By
Oyetola Muyiwa Atoyebi, SAN, FCIArb.
The emergence of this new digital economy has significantly ignited a lot of conversation and repositioning from the legal perspective. Questions around the adoption of these platforms in the various legal systems, and of how to use these platforms in providing legal services are rife.
INTRODUCTION
The global economy has seen a tremendous shift in the way business is being conducted, and traditional corporations face a real threat of being substituted if they don’t adapt and employ the tools of the new economy in the conduct of their business. The new economy is based upon the acquiring, providing and distribution of goods and services, using technological assets. It is a community operated by and on digital platforms that facilitate the coming together of different people from different places, to share resources and enter into all types of arrangements, on digital platforms.
Indisputably, almost all aspects of our economy have been revolutionised; the financial services sector has experienced immense transformation, Airbnb and Uber changed the transportation and hospitality industry as we knew it, the health sector in many economies today is all platform-driven; the bulk of the media run on digital platforms today, as social media has provided an alternative to traditional media. These are only a few examples, others include the mobility industry, energy, entertainment, human resources, retail and consumer goods.
Access over ownership signifies a paradigm shift from the conventional economic system, as it allows individuals and corporations to utilise products or services without buying them. This according to Marcelo[1], is the sharing economy.
THE SHARING ECONOMY
The sharing economy is widely facilitated on decentralised platforms generally categorised into two: individuals and corporations own and share their assets with others[2], or they own and lend them to others for use. According to SupplyChain[3], “Once worth $15 billion in 2014, the sharing economy is set to grow in value by $320 billion in the space of a decade.” PriceWaterCoopers projected the growth to reach $335 billion in 2025.[4] This indicates the volume of transactions carried out on these platforms, and most of the technologies are at a nascent stage, signifying immense potential and growth moving forward. We have barely begun to scratch the surface of the possibilities of innovation and dynamic capability behind this new economic model[5].
Expectedly, these innovations have come with a myriad of unprecedented legal problems. Law in its essence is transformative, but these technologies are transforming the legal landscape around the world even more rapidly. There exist a threat of extinction or stagnation for lawyers who do not hop on the train of this assured growth. Technologies like Artificial Intelligence, Internet of Things, Machine Learning, Cloud Computing, BigData, web3, Blockchain and other algorithm and autonomous systems continue to reshape our legal issues and directly confront how legal services are deployed.
Take as an example, most of the digital platforms employed within the sharing economy are built on cloud-computing infrastructures in order for them to operate at an optimal level. Cloud computing is simply a model for delivering software and other IT resources through computer networks. The software typically sits on one or more central computers, known as servers, and the customer’s users access it remotely. Descriptively, it’s nothing more than a vendor providing remote access and use to its computers and software. Cloud services are broadly classified into: Software-as-a-Service (SaaS)[6], Platform-as-a-Service (Paas)[7]and Infrastructure-as-a-Service (Iaas)[8], where a vendor hosts server computers and other hardware infrastructure[9].
The implication of these services see lawyers draw up different variations of agreements under the broad category of: software licence agreements, software ownership agreements, IT professional services agreements, cloud services agreements and combination agreements, all of which traverse the fields of intellectual property, organisational structure, regulatory compliance and other legal matters. Businesses are increasingly data and algorithm-driven, using the various decentralised platforms the new economy provides. Cryptocurrencies have crept into our financial markets and products such as Bitcoin and Ethereum, built on trust systems like blockchain, smart contracts and other distributed ledger technology all contribute to form part of this new sharing economy.
These developments, along with their benefits, come with a lot of complexities, especially regarding how information is processed and analysed on a larger scale[10]. The emergence of this new digital economy has significantly ignited a lot of conversation and repositioning from the legal perspective. Questions around the adoption of these platforms in the various legal systems, and of how to use these platforms in providing legal services are rife. The aim of this article is not necessarily to answer the questions, but to expand the discussion by exposing the nature of some of the questions, and by so doing, trigger a discussion and repositioning of the Nigerian legal landscape to accommodate these changes, and also to propel young lawyers to take advantage of this new reality.
This is buoyed by the increasing awareness that the traditional concepts and approaches of the law must be flexible and expanded, to accommodate new areas associated with this new economic model.
BRANCHES OF THE SHARING ECONOMY
The challenges posed by this new economy are diverse and inter-disciplinary. It traverses across sharing economies and platforms, digital age and personal data, blockchain and code, autonomous systems and future challenges.[11] Sharing economies and platforms cut across the different aspects of digital platforms, from the likes of information sharing social media like Twitter, movies sharing platforms like Netflix, to platforms for building collaboration and the governance of cities in real-world settings, like the sharing cities in Seoul, Japan[12]. The primary subjects of the digital age and personal data are the digital persons and the protection of personal data.
There is a continued discussion about who a digital person is in a legal context, in light of the transformative nature of Artificial Intelligence. This invariably affects the role of the future lawyer as it would potentially affect the make-up of the new global architecture. This feature also focuses on the protection of the personal data of individuals in varying contexts. There has been a lot of discussions around consent under the General Data Protection Regulation (GDPR), which is the bedrock of the Nigerian Data Protection Regulations (NDPR). These laws grant individuals more control of their data when using digital platforms, and also pose challenges around their extent, practicability and flexibility within modern processing technologies.
Blockchain and code raise questions about the interface of legal issues and blockchain technologies, and how legal checks can be embedded in the code of computer software. Lawyers would have to reinvent themselves in order to provide top-quality services at the early stage of these technologies. For example, the use of data by a collecting entity operating on a software or blockchain system, Anti-Money laundering checks and other legal compliances and requirements. The blockchain has been massively hyped and experts believe it would revolutionise the world as we know it.[13]
Mark Fenwick[14], in discussing the importance for lawyers and law students to learn how to code, argues that Legal Technology (Legaltech) is profoundly disrupting the legal profession and the development of cutting-edge technologies. Technologies such as blockchain, AI and smart contracts etc. have triggered the emergence of new business models. He goes on to say that since all these technologies are code-based, lawyers, as active transaction engineers, need to be able to understand and communicate the language of codes, so as to effectively participate in the design and operation of these technologies.
There are two primary legal issues around blockchain technology. The first is the intellectual property related issues of open source software on which blockchain technology is based, and the other is how to guarantee the authenticity of e-Apostilles[15] by using blockchain technology. An example of one of these issues, a clash between trade secret and copyright can be seen in the Korean case of ElimNet, Inc. v. HaionNet, Inc[16] where the court held, on an issue around a General Public License (GPL) that “the source code of a modified computer program can be a trade secret in the case where the copyright owner of the derivative computer program, which amended the virtual private network OSP to which the GPL condition was lined, refused to disclose the source code of the modified computer program in violation of the General Public License.”
Regarding autonomous systems and future challenges, the legal implications of an autonomous car remain at the forefront, with the likes of Tesla going global, and also the creation of AI robots and robotics systems. The vexed legal issues plaguing autonomous driving include: the allocation of liability in events of crashes and accidents, is it the AI itself or the automated system software developer? What’s the insurance policy structure going to look like? There are also questions on what is the most appropriate balance between minimising the number of accident victims and allowing for an efficient flow of traffic[17], and similar questions alike.
Another hotly debated issue around autonomous systems and future challenges is the legal implications of adversarial machine learning. For example, research reveals that changes, or perturbations to a picture, even in small size, may disable a deep neural network from correctly identifying the fine details of the picture. This research was applied to traffic signs and the results were catastrophic. A stop sign was recognised as a speed sign. Visualisation technology is yet to successfully confront this problem; thus, questions abound as to who would be liable for accidents caused by the technology.[18]
CONCLUSION
This article is aimed at progressing the discussions around the new economic reality before us. These realities have created multiple regulatory challenges for policymakers as they struggle to come to terms with the rapid developments in this economy. This is also the case for legal practitioners, as their services are pertinent for the successful integration into this economy. This has necessitated the call for legal practitioners, especially in Nigeria, to join in these conversations and find a niche for themselves.
The conventional concepts of legal science are becoming increasingly obsolete, and where they are not, there are needs for innovative approaches and alternatives to tackle the range of legal issues the sharing economy brings forth. This serves as a prompter for scholars, students, practitioners, software developers, managers and experts interested in the up-to-date legal analysis of current trends, related to new technologies and the emerging sharing economies, to get involved in the discussion to participate and proffer solutions. Thanks to platforms like mEd[19], Lexology, LegalBusinessWorld, and others like them, information regarding the role of law and legal practitioners in this new economy is easily accessible in real-time.
All these platforms are products of the developments in the sharing economy, and are also hosted and powered on platforms developed as a result of the sharing economy.
AUTHOR: Oyetola Muyiwa Atoyebi, SAN, FCIArb. (UK).
Mr. Oyetola Muyiwa Atoyebi, SAN is the Managing Partner of O. M. Atoyebi, S.A.N & Partners (OMAPLEX Law Firm) where he also doubles as the Team Lead of the Firm’s Emerging Areas of Law Practice.
Mr. Atoyebi has expertise in and a vast knowledge of Law and this has seen him advise and represent his vast clientele in a myriad of high level transactions. He holds the honour of being the youngest lawyer in Nigeria’s history to be conferred with the rank of a Senior Advocate of Nigeria.
He can be reached at atoyebi@omaplex.com.ng
COUNTRIBUTOR: Ibrahim Wali.
Ibrahim is the Team Lead of the of the Dispute Resolution Team OMAPLEX Law Firm. He also holds commendable legal expertise in various new and emerging areas of law. He is passionate about the impact of new technologies on legal practice.
He can be reached at ibrahim.wali@omaplex.com.ng.
[1] Legal Aspects of Decentralised and Platform-Driven Economies, Marcelo Corrales Compagnucci, Toshiyuki Kono and Shinto Teramoto
[2] Bolt, Lyft, Taskrabbit etc
[3] Tom Wadlow, ‘The Sharing Economy Will Be Worth $335 Billion By 2025’
<https://supplychaindigital.com/logistics/sharing-economy-will-be-worth-dollar335-billion-2025> accessed 24th June 2022
[4] PriceWaterCooper sharing or paring? Growth of the sharing economy 2015.
[5] Gazzola P (2017) Behind the sharing economy: innovation and dynamic capability.
[6] For example: Dropbox, SalesForce, Cisco Webex.
[7] Google App Engine, Apache Stratos and OpenShift.
[8] Amazon Web Services (AWS), Cisco Metapod and Microsoft Azure
[9] David W, Tollen, The Tech Contracts Handbook, Cloud Computing Agreements, Software License, and Other IT Contracts for Lawyers and BusinessPeople.
[10] Tandon A, ‘Cloud Computing and Birth Of The Sharing Economy. What Are the Dominating Trends?’ <https://altimetrik.blog/2018/06/27/cloud-computing-birth-of-the-sharing-economy/> accessed 24 June 2022.
[11] Ibid 1.
[12] https://use.metropolis.org/case-studies/the-sharing-city-seoul-project accessed 24 June 2022
[13] <https://omaplex.com.ng/wp-content/uploads/2021/12/BLOCKCHAIN-POTENTIALS-FOR-TAX.pdf> here, the taxation potentials of blockchain is explored.
[14] Mark Fenwick, Wulf A. Kaal and Erik Vermeulen, Legal Education in a Digital Age: Why Coding Matters for the Lawyer of the Future. Springer Nature Singapore Pte. Ltd 2020. In M. Corales Compagnucci et al. (eds.) Legal tech and the New Sharing Economy
[15] An e-apostille means that the authentication of foreign public documents is carried out electronically and not in paper form. The E-Apostille has a secure electronic signature and date. The validity of an E-Apostille can be verified online at an official e-Registry where the identification number of the e-Apostille can be found and proved.
[16] Korean Supreme Court Decision on February 12, 2009, pp. 1-4 (Case No. 2006 Do 8369)
[17] <https://assembly.coe.int/LifeRay/JUR/Pdf/DocsAndDecs/2020/AS-JUR-2020-20-EN.pdf> accessed June 24, 2022
[18] See Steven Van Uystel and Danilo Vasconcellos Vargas, Adversarial Machine Learning: A Blow to the Transportation Sharing Economy. Springer Nature Singapore Pte. Ltd 2020. In M. Corales Compagnucci et al. (eds.) Legal tech and the New Sharing Economy
[19] mEd is an edTech app for University law students, Nigerian Law School students, as well as lawyers interested in both the conventional and the emerging areas of law. It is founded by Mayowa Adegoke.