The Irrelevance of the First Amendment to the Modern Regulation of the Internet

• Publication year: 2014
• Author: Richard Epstein

THE IRRELEVANCE OF THE FIRST AMENDMENT TO THE MODERN REGULATION OF THE INTERNET

Richard Epstein¹

I. INTRODUCTION

One of the most vexing challenges to any legal system is to answer this question: Should established legal principles be modified with the advent of new technologies that in turn require the creation of new property rights? The trivial answer is simply "yes." It is a commonplace observation that the creation of new property rights regimes is often dependent upon the creation of new technologies. For example, no one was in a position to ask who owned the electromagnetic spectrum—at least at invisible frequencies—until the technology became available to exploit it. But once communications through the spectrum became possible, someone had to organize it, lest physical interference in the use of frequencies render it useless for all concerned. Does this new generation of regulation pose a problem for the protection of speech under the First Amendment? Does it, for that matter, pose any difficulties under conventional conceptions of the antitrust law? After all, any exclusive system of property rights in the spectrum necessarily blocks the speech rights of all individuals except for that favored owner.

The answer to these and similar questions does not depend on the novelty of, for example, spectrum, for the same answer could also be made with respect to land. As Pierre-Joseph Proudhon famously observed, "property is theft"² because its creation limits the rights of non-owners to access land as they could have before it was reduced to private ownership. Whether Proudhon's observation is false, it does not carry the weight that he sought to attach to it with either land or the electromagnetic spectrum. In both instances, if you leave property in a commons, no individual is in a position to exploit it. Allow the first possessor to make exclusive use of it, and, for example, agriculture and manufacturing become possible. Other individuals can reduce other parcels of land to private possession, and the persons who start out without property can acquire wealth by labor or land by purchase.

The key observation in this article is that identical arguments carry against any claim that individual efforts to reduce the spectrum to private ownership necessarily violate other individuals' free speech rights. The organization of the spectrum, for example, creates a coherent set of property rights that allows more speech to be heard over time than under any alternative arrangement. Any limitation of speech in the individual case is more than offset by the overall social gains. The First Amendment does not let any and every person speak as he pleases wherever he pleases. Instead, all claims for freedom of speech have to be embedded within a system of property rights that gives some individuals exclusive control over key resources. For example, under the law of copyright, it is not a violation of your free speech rights for me to enjoin your publication of an infringing copy of my book.³

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To be sure, there have always been some well-defined exceptions to the exclusive use of one's own property. For example, people can enter the land of another in order to save their own lives. More relevant here, the law of copyright recognizes the privilege of "fair use," whereby others can quote short passages from works that they wish to criticize, lest all criticism be stopped. Property rights, be they physical or intellectual, are not absolute, and their exercise is of course subject to conventional antitrust limitations on the creation or exploitation of monopoly power.

The same is true of rights to speech. Although it is a presumptive violation of the right of free speech to impose restrictions on the use you may make of your own telephone or printing press, it is not a violation of your rights to free speech for me to say that you cannot enter my house to use my telephone or printing press against my will.⁴ By the same token, all speakers in a given industry cannot collude to raise prices and divide territories.⁵

In all cases, freedom of speech must always be embedded in some larger system of property rights for it to be coherent. People do not have the right to trespass on the lands of others in order to voice their messages. Indeed, the one case that hinted at this approach, PruneYard Shopping Center v. Robins,⁶ applied only to the distinctive setting of shopping centers, which are analogous to traditional public forums like streets and parks. The approach has never been applied, for example, to residential apartment complexes.⁷ There are too many alternative ways for speakers to reach their intended audiences without having to commandeer the property of others. Likewise, newer technologies create tensions between property and speech rights, but in the end these tensions are generally amenable to the same solution: Establish the basic systems of property rights correctly, and any concerns with the protection of speech take care of themselves, by the general protections against the use of force (and the threat of force), misrepresentation (and concealment), and monopoly. But if that property rights system falters, no invocation of the First Amendment is able to restore balance to the overall system.

In order to illustrate these problems, I shall look at the following questions. The first asks whether the First Amendment trumps the law of trade secrets. The second asks whether the First Amendment limits website owners from restricting unauthorized entry by other users. The third asks whether the First Amendment restricts the application of the principles of rate regulation and antitrust to new technologies in the common carrier setting. In all these settings, the answer is the same. If one understands how property and speech fit together as a matter of first principle, nothing in the Constitution requires that the First Amendment trump, limit, or restrict the outcomes in any of these three scenarios. There is less novelty here than meets the eye. Technology becomes a diversion that does not alter the guiding principle.

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II. TRADE SECRETS

In most situations, there is little conflict between the First Amendment and the law of trade secrets. In business, one who steals a trade secret has every incentive to keep his theft secret. The value of a trade secret lies in the extent to which the use of particular information necessarily supplies some competitive advantage to the person who holds the information over those without it. The benefit of that trade secret can be confined to its owner, or the secret can be licensed to other individuals subject to conditions of confidentiality, on an exclusive or nonexclusive basis. But in both cases the value of the secret lies in the ability to restrict the class of individuals who use it. Nobody has any incentive to let the world in on a good idea for free. Indeed, in typical commercial settings, the last thing that the thief of any trade secret wants to do is announce his success publicly to the rest of the world, and thus lose the value of what he has stolen.

But this iron logic of trade secrets does not apply when the theft of a trade secret occurs not for private profit, but rather for political ends advanced by disclosing the trade secret publicly. Two famous instances of this behavior occurred over a decade ago, in Ford Motor Co. v. Lane and in DVD Copy Control Ass'n, Inc. v. Bunner.

In Ford Motor Co. v. Lane,⁸ the Ford Motor Company sought to enjoin the publication of key business plans that had been leaked by a Ford employee to Lane, who published that information on his own website. The subsidiary issue was whether an injunction of that speech violated the First Amendment prohibition on prior restraint given that the defendant knew he had received the information from an unauthorized source.

The district court took a wooden approach to First Amendment law by applying the normal First Amendment prohibition on prior restraint to the stolen material, which resulted in a denial of the injunctive relief sought. I regard that outcome as a serious categorical error. It is of course the case that injunctions should not be issued to restrain the publication of defamatory speech. In that area, prior restraint carries the serious risk of suppressing vital speech critical of either a key government official or public figure. The safer course is to let the speech be published, so long as the aggrieved party retains the ability to sue for a damages remedy in cases of defamatory harm.

The situation is, however, wholly different with the illegal disclosure of trade secrets, whose value is lost with public disclosure, and for which a damage award is a weak substitute for injunctive relief that preserves the exclusive right of use. Nor does the unauthorized publication of technical specifications for a new product, a customer list, or a litigation strategy rate First Amendment protection, when none of these could be pried out of their owner by legal process.⁹ In this respect, the proper analogy is to the bad faith purchaser of stolen goods, who nowhere gains rights superior to those of the original thief under private law.¹⁰ And once the owner of a trade secret can enjoin its publication as of right by those who have come unlawfully into its possession, it follows that any third person who receives that trade secret should be subject to the same relief if he knows that the information in question has been purloined from its owner. In this context, the law of freedom of speech should never confer some special immunity on the press for tort liability that would not be granted to any other bad faith recipient of stolen property whose value is diminished or destroyed. Never encourage a senseless cat-and-mouse game by adopting a consciously inferior set of remedies that allow the holder of a trade secret to use any and all measures of self-help to protect that secret,¹¹ while denying a call for legal...