Digital Governance—Liability and Responsibility

Abstract

Civil liability is an important governance mechanism of decentralized societies. Contrary to regulatory law which is imposed on potentially dangerous activities ex ante, liability rules intervene ex post, after damage has already occurred or a hazardous situation has materialized. Ex post mechanisms avoid welfare-reducing overregulation of potentially dangerous activities that turn out to be rather harmless, i.e. that do not cause substantial losses. Nevertheless, liability rules generate incentives for actors to take precautions against harm ex ante. These benefits of liability rules in terms of incentives towards optimal safety may be obtained only if liability is imposed on the actor within a group who is in the best position to avoid the harm in question. Digitalization poses new challenges for liability rules as traditional actors, such as newspapers, are pushed into the background, while new players, such as platforms, take center stage. The following article explores how liability rules react to this shift of control from one group of actors to another, with a focus on autonomous systems and digital platforms.