Mai Chen: Regulators struggle with new technologies

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Cryptocurrencies such as Bitcoin enable more or less anonymous currency transfers. You can buy goods, services, and even donate to overseas democracy activists with Bitcoin.
Cryptocurrencies such as Bitcoin enable more or less anonymous currency transfers. You can buy goods, services, and even donate to overseas democracy activists with Bitcoin.

From 3D printing to Bitcoin via Uber, DIY drones, blogging and social media, it seems every week brings a new challenge for regulators to grapple with.

This week, Justice Raynor Asher considered in the High Court whether Cameron Slater's blog Whale Oil should be treated as an independent media organisation, and thus prima facie entitled not to disclose its sources. Even greater challenges face regulators in keeping up to date with digital innovation.

Innovation is essential to grow our export sector and to compete in the global market. But regulation needs to be equally innovative. For example, cryptocurrencies such as Bitcoin enable more or less anonymous currency transfers. This has plenty of legitimate applications - you can buy goods, services, and even donate to overseas democracy activists with Bitcoin.

But a global network of anonymous transactions poses immense challenges to law enforcement and financial market regulators. For example, how do you enforce the Criminal Proceeds (Recovery) Act 2009, the Financial Markets Conduct Act 2013, the Income Tax Act 2007 or even the Crimes Act 1961 (to name but a few) without being able to keep track of currency movements?

The taxi industry is another facing disruption because of technological change. The app Uber enables people to book a ride from motorists who are not taxi drivers. It has launched in Auckland and has been popular overseas (except with taxi drivers). Uber avoids having to deal with the regulations applying to taxis, such as the requirement for security cameras, because its drivers work as a "private hire service" and not as taxis - perhaps not quite what was envisioned when the rules for such operators in the Land Transport Rule: Operator Licensing, were last amended in 2009.

Even Parliament's own procedures are being challenged by the prevalence of smartphones and microblogging technology. Parliament has long-standing rules seeking to restrain MPs from abusing each other and/or the Speaker during parliamentary debates and question time. But some MPs now, instead of making unparliamentary remarks to each other, or to the Speaker, simply tweet such remarks from their seat in Parliament using their cellphone, often to a much larger audience. The Speaker has referred the issue to Parliament's privileges committee, who are trying to decide what, if anything, should be done about this.

Another technology regulators will need to consider is 3D printing. Our Arms Act is premised on the basis that you require a licence to make, own, sell and possess firearms. But the first crude home 3D printed guns are already appearing and the designs to do so are widely available online. How can you regulate firearms, if a few years from now anybody can download the plans and print themselves an assault rifle?

Regulators also need to think about how people's privacy can be meaningfully protected when they willingly hand over vast quantities of personal information to Facebook, Twitter, Instagram and others and then place that information online.

We live in an amazing new world of change, but can we ensure that new digital technologies can deliver dividends in terms of public welfare and innovation while protecting us against its darker uses? The challenge is devising flexible, light-handed regulation of new digital technologies that deliver public welfare as well as innovation.

Mai Chen is a partner in Chen Palmer Public and Employment Law Specialists, and adjunct professor at the University of Auckland Business School.

- NZ Herald

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