Information technology is famous for changing faster than climate predictions. Once in a while new technology upsets the status quo, and impacts society quite a lot before being assimilated and 'normal'. Lawmaking is by nature a reflective craft, it must address societal changes after the fact. Its challenge is to be balanced in its approach to regulation: neither too slow to be effective nor too fast and restrictive, which would stifle innovation. This balance is seldom achieved, and often a new status quo is achieved trough litigation.
It presents an interesting conundrum to the early adopter: implement the bleeding edge and risk unknown future legal or compliance costs, or wait and watch the taillights of your competitors? Behavioral advertising such as Phorm quickly drew the public, and then the EC's ire, and had to tone it down a notch. Virtualisation technology is infamous for the complicated licencing issues it engendered. Social networks may be on the business end of a recast of Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data.1 In short: it's a minefield out there.
For consumers, the emergence of the internet as a Valhalla of digital content distribution has completely changed several industries and led me to wonder what happened to people's idea of property.2 Napster came, saw, conquered, and was sued to pieces in a span of only two years. Apple stock went from 44 dollars at the last split in '05 to well over 300 nowadays, riding the wave of legal music downloading, always staying far behind the early file sharers, right behind the lawyers and regulators, and just in front of mainstream consumers, who perceive the company's products and services as the toast of consumer technology.
All IT companies still try to be Microsoft: to have the vision and entrepreneurship to establish an industry and reign supreme for a decade or two as Redmond did with the personal computer. However, consumers and lawmakers dislike monopolies, as much as they tend to create them by liking and adopting standard approaches to computing. It's a risky business, because you need a lot of investment to compete, and the dynamics of the industry, if not completely winner-take-all, are unfriendly to anyone not in the top three of their segment. Knowing what to expect in terms of regulation would be like a visitation from on high to the companies jockeying for position.
It's not all threat and doom what comes from lawmakers' efforts. The current European Commissioner for Digital Agenda, Neelie Kroes, is well known for her incisive decisions and has tangled with IT companies before during her time as Commissioner for Competition. These days she could be giving some of them a big break by harmonizing copyright legislation across member states.3
CDN operators such as Akamai and Internap will be watching with bated breath to know whether the floodgates of distributable content will open. A pan-European Netflix has yet to emerge, and Apple, Microsoft and Sony have compatible devices ready to bring it all to your living room.
Before that the Copyright Directive was a famous example of tech lobby winning big, although it was understandably unpopular with consumers. Now net neutrality is hanging in the balance as the FCC, the courts, and various companies and groups duke it out to determine what we will have the pleasure of paying for online. The outcome has the potential to be yet another game-changer, and might provide huge opportunities for service providers while punishing content providers and customers.
The takeaway here is that the legal implications of new technology cannot be foreseen, and can make or break companies, especially in the fast-paced IT industry where waiting it out is never an option. Lobbying lawmakers is only going to become more important as the stakes get higher, and centralized authorities in the US, Europe and Asia decide on the merits of new tech for vast numbers of companies and consumers.
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