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Category: Symposium (The Electronic Silk Road)


Neutrality or Nirvana?

Trade law should not allow countries to insist on a regulatory nirvana in cyberspace unmatched in real space.

Reading Anupam Chander’s The Electronic Silk Road has been a real treat, and thanks to the folks at Concurring Opinions for organizing this terrific online symposium and including me. The book offers a wide-ranging and insightful discussion about global electronic commerce and its regulation and management. Anupam proposes general principles—rules of the road, essentially—to guide policymakers in this process of regulating and managing global e-commerce. The very first principle introduced in the book–the quotation above captures its essence–is that of technological neutrality: To keep cybertrade free and open, the online provision of a service should not be subject to more onerous regulatory burdens than its offline counterpart.

I wish to focus on this first principle. It seems a balanced and uncontroversial prescription. Why should local regulators saddle online service providers with heavier regulatory burdens than the local bricks-and-mortar competitors? The specter of protectionism lurks!

For me, Anupam’s technological neutrality principle is insufficiently ambitious with respect to the possibilities for effective regulation of e-commerce. Anupam’s concerns are free trade concerns, with which I am sympathetic. At the same time, though, e-commerce may actually be able to do better than brick and mortar on a number of important regulatory fronts, but technological neutrality gives up on those possibilities. It relieves the pressure to pursue more efficient regulation in cyberspace.

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With Great Power Comes Great Responsibility

In a sentence, Anupam Chander’s The Electronic Silk Road contains the good, the bad and the ugly of the modern interconnected and globalized world.

How many times do we use terms like “network” and “global”? In Professor Chander’s book you may find not only the meanings, but also the possible legal, economical and ethical implications that these terms may include today.

It’s well known that we are facing a revolution, despite of recent Bill Gates’ words that “The internet is not going to save the world”. I partly agree with Mr. Gates. Probably the internet will not save the world, but for sure it has already changed the world as we know it, making possible the opportunities that are well described in The Electronic Silk Road.

However, I would like to use my spot in this Symposium not to write about the wonders of the Trade 2.0, but to share some concerns that , as a privacy scholar, I have.

The problem is well known and is connected to the risk of the big data companies, that base their business model on consumer-profiling for selling advertisement or additional services to the companies.

“[T]he more the network provider knows about you, the more it can earn” writes Chander, and as noted by V. Mayer-Schönberger and K. Cukier in their recent book Big Data, the risks that could be related with the “dark side” of the big data are not just about the privacy of individuals, but also about the processing of those data, with the “possibility of using big data predictions about people to judge and punish them even before they’ve acted.”.

This is, probably, the good and the bad of big data companies as modern caravans of the electronic silk road: they bring a lot of information, and the information can be used, or better processed, for so many different purposes that we can’t imagine what will happen tomorrow, and not only the risk of a global surveillance is around the corner (on this topic I suggest to read the great post by D. K. Citron and D. Gray Addressing the Harm of Total Surveillance: A Reply to Professor Neil Richards), but also the risk of a dictatorship of data.

This possible circumstance, as Professor Solove write in the book Nothing To Hide “[…] not only frustate the individual by creating a sense of helpness and powerlessness, they also affect social structure by altering the kind of relationships people have with the institutions that make important decisions about their lives.”

Thus, I guess that the privacy and data protection ground could be the real challenge for the electronic silk road.

Professor Chander’s book is full of examples about the misuse of data (see the Paragraph Yahoo! in China), the problem of protection of sensitive data shared across the world (see the Paragraph Boston Brahmins and Bangalore Doctors), the problem about users’ privacy posed by social networks (see Chapter 5 Facebookistan).

But Professor Chander was able also to see the possible benefits of big data analysis (see the Paragraph Predictions and Predilections), for example in healthcare, thus is important to find a way to regulate the unstoppable flowing of data across the world.

In a so complex debate about a right that is subject to different senses and definitions across the world (what is “privacy” or “personal data” is different between USA, Canada, Europe and China for example), I find very interesting the recipe suggested by Anupam Chander.

First of all, we have to embrace some ground principles that are good both for providers and for law and policy makers: 1) do no evil; 2) technology is neutral; 3) the cyberspace need a dematerialized architecture.

Using these principles, it will be easy to follow Professor Chander’s fundamental rule: “harmonization where possible, glocalization where necessary”.

A practical implementation of this rule, as described in Chapter 8, will satisfy the different view of data privacy in a highly liberal regimes and in a highly repressive regime, pushing the glocalization (global services adapt to local rules) against the deregulation in the highly liberal regimes and the “do no evil” principle against the oppression in the highly repressive regime.

This seems reasonable to me, and at the end of my “journey” in Professor Chander’s book, I want to thank him for giving us some fascinating, but above all usable, theories for the forthcoming international cyberlaw.


Global Legal Pluralism

I remember back in 2003, Anupam Chander and I both took part in a cyberlaw retreat on Cape Cod sponsored by Harvard Law School’s Berkman Center for Internet and Society.  Most of the professors assembled at the retreat were concerned with how to “solve” the problems that local regulation of internet activity might pose.  In contrast, Anupam Chander and I repeatedly made the case that this was not a problem to be solved, but an inevitable expression of cultural diversity.  Further, we argued that there might even be some benefits that could accrue from such legal pluralism, properly managed.

We have been fellow travellers ever since, and I am very pleased to see Anupam’s project finally come to fruition in this lively and agile book.  As befits a broadly synthetic work about the electronic silk road, Anupam stiches together an impressive array of examples that convincingly demonstrate the importance of the global trade in services.  In addition, turning from the descriptive to the normative, he lays out principles that might undergird a governance regime for this cross-border activity that leaves open the possibility for multiple competing normative voices.

Anupam’s approach is one that is consonant with the conception of global legal pluralism I have been pursuing for over a decade, and so I have few objections to his account.  Quite rightly, Anupam steers a useful middle ground on issues of so-called extraterritorial regulation.  He neither says that local regulation should always trump all other possible normative authorities (as sovereigntist territorialists often do), nor does he call for a full universal harmonization scheme.  Instead, he adopts a pithy aphorism: “harmonize where possible and glocalize where necessary.”  The key here is that a decisionmaker in a cross-border dispute should always ask whether it is possible to defer to another legal regime in the interests of a harmonious interlocking transnational legal system.  Even asking such a question can, over time, inculcate habits of mind that cause decision-makers to be restrained about reflexively applying their own law in all circumstances.  At the same time, Anupam recognizes that there will be instances when such deference is impossible and local populations will feel the need to impose local norms on cross-border activity.  In such cases, he asks global services companies to “glocalize”: customize their global services product to conform to the law of various localities.

My guess is that such an approach will be workable in many cases, and so Anupam’s argument is an advance.  It is also usefully pluralist in that it leaves space for multiple communities—local international, and transnational—to assert normative authority.  This is in marked contrast to an approach that seeks to elide normative difference and tries to impose a single authoritative set of norms.  Thus, I fully embrace his project.

I do have two quibbles, however.

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The Life of Pi in the Electronic Silk Road

The Life of Pi presents an epic journey that a boy survives by maximizing spiritual strength in the most adverse circumstances. Called Pi, the boy harnesses curiosity, spirituality, and love to go through his adventurous “international” journeys through religions, cultures, and most notably nature with a stormy ocean.

In his new book The Electronic Silk Road: How the Web Binds the World in Commerce, Anupam Chander also narrates an epic journey that we must embark on in the digital age. Skillfully written with elegant prose, the book explores complex challenges posed by culture, politics, and technology associated with trade in information services.

As a boundless venue hosting trade in services, cyberspace turns out to be the ocean that Pi crossed. According to Anupam, it has enormous barriers blocking the freedom of trading information services in the global context. Culture matters. While some information services are totally fine in western societies, they may be seen as hostile to Islamic beliefs. Politics matters. It has resulted in information suppression in certain authoritarian countries. Technology matters. It facilitates the growth of information services. But it has been used to block trade in information services.

The great firewalls that exist in the electronic silk road best illustrate the difficulty of promoting trade in information services. As mighty as the storm and waves that Pi suffered on the ocean, they are utilized by repressive regimes to monitor, filter, and even shut down the Internet. In 2010 Google withdrew its operations from mainland China. This incident, as I understand from reading Anupam’s book, is a shipwreck as serious as the one that Pi remembers as the darkest day of his life. But it is also a shipwreck similar to the one that Pi regards as a new journey into knowing himself, other beings with him, and the world or nature at large.

On the one hand, Google’s retreat sounded the loudest alarm to the protection of freedom of information in repressive regimes. Nearly 1.3 billion Chinese citizens as well as many other fellow human beings are subject to cyberspace information suppression by authoritarian regimes. As Anupam bluntly reminds us, “[w]hen allied with willing Internet service providers, websites, software providers, and financial intermediaries, a government can gain an omniscience heretofore unknown.” In the digital age, it is the cross-border information services that supply state-of-the-art technologies and abundant financial resources to the authoritarian regimes.

On the other hand, the Google incident calls for immediate and long-term interventions in order to reshape cyberspace as a sphere free of uncivilized surveillance. This journey to information freedom is, indeed, as arduous as the one that Pi experienced across the ocean and continents. Religion, language, imagination, dignity, and even capacity for love all play an important part contributing to Pi’s triumph. The same applies to the journey toward information freedom. After all, people subject to information suppression live with (or without) different religions and speak different languages. Therefore, the capacity for a concerted effort to empower human dignity and love to address information suppression varies significantly across the world. Toward the end of book, Anupam hints that the World Trade Organization, an international institution that governs global trade both in goods and services, might be of little help to resolve this issue. Without any competent international organizations charting the map, the journey to the heaven of information freedom is destined to be a long and tricky adventure.

Reading The Electronic Silk Road together with The Life of Pi prompted me to think about issues that go beyond information suppression existing in repressive regimes. I realized that there are two major issues looming large in the digital age. While we enjoy the unprecedented freedom, convenience, and entertainment that digital technology can bring to us, we must ponder the dark side of digital technology and how the law should tackle it.

First and foremost, we can identify and understand the ways in which the ubiquity of information services can spawn profound problems. The Life of Pi conveys problems of this kind: hostility toward another religion and culture; indifference to other human beings deemed as inferior; and unwillingness to reciprocate others’ good deeds (Richard Parker, the tiger who has a human name, runs into the nearby jungle without a glance back). All these problems remain for Pi, although he has miraculously made it to shore. Online information services have caused similar problems. For example, the websites hosting information services are rife with fraud. Shortly after I posted an advertisement on Craigslist for subleasing my apartment last fall, I received several emails through which the senders attempted to persuade me to deposit money into their bank accounts before they took over the lease. After doing a bit research about online fraud, I could not help asking myself why there are so many people who choose fraud as their jobs.

Thus, digital technology is a double-edged sword. It promotes free flow of information and provides the social glue to bind many people together to wage revolutions against repressive regimes (e.g., the Jasmine Revolution). However, it also wields the power to alienate many people from the social network of direct interactions, leaving them increasingly alone in their spaces of egoism. Today, the majority of people on the subway spend much of their time using their smartphones or tablets. They appear in the tangible public spaces, but they confine themselves to those machines connected with the Internet, enjoying the private fun of checking Facebook or Twitter, playing electronic games, reading news, shopping online, or watching YouTube videos. Digital technology has facilitated widespread use of emails and text messages, further reducing the occasions for face-to-face conversations, greetings, or smiles. Thus, these trends raise the question whether digital technology promotes engagement with others or reinforces the individual quest for solitude. A new book by Sherry Turkle, Alone Together: Why We Expect More from Technology and Less from Each Other, has a comprehensive and nuanced discussion about this tangled issue.

How should the law tackle the double-edged nature of digital technology? Law is critically important in this regard, because it informs people of what they can and cannot do. Anupam teaches us that core to the law regulating trade mediated via cyberspace is the protection of “the right of individuals to share and receive information.” This core right prioritizes the “delivery and consumption” of information “regardless of frontiers” (p.202). His novel proposal that combines globalization together with harmonization of laws serves the full realization of this right.

But can celebration of the individual right to share and receive information offer means by which we can deal with the alienating effect of digital technology? In other words, does the language of rights really increase the consciousness of sharing information as it purports to? To some extent, it does. Anupam proves this with many vivid examples, particularly the Jasmine Revolution in which sharing information about freedom and democracy was the focal point. But as I discussed earlier and others’ works have proven, digital technology has also driven an increasing number of people to withdraw from traditional means of communication and confine themselves to an egoistic world of isolation.

I believe the language of responsibility can play a big part in dealing with this problem. In my recent article entitled Copyright and Responsibility, I point out that law “regulates human affairs through rules that require people to enjoy their freedoms and exercise their rights in responsible ways.” Responsibilities always come together with rights. Without the infusion with responsibilities, rights are meaningless. Persons are not only individuals but also social members of communities, countries, and the whole world. As social members, persons must not single-mindedly pursue only the realization of their individual rights. Rather, they should also constantly ask what responsibilities they should take on and how they can fulfill them in their social membership.

Anupam does mention the importance of responsibility. For example, he urges that Internet service providers follow the “Do No Evil” responsibility, which requires them not to collaborate with repressive regimes that suppress the free flow of information. Indeed, this responsibility is crucial. But should we also ask Internet service providers to take on more responsibilities to encourage people to spend slightly less time using computers, smartphones, or tablets and slightly more time interacting with others in various ways? In this sense, Internet service providers may have a responsibility to cultivate a healthy environment and culture for human interactions. A follow-up question is whether individuals should have the responsibility to spend slightly more time paying attention to others and their communities via computers, smartphones, or tablets.

Both The Life of Pi and The Electronic Silk Road prompt me to think more about the problems in the human world. The Life of Pi teaches me how a person can grow and mature through overcoming tough challenges and even evils. Anupam’s The Electronic Silk Road teaches me how globalized human societies can continue to flourish through overcoming the obstacles caused by national boundaries and the self-centered energy embedded in each human being. Both The Life of Pi and The Electronic Silk Road celebrate the beauty of human spirituality and its power to deter selfishness and even evil.

Tax Havens on the Electronic Silk Road

UKTaxHavensElephantInRoomAnupam Chander could not have picked a better topic in modern political economy than the digitization of flows of commerce. The Electronic Silk Road is packed with fascinating narratives about the legal conflicts that digitization generates.

As more value becomes digitally mobile, we may be on the cusp of unprecedented regulatory arbitrage (predicated on dubiously relevant doctrines, free trade commitments, and contracts.) To his great credit, Chander offers a fair assessment of digital commerce, balancing enthusiasm for its inclusive effects with caution about the need to curb the worst abuses of multinational corporations. My question is: will there be funding available to governments who take such a regulatory agenda seriously? For example, if Amazon’s Mechanical Turk decomposes digital labor among workers on different continents, how are we to fund the (sure to be sizeable) regulatory apparatus needed to assure that basic labor, safety, and other legal obligations are honored?

Consider, for instance, the aggressive tax planning of Apple. The company uses transfer pricing and Irish subsidiaries to manipulate its tax obligations. Apple’s IP (ranging from the Apple trademark, to the copyright-protected software, to patents on the phone’s innards, to design patents that give Apple an exclusive right to use the particular “look and feel” of its phones) may, in turn, be “owned” by an Apple subsidiary in, say, Bermuda, or the Cayman Islands. When people try to criticize Apple’s suppliers’ sharp labor practices, their work is often banned from the company’s app store. Apple ensures its own iGovernance mechanisms are unitary, swift in judgment, and a near-absolute authority on many aspects of the smartphone experience of tens of millions of netizens, while taking advantage of weak and fragmented jurisdictions for tax planning purposes.
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Navigating The Electronic Silk Road: How the Web Binds the World Together in Commerce

In The Electronic Silk Road: How the Web Binds the World Together in Commerce, Anupam Chander has helped to illuminate any number of debates that surround the growing trade in online information services (a phenomenon that he calls “net-work”).  The range of legal and political issues implicated by trade in online information services is vast and some are quite arcane.  Yet, Chander brings them together beautifully in a wonderfully accessible book that is very readable without being simplistic.  He does not purport to offer a single solution to the challenges of trade in online information services.  (Indeed, I would be suspicious of anyone hawking a single solution to what is an incredibly complex problem.)  Instead, he suggests a framework for recalibrating the balance between local and international norms (and institutions) in ways that take account of the special features of online commerce (and online social interactions, for Chander is continually alert to the ways that trade and commerce can positively contribute to broader social policy objectives).  Chander recognises that to understand the complexity of regulating (or de-regulating) the provision of online services, one has to take account of any number of institutions or devices: thus he dissects rules on conflicts of law (jurisdiction, choice of law, and recognition and enforcement of judgments), and international economic law (most notably GATS), while also taking due account of private ordering by large online players and the global power of consumer pressure.  He paints a messy picture, but it is messy because it is rich.  One has first to accept that messiness and complexity, in order to address the problems of activity that (arguably) simultaneously occurs nowhere and everywhere.

Perhaps the biggest single contribution that Chander makes is to suggest that these disparate legal devices can be considered through a single analytical framework, which he develops using a number of core propositions and concepts.  The most important of these, which I discuss below, is the concept of “glocalisation” (not new, but adopted and adapted by Chander) and harmonisation (also not new, of course).  The framework does not suggest any concrete solutions (with a couple of exceptions).  But that would be too much to expect.  Nor will it resolve some of the most acute tensions between international norms and local (national) sovereignty.  But that would be too much to ask.  It does ask us to think differently about how to address those tensions.

It is the interaction of glocalisation and harmonisation that is at the heart of the book, and on which I will focus my post.  The core proposition that Chander advances is “Harmonise where possible, and glocalize where necessary.”  (p 191).  By this proposition, I read (based on his uses throughout the book rather than how I would use the terms, as discussed below) to mean that we should strive for global norms so as to take advantage of the efficiencies (and other social benefits) of universalization, but allow local (mostly national) norms to apply where important to preserve important values on which local communities may disagree (provided such values are broadly consistent with fundamental international norms, such as human rights commitments).  In some respects, this is not a radical proposition.  Most of international law consists of calibrating the balance between the national sovereignty and international norms.

However, in two senses Chander’s proposal is quite radical.First, he recognises this tension pervades any number of legal rules and institutions, not just public international law.  Thus, he seeks to apply his basic tenet to conflicts rules, as well as rules that facilitate global transactions.  This is radical insofar as it is not the starting point for conventional private law analysis generally.  Chander is not alone. 

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Chander’s Balanced Examination of Free Trade, State Sovereignty, and the Internet

I very much enjoyed Anupam Chander’s excellent new book, The Electronic Silk Road: How the Web Binds the World Together in Commerce, and can highly recommend it, especially to anyone who is interested in the intersection of cyberlaw and global free trade issues. What follows are some thoughts on the book that I have condensed from a slightly longer review of the book that originally appeared on The Technology Liberation Front blog in late August.

At the heart of Chander’s book lies an old tension that has long haunted trade policy: How do you achieve the benefits of free trade through greater liberalization without completely undermining the sovereign authority of nation-states to continue enforcing their preferred socio-political legal and cultural norms? Chander correctly notes, “States will be loathe to abandon their law in the face of the offerings mediated by the Internet.” “If crossborder flows of information grossly undermine our privacy, security, or the standards of locally delivered services, they will not long be tolerated,” he notes. These are just a few of the reasons that barriers to trade remain and why, as Chander explains, “the flat world of global business and the self-regulating world of cyberspace remain distant ideals.”

Nonetheless, he hopes that we can find a way to achieve a sensible balance between the greater liberalization of markets as well as the preservation of a residual role for states in shaping online commerce and activities. And he hopes to do so through the application of three key principles. Read More


Will We Be Ever Able To Go Off-grid Again? And Other Questions about the Electronic Silk Road

Will we ever be able to go off-grid again? What do we gain and lose if not? These questions came to mind as I was reading Anupam Chander’s Electronic Silk Road. The book is excellent. Indeed, these questions and the rest of this post’s ideas would not have come to mind had he not set out how the Electronic Silk Road operates and might operate. And my questions are perhaps prompted by a good book that addresses much and better still opens the doors to the next questions. Chander makes a strong case for benefits of a modern silk road where trust and trade work together and promote “net-work” which he defines as “information services delivered remotely through electronic communications systems.” This two way world facilitates labor shifted to Asia but also Google and Facebook spanning the globe with their services. His plea for new laws to address this change in trade makes sense. Our world of goods is fading to a world of digital things. Yet I wonder whether this new rule of trade maps to all the wonders we may want.

There may be unintentional irony here. Chapter One epigraph quotes Keynes “What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!” Does trade stop war or at least make countries less likely to war against each other? Maybe. To get there Chander points out that, “the characteristics that permit net-work trade might be deployed to create a robust infrastructure for such trade: real-time information transfer, low information and other transactions costs, the ability of individuals around the world to collaborate, and electronic identification.” But the same systems that may promote trade can lead to greater surveillance and repression.

In other words, the recent spying amongst countries may be a good thing. I fear greater coordination amongst countries rather than friction. Chander calls this issue “Stalinization—the imposition of the world’s most repressive rules on cyberspace, in aggregated form.” He acknowledges this point at p. 197. Nonetheless this greater connection and improved grid may be inescapable. The idea that local laws must balance global over-reach does not appear to address what happens when the big boys agree. The electronic silk road thus seems to kill the romance of the silk road.

The Silk Road evokes adventure, the ability to test, change identities, and yet somehow trade worked. Failure on the Silk Road or even mistakes or cheating could be hidden by moving from the Road to some other country. In that sense, a modern system of trade on a global scale seems to defeat the room for play that Julie Cohen has described in Configuring the Networked Self. To where would one go to experiment, reinvent, and rehabilitate? Even with greater freedom to communicate things can go awry. A WTO response may be futile if all agree on bad behavior. Public shaming of corporations may mean little when they are forced to comply. To be clear, I agree with much of what Chander offers and have hope that the mitigation he offers will take it root. At bottom it may be a faith that discourse and debate defeats evil in all forms. Part of me thinks this idea is true. Part wonders whether we have come that far from the days leading up to World War I or II. If not, tighter understanding and trade may do less than both Chander and I hope. Then again Chander may be setting us up for the next step in his ideas. I certainly hope so.


Opportunities and Roadblocks Along the Electronic Silk Road

977574_288606077943048_524618202_oLast week, Foreign Affairs posted a note about my book, The Electronic Silk Road, on its Facebook page. In the comments, some clever wag asked, “Didn’t the FBI shut this down a few weeks ago?” In other venues as well, as I have shared portions of my book across the web, individuals across the world have written back, sometimes applauding and at other times challenging my claims. My writing itself has journed across the world–when I adapted part of a chapter as “How Censorship Hurts Chinese Internet Companies” for The Atlantic, the China Daily republished it. The Financial Times published its review of the book in both English and Chinese.

International trade was involved in even these posts. Much of this activity involved websites—from Facebook, to The Atlantic, and the Financial Times, each of them earning revenue in part from cross-border advertising (even the government-owned China Daily is apparently under pressure to increase advertising) . In the second quarter of 2013, for example, Facebook earned the majority of its revenues outside the United States–$995 million out of a total of $1,813 million, or 55 percent of revenues.

But this trade also brought communication—with ideas and critiques circulated around the world.  The old silk roads similarly were passages not only for goods, but knowledge. They helped shape our world, not only materially, but spiritually, just as the mix of commerce and communication on the Electronic Silk Road will reshape the world to come.

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Introducing the Electronic Silk Road Online Symposium

Silk Road coverThis week, a great group will be blogging about Professor Anupam Chander’s book, The Electronic Silk Road: How the Web Binds the World Together in Commerce. Professor Chander is a leading scholar on globalization and digitization. He is Director of the California International Law Center and Martin Luther King, Jr. Hall Research Scholar at UC Davis. He has been a visiting professor at Yale Law School, the University of Chicago Law School, Stanford Law School, and Cornell Law School. He is also a dear friend. Nonetheless, it is time for us to do what we hope to do well, and if lucky, our friends do for us. That is, it is time to press Professor Chander about his work as it tries to show us how the new Silk Road operates, what it promises, what is yields, and what it threatens. Work and services are now blending, if not blended. Old rules for trade struggle to adapt to new rules for information. Where will we go from here? Join Professor Chander and our panelists including Paul Berman, Miriam Cherry, Graeme Dinwoodie, Nicklas Lundblad, Frank Pasquale, Pierluigi Perri, Adam Thierer, Haochen Sun, Fred Tung, and of course Danielle Citron and me for the fun this week.