Through the Other End of the Telescope

August 31, 2000

With more than 15 years’ industryexperience in marketing, strategic planning, and business building, Surtees isresponsible for Yahoo!’s e-commerce strategies, initiatives, and serviceswithin the Yahoo! network of Web properties. This is the advice he gives forlawyers concerned about legal reform and the Internet.

I met Tony Surtees on an express train heading from Kowloon island to the Chap LekKow airport. I was on my way home from the first Britain-China-Hong Kongconference on e-commerce for young lawyers, with questions about globalapproaches to the law still unanswered. He was sitting in the aisle across fromme in a leather jacket with the trade mark ‘’ emblazoned on theback. He was someone who looked like he carried the world on his shoulders. Icleared my throat. ‘Hello.’ I said, ‘Do you work for Yahoo?’

We began a conversation whichcontinued into the Business Lounge of Cathay Pacific in Hong Kong andrecommenced several days later at a café in Sloane Square. In that time, Tonymanaged to persuade me that my concerns about the fragmentary and parochialapproach to Internet law we see happening across the globe were unnecessary.

It took some persuading as I hadjust recently played the prophet of doom in an article for SCL (June/July 2000:Volume 11, Issue 2). My position was that the new e-commerce directive was goingto spell trouble for European governments. I had been concerned that, in itsreferences to the concept of ‘establishment’, the Commission was stillrelying on traditional notions of the manner and national location from which abusiness was run. One problem with this nation-centred approach to the law wasthat Internet law could be ridiculously easy to avoid. An Internet company coulddeliberately side-step the regulatory law of the country in which its targetaudience resided. A company targeting the German market, for example, andwishing to side-step onerous German advertising standards, need only base itsoperations in the UK.

But more profoundly, theCommission had failed to grasp the true nature of Internet commerce, which isessentially free from the concept of national boundaries. Cyberspace was a new,uncharted geographical space which required a new kind of rule. The attempts ofthe Commission to sketch onto this space a version of the existing legal map ofthe world would ultimately prove to be ineffectual. With this Directive, Europehad missed a chance to create a new law of ‘cyberspace’, a prototype‘cyber-convention’, which would have had real impact on the new technologyand the people involved with it.

Nor had I been convinced, afterthe conference in Macao, that lawyers could come together on an internationalscale, at least in the near future. It would require a huge leap of faith forcountries to start regulating the Internet with a global view. Bilateralismcould work in a limited way with countries putting together projects on anad-hoc basis. The focus of the conference was adapting someone else’s laws tosupplement your own as opposed to creating an entire new concept of law to applyto all cyberspace. From what I had seen, it appeared that the political willrequired was several decades away.

‘You may be right,’ saidTony (or ‘Big T’ as he is known to Jerry Yang and the folks at Yahoo).‘but you are approaching matters from the wrong end. The law is now and willalways inevitably be unable to keep pace with the new order. Regulatory bodiesand authorities can only respond after the event to what constituencies wantthem to do. More often than not, technology will move on and the regulation willnot have an impact on it. The truth is that at a purely practical level noregulation will be effective which flies in the face of WALT.’

WALT? Like all Internet users, Iam an acronym addict but this was new. ‘Big T’ explained: Yahoo divides theworld, not according to national boundaries, but according to the dictates ofWealth, Age, Language and Taste. There are no national lines in the Yahoouniverse, only conceptual ones. Language is the primary determinant and, to thatextent, there was some intersection with established notions of sovereignstates. However, that intersection was only incidental. The other factors ofwealth, age and taste would feed into the formula to create a unique marketingprofile which took it well beyond a national identity. In this way Yahoo seesthe world as a series of markets: the US, the Anglophone world, the Chinese, theGerman, Spanish, French, and so on.

‘The point is that regulation only lives at the fringes of this perspective. This is because Yahoo thinks global and executes locally. This is to say that in each country where its site is available it consults with local lawyers to make sure that nothing it does is in breach of the laws of that state. It is wrong for you to think that law has a central role to play in defining the future of the internet. That is your mistake. Because of the speed at which technology develops, the law as we know it can only ever provide a rearguard action.
The Internet is too young, too exploratory, too in need of thinkers and searchers to take it forward to spend time worrying about those who bring up the vanguard of critical thought.
If the law is ineffective, let it be so for now. Rather than waste time criticising what is, you should be thinking about ways to take your client’s business forward so that the laws don’t hold him back. Accept the fact that what happens now is unprecedented in commercial history. As an Internet lawyer, you will find that, ten-to-one, your client is one of the young messiahs of our time. Rather than worrying about the state of the law in Rome, you should be worrying about what the new order is going to be. Try to make the rite of passage of these young entrepreneurs as smooth as possible.’

Tony went on to explain that lawyers should be attuned tothe business models of their clients in terms of sustainable business models.

‘Only these survive. You have to keep one eye on the reasonable. It will often be your job to draw a line between the challenging and the idiotic, the enticing and the stupid. In search of precedents that work, you should be looking for a particular model. Look for the greatest volume in that particular area with which you are concerned (which, with the Web, you will find is often the US, but not invariably) and draw from real life examples. Create precedents which may apply within a local context and be prepared to take initiative in testing regulatory and commercial boundaries that apply within a local domain.’

It was hard to accept that as lawyers, insofar aslegislation is concerned, we are virtually certain to be in the rear seat forthe rest of the Internet ride. But with perseverance, shrewdness and an eye forwhat the clients want to hear, we should be in for the long haul.

The author, Wren Kukanesen, is completing a training contractand will shortly be joining Bird & Bird as an assistant solicitor. She canbe contacted at now–