Event Recording

Doc Searls - When the Customer Becomes the First Party

The time is coming when customers have the upper hand, and companies agree to their terms rather than the other way around. Doc Searls, leader of the VRM (Vendor Relationship Management) movement, co-author of "The Cluetrain Manifesto", and author of "The Intention Economy: When Customers Take Charge", will explain how customer independence and empowerment will make the GDPR’s dreams come true—for both regulators and companies, as well as for customers themselves.

Actually, you shouldn't have waited for the music to, oh my God, no problem. Okay. You're you are a fellow of the Berkman center of internet and society.
Actually, I'm an alumnus fellow of the center, but I continue to run a project there called project VRM. Okay. And some of it I'll be talking about now is a spinoff of that. Okay.
Goes, thank you very much. So in 1943,
A law professor in the us named Friedrick Kessler produced a landmark paper with the box office, named contracts of adhesion, some thoughts about freedom of contract. And it was really kind of a eulogy, a Requiem for freedom of contract and freedom of contract. He explained. And the lawyers among us know is one of the graces of civilization is the ability that all of us have any two parties, any two people, any two organizations to make a law of their own contract law really only comes into play when there are disputes and you look at the contract, the government looks at the contract and a decision is reached about that. But what makes the world run to a large degree still today with small business, but not necessarily with gigantic ones in respect to consumers is freedom of contract. These laws we make under ourselves that going back to even cave days, if one party exchanged some arrowheads for a basket of berries, there was a contractual understanding.
There both parties understood that they were getting something of positive value out of that. So contracts of adhesion were what buried freedom of contract. When industry won the industrial revolution. When industry won the industrial revolution, we lost a lot of our own freedoms in order to make the industrial system work. And what we lost in the, in the legal framework was freedom of contract. You had to have scale of large industrial organizations and the, and a contract of adhesion, a standard form contract allowed a company to do with law. What they also did say with a factory, which is make one thing or a few things for a great many people, you could have one standard form contract for a hundred, a thousand or a million people. And what made it a contract of adhesion was that you could actually change the terms on your side. If you were the first party, if you're the company making a car or making
Cloth, whatever it was, you could change the terms of that contract. Just like you might change features of the products that you make. This is a grace, excuse me, of contracts, of adhesion. And this actually allowed civilization in the industrial age to thrive. It's one of the great inventions. And that's what Kessler said about it. This is actually a very good thing, but he lamented that in the order to get that we actually had to give up this thing that we'd had for thousands of years, which is freedom of contract, but Kessler never saw the internet. He didn't know what the internet was. He was decades away from that. And the internet changes everything. As we know the internet we have today has really only been around since 1995 and 1995 is when there was a, a backbone network within the internet called the NSF net, that forbid commercial activity.
And when they stood down and said, we're not gonna bother with that anymore. All of a sudden commercial activity could explode and we've been experimenting with this ever since, and it's all good stuff, but it's, but the future is very unevenly distributed as, as, as William Gibson put it. And we don't, haven't had freedom of contract on the inner date yet, but we can. And that's what I'm here to talk to you about. But in a way to getting there, we've gone through some really difficult times because what we've had is, is OB obedience to laws that Shahan, Zubov laid down all the way back in the 1980s. Shahana Zubov is a now retired professor at Harvard business school. And she said in her three laws that these things happen with technology first, whatever can be automated, will be automated. Whatever can be informed, will be informed by that.
She meant whatever can be digitized, will be digitized. Everything will be turned into bits and we can turn those bits into information. And the third thing is, whatever technologies can be used for surveillance and control will be used for surveillance and control unavoidably. And that's why we have the GDPR. And that's why all the sessions this morning, DWT on the GDPR. And that's why the GDPR is on many of the boos that we see up here. We had to make laws to deal with the fact that surveillance is out of control, that what can be done in technology will be done in technology. We have atomic power, we can make a bomb, we're gonna use it. And then we start civilizing around that and say, well, there's some things we're not gonna do here. And we need laws in order to govern that. But one of the cool things about the internet is we can bring back freedom of contract. We can bring it back because the internet is designed for it. Now it's easy to think of the internet as a grace of the phone in cable companies and of Google and Facebook and apple and the rest of the large companies that sort of dominate our lives on the internet and deliver many of the things we enjoy every day.
But the phone companies of the world never would've invented the internet because the billing was not built into it because it was so simple. It was almost too simple to design, but it's based on a protocol. And that protocol is simply says that a best effort will be made to move data between any two endpoints. Those endpoints are you and me, those endpoints are any person or any company on the internet. None of us should be any less powerful frankly than the Googles in the Facebooks of the world. It's just that it's easier to build centralized systems if you're a large organization than to build distributed ones, but we are all by nature distributed. We are by design, all different look around at everybody else in a room. We look different for a reason. So we can tell each other apart, this is a conference about identity.
You know, that we have many graces of identity in the physical world here in the world. We understand very well. We have the Dunbar number, which is, we're basically only built to know like a hundred and some people. And we actually are anonymous to the people we don't know in the world. And that is a grace of civilization. How do we deal with that in a world where we are all by design zero distance apart, cuz that's what the internet does by making it so simple for any two endpoints to connect and pass data back and forth. It makes it very, very easy to be in one place at one time, if we want to and to know each other and to know each other almost too well. It's interesting that in the physical world we already, we had, we, the physical world did not come with privacy.
We had to invent privacy technologies. We are all wearing privacy technologies right now. And those privacy technologies are clothing gives social signals to others that there are spaces in our lives that are not open to other people. We don't, we would never plant a tracking beacon on someone we don't know to report back to us so we could give them a better advertising experience or whatever it would be unthinkable. But we'd think about that and do it because we're because Shahana Z off's laws apply in the online world and we have to civilize this place and we civilize it with laws, but we also need to civilize it with technologies and we can civilize it with terms because that's all we have with freedom of contract. We have terms with each other understandings and we can formalize. We can memorialize those in a contract. And in this case with, with freedom of contract, each of us, and this is the important point can be a first party for the entire industrial age.
For the whole time that we've had contracts of adhesion. We are used to being second parties or second class citizens on this internet that is basically built to make everybody on it, a first class citizen, if we wish to be. And we've acquiesced to this because it's easy to do. Every time we get a new login and password, pretty much we've signed something that says except our terms, but because these are contracts of adhesion, even now, all these little contracts that we sign, every time we click agree to something, we're agreeing to a contract of adhesion in which the other party can change at any time that they want. And that essentially makes them meaningless. Because one of the terms that's always in there is we reserve the right to change these anytime that we want. And by the way, the same goes for a privacy policy.
But if we're the first party, we can say, these are our terms. These are my terms. Now every term that we come up with has to be good for the other party as well as for ourselves. And so this is the, the world that we need to design for ourselves as individuals operating in ways where we can control what others do with our data or how other others deal with us in an open marketplace that the internet inherently supports. And we can do this in a way that actually relieves us or leave relieves the companies we deal with from even worrying about the GDPR, because we're already agreeing with us. If we have terms that say, this is how I would like you to use my data. Here are the ions that I have. Here are the connections I already have in the world. Here are the authorization service to, to use Uma's term.
And Uma's part of this. There's so many efforts going on that are parallel with, with this. We can start building the kind of world that we need, that we brought in the GDPR to give us at least partial relief for. So I wanna talk about two terms that we've come up with so far. Now the model for this is creative commons. Most of you're probably familiar with creative commons. Creative commons was also produced at least indirectly by the Berkman center at Harvard, which I have an affiliation with what the, what creative commons did right after Larry Lessig. A law professor lost a case before the us Supreme court called Eldrid versus Ashcroft. And with copyright, he was simply trying to make the case that the framers of the constitution meant it when they said really copyrights should last about 14 years. He lost that case.
The purpose of which is to try and limit the length of copyright in the us. But then what did was he tried to fix in practice what he couldn't fix in law. And he did it with creative comments and all creative comments does is house a set of licenses that specify how creative works can be used. Now, the cool thing about this is that prior to creative commons, in the industrial model, it was almost impossible to imagine an individual human being, having their own copyright license for things. This was something that big industries did, but the, our experience with that is really wonderful. So for example, I'm a photographer and I've produced, I've published something like 70,000 photographs, mostly on flicker, and all of them are licensed with creative commons attribution, 2.0 license, which simply says, give me photo credit, just put my name down underneath that, that, and I only have that because I'd like to know when people use the photographs, I've done nothing more with them.
Over 700 of them are in Wiki media comments. And thousands of them are in articles in Wikipedia. I am pro you're probably looking at the person who has more pictures in Wikipedia than anybody else on earth. And I have done nothing other than license them in a way that encourages their use. We can do a similar thing with terms that we use to relate to the companies of the world that are good for them. And so we created another organization, modeled on creative comments called customer commons. And with customer commons will have, is simply a place to park those terms that when we go online or we use our apps, our code can say my terms are there they're standard terms. Take a look at them. Now in with creative commons, all terms have to all, all licenses have to be machine readable legally. So they're lawyer readable and also readable by ordinary human beings.
And so we're doing the same thing with these terms with customer comments and our, our council on this is the cyber law clinic at Harvard law school, where law students there are working on some terms for us. Now we've just started this. And I wanna tell you about our first two terms. One is in retailing pertains to retailing and the other to publishing the one for retailing is called our intent casting term is a, there are about 22 companies on the project, VM Wiki that are doing one form or another of intent casting. That's where the individuals do the advertising. They say, I'm looking for a stroller for twins. I want in downtown Munich in the next two hours who's coming through. And I'm anonymous while I do that. What are the terms that should accompany that pertaining to the use of data? And we have already have terms for that.
The other one is called no stalking and no stalking is not to be followed on when we, we go to publishing sites on the web now with, with, with publishing publishing is going through a world of hurt right now, commercial publishing online because over well, about 600 million people, but the better part of a billion people are using AdBlockers and ad blockers are just blanket blocking as many ads as possible. When we go from site to site on the net and we're blocking them for very good reasons, this is a very clear message from ordinary consumers to the advertisers and the publishers of the world that we don't like being followed. The, the rise in, in ed blocking exactly tracks along with the rise in tracking with the rise in surveillance. And so the no stalking clause, the no stalking term simply says only show me ads, not based on tracking me by the way, this is all the advertising you ever saw before the internet came along.
And all the advertising was on the net before tracking came along and gonna be much more artfully done than it is now. And it doesn't involve any of the creepiness or malware or fraud that we, we have. It's a good deal for both parties. So I wanted to tell you about those two and to tell you that the main thing is to take a look at customer comments. We're just starting with this. We could use help. We are very interested in having as many members as possible and being supported. So, and, and these first two terms that we're working on and to start thinking as first parties, as individuals, we can be first parties on the net. And so I'm hoping we have enough time for Q and a, and if people have come up with these, thank you.
I'm very glad Dr. She had reserved some time for the Q and a, because we have a number of questions I'd like to go through them. Could you please show the questions? One of those is to start with why is the us so behind Europe in terms of privacy?
Wow. It, you know, it's it that we are not only behind, I mean, behind doesn't cover it. Okay. And, and the best answer is, I don't know, I just know, be caring about this. We spend most of our time in Europe, the, the simplest answer I've gotten is on the European side, which is that there is experience here with having kept detailed records on people and it was used to kill them. And we have no experience like that in the us. And I think, I think that's part of it. I think part of it too is just simply across Europe. There is a better developed sense of privacy than there is in the us. I don't know. We're crazy. That's all I okay. We were in Canada last summer and I decided Canada is the control country and the us is the experiment and it's still going on. So.
Okay. And second question. I remember we are not seeing the questions yet. Will distribute ledger technology be able to support a better protection of individuals?
Oh yes, absolutely. I'm sure of it. There's so many technologies that are coming along right now. And most importantly, the, in the last, just in the last year, there's much more cooperation. And I, I, I mentioned Uma there's, Canera, there's our customer comments, many others. We're all talking to each other now in many constructive ways. I think there's, there's a protocol. I didn't mention called J link, which we use with, which we will use with, with intent casting. That's already, there's already code written for sales, Salesforce to use that. There's no reason why that can't work with other systems. I just see a lot more signs of cooperation going on there and, and blockchain and distributed ledger and all of that I think is absolutely gonna be part of it. Thank you very much again. Thank you. Appreciate it.

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