ChicagoKent College of Law Regulation of new technologies Common issues How did the rules get made Whats the content of the rules price conduct product specifications Who enforces them ID: 780813
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Slide1
Henry H. Perritt, Jr.Professor of LawChicago-Kent College of Law
Regulation of new technologies
Slide2Common issues
How did the rules get made?
What's the content of the rules?
price
conduct
product specifications
Who enforces them?
Who second guesses them?
Slide3In a market economy, the “invisible hand” decides what is produced and who consumes it
Slide4The default political condition for private economic transactions is laissez-faire.
Slide5Lawmakers move away from this default position when they are convinced some type of market failure is occurring.
Two basic types of market failure
barriers to competition
externalities
Slide6Barriers to competition
Natural monopolies
the bigger you get, the more efficient you are
f(economies of scale)
Artificial barriers
intellectual property
discrimination (Net Neutrality)
including refusals to deal
iefusal
to allow use of interface standards
Slide7Externalities
Someone else bears the cost of a shortcut
Poison the neighbors’ children by dumping toxic chemicals in the creek
Scrimp on design, manufacture, or safety inspections so that the wing of an airliner comes off
Slide8Tools
Common law liability
Insurers cause insureds to internalize tort liability
Prescriptive rules
Regulatory responses usually are a mixture of both; consider
water pollution
air safety regulation
Slide9Making rules (legislating and administrative rulemaking)
Intellectual capital
Broad or specific?
Performance standards or engineering standards?
“No one may transmit a signal that interferes with another signal”
“No one may transmit a the signal with a power greater than 15 µV/m @ 30 m”
Slide10Licensing
No one may transmit a radio signal unless he has an appropriate license granted by the Federal Communications Commission.
No one may fly an aircraft unless he holds an airman certificate granted by the Federal Aviation Administration
Pros:
Rulemaking can become a part of the licensing process
Gives the regulator an additional sanction – license revocation or suspension
Cons
More intrusion into marketplace
More regulatory infrastructure required
Slide11Licensing reach
No certificated airman may fly an aircraft unless it is airworthy
An aircraft is not airworthy without a plaque with 16 point type affixed to the cockpit door
Slide12Adjudication
Applying the rules to the facts
No one may fly a drone between sunset and sunrise
I was flying at 5 o'clock in the afternoon.
Slide13Enforcement
Fines
Civil penalties
License revocation
Other exclusion from the marketplace
Incarceration
Disgorgement
Forfeiture
Slide14Who adjudicates and imposes sanctions?
private parties or associations
administrative agencies
courts
Slide15Standing
Private criminal complaints
Private right of action
Agency adjudication
Agency goes to court
Civil action
Criminal prosecution
Justice Department
Slide16Private (self) regulation
Usually involves an association of
regulatees
Securities Regulatory Organizations (SROs) regulate brokers and dealers
State bars regulate lawyers
Domain-name registrars through ICANN (sort-of) regulate the Internet
ABA and AALS regulate law schools
Credibility and compliance depends on the power to exclude
Slide17Level of government
Federal
State
County
Municipal
Mix & match