of property (economical) liability on the basis of scattered rules of the Civil Code of Russian Federation and legal practice of its application.

The Legal Regulation of Protection of the Rights and Interests of the Parties to Alimony Obligations

Introduction: the paper analyzes the institution of alimony obligations, namely, the protection of the legal rights and interests of the parties in the event of alimony relations between them. The purpose is to determine the essence and importance of alimony obligations and protect the rights of the parties to alimony legal relations under modern family law. In this regard, the author analyzes the concept and legal nature of alimony obligations in family law of the Russian Federation, and also considers the application of legal liability measures in alimony obligations. Using the methods of scientific knowledge, the author analyzed the legal nature of alimony obligations, as well as the application of legal liability measures in this area in order to identify the ways to improve the protection of the rights and interests of the parties in the field of alimony obligations. Results: the insufficient scientific development of a number of issues related to the characterization of alimony obligations and liability of persons who violate them negatively affects the understanding of the legal nature of such liability, reduces the efficiency of its application and serves as an obstacle to further improvement of the relevant section of the family legislation. Conclusions: the analysis of the legal consolidation and practical implementation of measures of responsibility for non-performance or improper performance of alimony obligations is an essential part of the science of family law. The applicable rules of liability are regulated by a whole set of legal acts of various branches of industry, and the differentiation of such measures is implemented in different ways in modern law.

Moral Reflections on Strict Liability in Copyright

Accidental infringement of copyright is a pervasive and largely ignored problem. In the twenty-first century, it has become increasingly easy to infringe copyright unintentionally. When such accidental infringement occurs, copyright law holds the user strictly liable. Prior literature has questioned whether the strict liability standard is normatively defensible. In particular, prior literature has asked whether the strict liability standard ought to be reformed for economic reasons.
 This Article examines the accidental infringement problem from a new perspective. It considers whether it is fair to hold copyright users strictly liable for accidental infringements of copyright. This Article argues that the strict liability standard is not fair because it results in copyright users being held liable for accidents for which they are not morally responsible. Using the moral philosophy literature on responsibility, this Article explores our intuitions surrounding copyright’s liability standard in order to better understand why strict liability in this context seems “harsh” and “inequitable.” In turn, this provides an argument for reforming copyright’s liability rule and adopting a negligence standard. This Article then argues that, within the United States, the proposed reform to copyright’s liability rule should be accomplished by modifications to the existing fair use doctrine.

Zoning Cyberspace: Protecting Privacy in the Digital Upside Down

Over fifty years ago, Charles Reich posited that we should extend property protections to what he would call “government largess”: that array of interests—from licenses to welfare benefits—that often form the bases for one’s economic existence in the modern world. Reich considered such protections essential to the preservation of individual autonomy, the independence that is critical to a functioning democracy. Today, our most personal information and even our thoughts, as reflected in our online activities and digital existence, are subject to “private largess.” Private entities possess information central to the identity of those individuals who utilize their services. This information exists in a digital “upside down,” to borrow a phrase from popular culture: an almost parallel universe or shadow world where our most intimate details are open to inspection and acquisition by third parties without our informed consent. Indeed, only a relatively weak set of institutions stand in the way, if they offer any resistance at all, to the sharing of such information by these entities in ways that undermine what I refer to throughout this piece as the integrity of identity: what should be a protected sphere of personal interests, desires, affiliations, and even our beliefs that make up the self. As we face calls for greater surveillance in the throes of the novel coronavirus (SARSCoV- 2) crisis, concerns that privacy protections will further erode loom large. Moreover, any crisis-intervention measures may never be rolled back when the acute crisis dissipates. While much privacy scholarship focuses on the personal, individual, and private rights such risks to privacy entail, I will focus on the dangers these threats pose to democracy by undermining the integrity of identity and the collective goods that democracy produces. In a landmark article, Calabresi and Melamed argued that we should protect different entitlements through those rules that produce desired results in society, including solving collective action problems. They would classify these different approaches as either property, liability, or alienability rules. This Article draws from and builds upon the work of Reich, Calabresi, and Melamed to argue that, as in several property law contexts, from the mortgage market to zoning, where we use what I call “hybrid” rules— rules that combine elements of property, liability and alienability approaches—to solve collective action problems, we should see the problem of privacy in the digital world as a collective action problem that requires similar, hybrid solutions. Indeed, this Article argues for a form of what I call digital zoning that utilizes all three approaches in the Calabresi and Melamed taxonomy through hybrid rules to help preserve privacy, autonomy, and self-determination in the digital world.

Contract Law Solutions for Digitalized Cross-Company Value Networks in Industry 4.0: Part 2: Contract Law

The original German version of this text is available at http://ssrn.com/abstract=3767069 This series of papers deals with issues of contract law in Industrie 4.0. It is based on the law of the Federal Republic of Germany. Part 1 introduces the topic and explains the legal problems that arise in Industrie 4.0. Part 2 deals with issues of contract law: How are contracts concluded among autonomous software agents, what types of contracts come into question, and how must general terms and conditions be structured. Part 3 looks at issues of licensing law and intellectual property in data. Part 4 looks at the liability of autonomous systems in Industry and provides an outlook on possible future solutions. Industrial production is increasingly taking place in digitized value chains in which numerous independent companies cooperate in digital networks. Within the framework of such cross-company cooperation, industrial manufacturing processes autonomously manage themselves via integrated IT networks. This control increasingly makes use of intelligent systems that act either as autonomous software agents, in conjunction with humans or networked with other computers and machines. In addition to the industrial production process itself, parallel workflows of streams need to be handled, which is becoming more and more important. This results in specific situations and risks. Essentially, the questions to be answered are: • which legal status can be attributed to dataii that is generated in the production process, and • how can the liability in cross-company digital production networks be assessed and mitigated. In the absence of legislation, case law and technical standards that satisfactorily regulate these issues, contractual solutions are required between the cooperation partners in B2B (business-to-business) transactions, for which some approaches are outlined here. Key findings: • The multi-dimensionally networked industry 4.0 is approaching the limits of our bilateral understanding of contracts due to the virtualisation technologies used. • Data, and in particuliar industrial machine data, have no rights in rem attached. There is no data ownership. Although is legally protected in several respects, this protection remains fragmentary and incomplete. • Rights to must therefore be assigned by contract: It is advisable to follow the standards set by licence agreements from copyright law. Such contractual rights and obligations are only effective inter partes, but never in rem towards everybody. Data usage contracts must therefore be accompanied by effective technical and organisational measures for the de facto protection of data. • The German law on General Terms and Conditions, may regard liability limitations as ineffective even in business transactions. This, choice of foreign law clauses should be considered in the contract negotiations. • The networking of people, machines, virtualised and autonomous information technology systems makes it more difficult to attribute responsibility and prove causality. In the area of contractual liability, proof and presumption rules can be agreed. De lege ferenda, a compulsory insurance of the manufacturers and professional users as beneficiaries of such systems seems to make sense. • In all regulations, care must be taken to ensure that the right incentives for due diligence are in place for all parties involved.

Contractual Solutions for Digitalized Cross-Company Value Networks in Industry 4.0 - Part 1: Introduction

This series of papers deals with issues of contract law in Industrie 4.0. It is based on the law of the Federal Republic of Germany. Part 1 introduces the topic and explains the legal problems that arise in Industrie 4.0. Part 2 deals with issues of contract law: How are contracts concluded among autonomous software agents, what types of contracts come into question, and how must general terms and conditions be structured. Part 3 looks at issues of licensing law and intellectual property in data. Part 4 looks at the liability of autonomous systems in Industry and provides an outlook on possible future solutions. Industrial production is increasingly taking place in digitized value chains in which numerous independent companies cooperate in digital networks. Within the framework of such cross-company cooperation, industrial manufacturing processes autonomously manage themselves via integrated IT networks. This control increasingly makes use of intelligent systems that act either as autonomous software agents, in conjunction with humans or networked with other computers and machines. In addition to the industrial production process itself, parallel workflows of streams need to be handled, which is becoming more and more important. This results in specific situations and risks. Essentially, the questions to be answered are: • which legal status can be attributed to dataii that is generated in the production process, and • how can the liability in cross-company digital production networks be assessed and mitigated. In the absence of legislation, case law and technical standards that satisfactorily regulate these issues, contractual solutions are required between the cooperation partners in B2B (business-to-business) transactions, for which some approaches are outlined here. Key findings: • The multi-dimensionally networked industry 4.0 is approaching the limits of our bilateral understanding of contracts due to the virtualisation technologies used. • Data, and in particuliar industrial machine data, have no rights in rem attached. There is no data ownership. Although is legally protected in several respects, this protection remains fragmentary and incomplete. • Rights to must therefore be assigned by contract: It is advisable to follow the standards set by licence agreements from copyright law. Such contractual rights and obligations are only effective inter partes, but never in rem towards everybody. Data usage contracts must therefore be accompanied by effective technical and organisational measures for the de facto protection of data. • The German law on General Terms and Conditions, may regard liability limitations as ineffective even in business transactions. This, choice of foreign law clauses should be considered in the contract negotiations. • The networking of people, machines, virtualised and autonomous information technology systems makes it more difficult to attribute responsibility and prove causality. In the area of contractual liability, proof and presumption rules can be agreed. De lege ferenda, a compulsory insurance of the manufacturers and professional users as beneficiaries of such systems seems to make sense. • In all regulations, care must be taken to ensure that the right incentives for due diligence are in place for all parties involved. [ The original German version of this text is avialable at Contratcual Solutions for Industry 4.0. Part 1: Introduction by Arnold J. F. Lukas, LL.M. :: SSRN ]

In support of "no-fault" civil liability rules for artificial intelligence.

Civil liability is traditionally understood as indirect market regulation, since the risk of incurring liability for damages gives incentives to invest in safety. Such an approach, however, is inappropriate in the markets of artificial intelligence devices. In fact, according to the current paradigm of civil liability, compensation is allowed only to the extent that “someone” is identified as a debtor. However, in many cases it would not be useful to impose the obligation to pay such compensation to producers and programmers: the algorithms, in fact, can “behave” far independently from the instructions initially provided by programmers so that they can err despite no flaw in design or implementation. Therefore, application of “traditional” civil liability to AI may represent a disincentive to new technologies based on artificial intelligence. This is why I think artificial intelligence requires that the law evolves, on this matter, from an issue of civil liability into one of financial management of losses. No-fault redress schemes could be an interesting and worthy regulatory strategy in order to enable this evolution. Of course, such schemes should apply only in cases where there is no evidence that producers and programmers have acted under conditions of negligence, imprudence or unskillfulness and their activity is adequately compliant with scientifically validated standards.

Liability for AI: public policy considerations

Liability for AI is the subject of a lively debate. Whether new liability rules should be introduced or not and how these rules should be designed hinges on the function of liability rules. Mainly, they create incentives for risk control, varying with their requirements – especially negligence versus strict liability. In order to do so, they have to take into account who is actually able to exercise control. In scenarios where a clear allocation of risk control is no longer possible, social insurance might step in.This article discusses public policy considerations concerning liability for artificial intelligence (AI). It first outlines the major risks associated with current developments in information technology (IT) (1.). Second, the implications for liability law are discussed. Liability rules are seen conceptualized as an instrument for risk control (2.). Negligence liability and strict liability serve different purposes making strict liability the rule of choice for novel risks (3.). The key question is, however, who should be held liable (4.). Liability should follow risk control. In future scenarios where individual risk attribution is no longer feasible social insurance might be an alternative (5). Finally, the innovation function of liability rules is stressed, affirming that appropriate liability rules serve as a stimulus for innovation, not as an impediment (6.).

Equilibria under Liability Rules: How the Standard Claims Fall Apart

In many accident contexts, the accident harm depends on observable as well as unobservable dimensions of the precaution exercised by the parties involved. The observable dimensions are commonly referred to as the `care' levels and the unobservable aspects as the `activity' levels. In a seminal contribution, Shavell (1980) extended the scope of economic analysis of liability rules by providing a model that allows for the care as well as activity level choices. Subsequent works have used and extended Shavell's model to predict outcomes under various liability rules and also to compare their efficiency properties. These works make several claims about the existence and efficiency of equilibria under different liability rules, without providing any formal proof. In this paper, we re-examine the prevalent claims in the literature using the standard model itself. Contrary to prevalent claims, we show that the standard negligence liability rules do not induce equilibrium for all the accident contexts admissible under the model. Under the standard model, even the `no-fault' rules can fail to induce a Nash equilibrium. In the absence of an equilibrium, it is not plausible to make a claim about efficiency of a rule per-se or vis-a-vis other rules. We show that even with commonly used utility functions that meet all the requirements of the standard model, the social welfare function may not have a maximum. In many other situations fully compatible with the standard models, a maximum of the social welfare function is not discoverable by the first order conditions. Under the standard models, even individually optimum choices might not exist. We analyze the underlying problems with the standard models and offer some insights for future research on this subject.

Pushing Back on Stricter Copyright ISP Liability Rules

For more than two decades, internet service providers (ISPs) in the United States, the European Union (EU), and many other countries have been shielded from copyright liability under “safe harbor” rules. These rules apply to ISPs who did not know about or participate in user-uploaded infringements and who take infringing content down after receiving notice from rights holders. Major copyright industry groups were never satisfied with these safe harbors, and their dissatisfaction has become more strident over time as online infringements have grown to scale. Responding to copyright industry complaints, the EU in 2019 adopted its Directive on Copyright and Related Rights in the Digital Single Market. In particular, the Directive’s Article 17 places much stricter obligations on for-profit ISPs that host large amounts of user contents. Article 17 is internally contradictory, deeply ambiguous, and harmful to small and medium-sized companies as well as to user freedoms of expression. Moreover, Article 17 may well violate the European Charter of Fundamental Rights. In the United States, Congress commenced a series of hearings in 2020 on the safe harbor rules now codified as 17 U.S.C. § 512 of the Digital Millennium Copyright Act (DMCA). In May 2020, the U.S. Copyright Office issued its long-awaited study on Section 512, which recommended several significant changes to existing safe harbor rules. The Study’s almost exclusively pro–copyright industry stances on reform of virtually every aspect of the rules notably shortchanges other stakeholder interests. Congress should take a balanced approach in considering any changes to the DMCA safe harbor rules. Any meaningful reform of ISP liability rules should consider the interests of a wide range of stakeholders. This includes U.S.-based Internet platforms, smaller and medium-sized ISPs, startups, and the hundreds of millions of Internet users who create and enjoy user-generated content (UGC) uploaded to these platforms, as well as the interests of major copyright industries and individual creators who have been dissatisfied with the DMCA safe harbor rules.

Rethinking Product Liability Rules for Online Marketplaces: A Comparative Perspective

Rethinking Product Liability Rules for Online Marketplaces: A Comparative Perspective

Algorithms as Employees: Holding Corporations Accountable for Their Digital Workforce

The workforce is digitizing. Leading consultancies estimate that algorithmic systems will replace forty-five percent of human-held jobs by 2030. This is a well-documented and alarming trend for the millions of truckers, bankers, and line-workers whose jobs will become obsolete. But now that corporations are using algorithms like employees, another public threat that has received far less attention is also arising: a growing corporate accountability gap. One feature that algorithms share with the human employees they are replacing is their capacity to cause harm. Even today, algorithms discriminate against loan applicants, manipulate stock markets, collude over prices, and cause traffic deaths. Ordinarily, corporate employers would be responsible for these injuries, but the rules for assessing corporate liability arose at a time when only humans could act on behalf of corporations. Those rules apply awkwardly, if at all, to silicon. Some corporations have already discovered this legal loophole and are rapidly automating business functions to limit their own liability risk. This Article seeks a way to hold corporations accountable for the algorithmic harms of their digital workforce. It draws inspiration from responses to earlier corporate efforts to dodge liability by manipulating the formal boundary defining employment. For more than a century, corporations have sought to jilt victims and immunize themselves by shifting operations from employees to various non-employee laborers, like temps, contractors, and gig workers. Lawmakers and scholars have responded to each of these machinations by developing functional tests that recharacterize some of these workers as employees, thereby closing the corporate accountability gap. This Article proposes an analogous approach for algorithms: some algorithms should be treated, for liability purposes, as corporate employees. Drawing on existing functional characterizations of employment, the Article defines the concept of an “employed algorithm” as one over which a corporation exercises substantial control and from which it derives substantial benefits. If a corporation employs an algorithm that causes criminal or civil harm, the corporation should be liable just as if the algorithm were a human employee. This would allow plaintiffs and prosecutors to leverage existing, employee-focused liability rules to hold corporations accountable when the digital workforce transgresses.