Network Power: Forced and Free

A friend from law school, David Grewal, has recently published Network Power (presently advertised at left). I’m happy to see the book favorably reviewed in the FT by Christopher Caldwell, and I hope to see more attention to it. Grewal’s fundamental insight is that the “individual choice” celebrated in markets (and many other settings) is often simultaneously both “forced and free:”

[T]he network power of English isn’t the result of any intrinsic features of English (for example, “it’s easy to learn”): it’s purely a result of the number of other people and other networks you can use it to reach. . . . The idea of network power captures the ways in which the systematic features of our social world emerge from human action and remain intelligible in light of it, even while they constrain us in ways that do not reduce straightforwardly to the power of command. It explains how the convergence on a set of common global standards is driven by the accretion of individual choices that are free and forced at the same time.

The idea of “network effects” is a familiar one to legal economists, and I have critiqued self-defeating “arms races” of positional competition that erode human welfare. Grewal’s book contributes to these conversations by transcending economic analysis and examining the political, sociological, and philosophical implications of network formation and standards adoption.

Though Grewal’s discussion of gold and English as economic and linguistic standards is fascinating, his discussion of technical standards may be of most interest to lawyers. Both Microsoft Word and the ISO 9000 standards gained power in a self-reinforcing way; as more people adopted them, others anticipated their further adoption and “fell into line” in promoting the standards. Grewal worries that “privately owned technological standards not only [threaten] the freedom of users to choose the best standards for their needs . . . [but also result in] . . .a great deal of power [being] handed over to the private owner of that standard.” What to do in response?

I tend to think that one answer is to treat dominant standards or platforms as infrastructural, or even as sharing characteristics with public utilities. I think that Google is a prime example of network power, and spin out some implications in this paper. My basic contention is that the network effects and governmental interventions we readily see as crucial to the success of telephone and cable companies also played a role in Google’s rise, and that it makes sense to impose some of the basic obligations of these older carriers on new web “bottlenecks” that similarly shape the fundamental structure of online life. Perhaps dominant social networks are the next logical place to extend the analogy.

There are going to be many battles in coming years over the management of information flows online. Grewal’s work should remind us throughout these debates that the rise of any one dominant network player–be it in search, social networking, or carriage of bits–has as much to do with “force” as “free choice.” Just as Robert Hale noted that leading businesses of his day were dependent on mutable laws that could easily shift favor from one corporate player to another, Grewal has given us reason to re-examine the bases of the success of today’s new economy juggernauts.

The so-called “free development” of dominant Web 2.0 intermediaries was itself a product of particular legal choices about the extent of intellectual property rights and the responsibilities of intermediaries made in legislative and judicial decisions in the 1990s. For example, many fortuitous legal and regulatory decisions paved the way to Google’s success. Perhaps its technology in search was and is better than any search engine competitor. But its uniquely dominant place in the internet ecology could have been snuffed out at many points over the past 10 years. Various entities have tried to bring Google to heel–including telcos, cable companies, content providers, search engine optimizers, trademark owners, and consumer advocates. In traditional information law, claims under trademark, defamation, and copyright law might pose serious worries for the company. However, communications and intellectual property law provide safe harbors that can trump legal claims sounding in each of these other areas. Immunities from tort liability provided under the Communications Decency Act (“CDA”) were originally intended for carriers regulated by the Federal Communications Commission, but have been extended by courts to cover search engines

Conditioning continued enjoyment of the rights won by online intermediaries in those decisions on some transparency and public service commitments is a legitimate response their growing importance to our collective lives. Once we recognize the inextricable intertwining of “force” and “freedom” in the network power that structures online life, we can better start balancing intermediaries’ rights with the responsibilities that publicly accountable standards should bear.

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