Permissionless innovation = endless litigation

The book Permissionless Innovation by Adam Thierer is an intro to “cyberlibertarianism” according to Netopia’s review by Waldemar Ingdahl. The book aside, permissionless innovation is a concept often brought up in digital policy. The idea is that no one should have to ask permission before innovating, which may sound perfectly normal until you take a closer look. Perhaps an innovation infringes on a patent (and is it really an innovation if someone else was first?), so real permissionless innovation cannot co-exist with patents. Or look at the “sharing economy”, where transport service Uber and accommodation network Airbnb offer services similar to closely regulated markets. Normal taxi companies operate under city licenses, have registered cars and drivers, must operate on a meter, even in some cities (like New York) the mayor’s office decides the fares. Uber has none of the above, and predictably has found itself in controversy in many jurisdictions: it offers the same service, but does not play by the same rules. Airbnb has no interest in labour union contracts like the ones its competitors in the traditional hotels must follow. Many cities have per night special taxes on hotel accommodation, Airbnb and other similar services bypass this regulation. So is permissionless innovation anything but newspeak for a loophole in regulation?

Many internet companies will state that they “follow court orders”, but real life is more complicated. Plenty of soft law rules apply outside the courts: self-regulation systems run by industry, local rules, government agencies instructions and more. Following court orders is not enough to make a company a lawful corporate citizen. This may be a difference in flavour between Europe and the US, the latter legal system of course much more focused on law suits, litigation and damages. To a European, it is an odd system, but very much in line with the idea of “permissionless innovation”. Shoot first, then ask. But can anyone argue that the American litigation system is innovation friendly? A more common critique is that it pits the small against the big and the one with the most lawyers wins. Instead of asking permission, a company must pay damages if it loses in court. That is hardly a recipe for the digital revolution.