Tell me who your friends are and I will tell you who you are. This ancient social philosophy is a... more Tell me who your friends are and I will tell you who you are. This ancient social philosophy is at the heart of a new financial technology system – social credit. In recent years, loosely regulated marketplace lenders have increasingly developed methods to rank individuals, including some traditionally considered unscored or credit-less. Specifically, some lenders built their score-generating algorithms around behavioral data gleaned from social media and social networking information, including the quantity and quality of social media presence, the identity and features of the applicant’s contacts, the applicant’s online social ties and interactions, the applicant’s contacts’ financial standing, the applicant’s personality attributes as extracted from her online footprints, and more.
This Article studies the potential consequences of social credit systems predicated on a simple transaction: authorized use of highly personal information in return for better interest rates. Following a detailed description of emerging social credit systems, the Article analyzes the inclination of rational and irrational customers to be socially active online and/or disclose all their online social-related information for financial ranking purposes. This examination includes, inter alia, consumers’ preferences as well as mistakes, gamesmanship, and consumers’ self-doxing or lack thereof. The Article then moves to discuss policy challenges triggered by social-based financial ranking that may become the new creditworthiness baseline criteria. It focuses on (i) direct privacy harms to loan seekers, and derivative privacy harm to loan seekers’ online contacts or followers, (ii) online social segregation potentially mirrored by offline social polarization, and (iii) due process violations derived from algorithmic decision-making and unsupervised machine learning. The Article concludes by making a significant normative contribution, introducing a limited “right to be un-networked,” to accommodate the welcomed aspects of social credit systems while mitigating many of their undesired consequences.
This Article directs scholarly and regulatory attention to an overlooked sub-category within onli... more This Article directs scholarly and regulatory attention to an overlooked sub-category within online and mobile entities that offer financial services – big data and social netbanks. Recently, big data companies like Google, Amazon and Apple, as well as social networks like Facebook and Twitter, have been making forays into the financial services market, capitalizing on their massive troves of user data and social information. Providing the first in-depth study of big data and social netbanks, this Article analyzes these players’ entry into the financial services market and surveys the current regulatory framework for those new bank-like entities.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
This Article directs scholarly and regulatory attention to an overlooked sub-category within onli... more This Article directs scholarly and regulatory attention to an overlooked sub-category within online and mobile entities that offer financial services – big data and social netbanks. Recently, big data companies like Google, Amazon and Apple, as well as social networks like Facebook and Twitter, have been making forays into the financial services market, capitalizing on their massive troves of user data and social information. Providing the first in-depth study of big data and social netbanks, this Article analyzes these players’ entry into the financial services market and surveys the current regulatory framework for those new bank-like entities.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
Copyright literature has been long familiar with the lack of licensing choices in various creativ... more Copyright literature has been long familiar with the lack of licensing choices in various creative markets. In the absence of lawful licensing alternatives, consumers of works as well as secondary creators wishing to use protected elements of preexisting works are often left with no choice but to either infringe on the copyright or refrain from the use. As the dearth of licensing impedes further creation, it greatly conflicts with the utilitarian foundation of copyright and its constitutional goal to promote creative progress. Legal scholarship has submitted various recommendations in response to the licensing failure, but none of them has proved to be effective in alleviating copyright’s licensing shortage. This article contributes to the ongoing discourse by introducing the subtle incentive theory of copyright licensing. The subtle incentive theory encourages rightholders to engage in licensing by considering the lack of licensing alternatives in the market for a particular work as a mitigating factor in the fair use analysis. Specifically, the subtle incentive theory propounds the mirror image of a test that was already mandated in American Geophysical Union v. Texaco in the mid-1990s, but which has since been used exclusively to deny fair use. By so doing, the subtle incentive theory mends a logical error in fair use reasoning and promotes a better creation market by making a zero-cost doctrinal change to ameliorate copyright licensing shortfalls. While the subtle incentive theory avoids aggressive interference in market dynamics and respects rightholders’ proprietorial choices, it does not leave the licensing failure to be repaired exclusively by the market, and adds an important policy statement as to the significance of original and secondary creation alike.
Tell me who your friends are and I will tell you who you are. This ancient social philosophy is a... more Tell me who your friends are and I will tell you who you are. This ancient social philosophy is at the heart of a new financial technology system – social credit. In recent years, loosely regulated marketplace lenders have increasingly developed methods to rank individuals, including some traditionally considered unscored or credit-less. Specifically, some lenders built their score-generating algorithms around behavioral data gleaned from social media and social networking information, including the quantity and quality of social media presence, the identity and features of the applicant’s contacts, the applicant’s online social ties and interactions, the applicant’s contacts’ financial standing, the applicant’s personality attributes as extracted from her online footprints, and more.
This Article studies the potential consequences of social credit systems predicated on a simple transaction: authorized use of highly personal information in return for better interest rates. Following a detailed description of emerging social credit systems, the Article analyzes the inclination of rational and irrational customers to be socially active online and/or disclose all their online social-related information for financial ranking purposes. This examination includes, inter alia, consumers’ preferences as well as mistakes, gamesmanship, and consumers’ self-doxing or lack thereof. The Article then moves to discuss policy challenges triggered by social-based financial ranking that may become the new creditworthiness baseline criteria. It focuses on (i) direct privacy harms to loan seekers, and derivative privacy harm to loan seekers’ online contacts or followers, (ii) online social segregation potentially mirrored by offline social polarization, and (iii) due process violations derived from algorithmic decision-making and unsupervised machine learning. The Article concludes by making a significant normative contribution, introducing a limited “right to be un-networked,” to accommodate the welcomed aspects of social credit systems while mitigating many of their undesired consequences.
This Article directs scholarly and regulatory attention to an overlooked sub-category within onli... more This Article directs scholarly and regulatory attention to an overlooked sub-category within online and mobile entities that offer financial services – big data and social netbanks. Recently, big data companies like Google, Amazon and Apple, as well as social networks like Facebook and Twitter, have been making forays into the financial services market, capitalizing on their massive troves of user data and social information. Providing the first in-depth study of big data and social netbanks, this Article analyzes these players’ entry into the financial services market and surveys the current regulatory framework for those new bank-like entities.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
This Article directs scholarly and regulatory attention to an overlooked sub-category within onli... more This Article directs scholarly and regulatory attention to an overlooked sub-category within online and mobile entities that offer financial services – big data and social netbanks. Recently, big data companies like Google, Amazon and Apple, as well as social networks like Facebook and Twitter, have been making forays into the financial services market, capitalizing on their massive troves of user data and social information. Providing the first in-depth study of big data and social netbanks, this Article analyzes these players’ entry into the financial services market and surveys the current regulatory framework for those new bank-like entities.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
Copyright literature has been long familiar with the lack of licensing choices in various creativ... more Copyright literature has been long familiar with the lack of licensing choices in various creative markets. In the absence of lawful licensing alternatives, consumers of works as well as secondary creators wishing to use protected elements of preexisting works are often left with no choice but to either infringe on the copyright or refrain from the use. As the dearth of licensing impedes further creation, it greatly conflicts with the utilitarian foundation of copyright and its constitutional goal to promote creative progress. Legal scholarship has submitted various recommendations in response to the licensing failure, but none of them has proved to be effective in alleviating copyright’s licensing shortage. This article contributes to the ongoing discourse by introducing the subtle incentive theory of copyright licensing. The subtle incentive theory encourages rightholders to engage in licensing by considering the lack of licensing alternatives in the market for a particular work as a mitigating factor in the fair use analysis. Specifically, the subtle incentive theory propounds the mirror image of a test that was already mandated in American Geophysical Union v. Texaco in the mid-1990s, but which has since been used exclusively to deny fair use. By so doing, the subtle incentive theory mends a logical error in fair use reasoning and promotes a better creation market by making a zero-cost doctrinal change to ameliorate copyright licensing shortfalls. While the subtle incentive theory avoids aggressive interference in market dynamics and respects rightholders’ proprietorial choices, it does not leave the licensing failure to be repaired exclusively by the market, and adds an important policy statement as to the significance of original and secondary creation alike.
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Papers by Yafit Lev-Aretz
This Article studies the potential consequences of social credit systems predicated on a simple transaction: authorized use of highly personal information in return for better interest rates. Following a detailed description of emerging social credit systems, the Article analyzes the inclination of rational and irrational customers to be socially active online and/or disclose all their online social-related information for financial ranking purposes. This examination includes, inter alia, consumers’ preferences as well as mistakes, gamesmanship, and consumers’ self-doxing or lack thereof. The Article then moves to discuss policy challenges triggered by social-based financial ranking that may become the new creditworthiness baseline criteria. It focuses on (i) direct privacy harms to loan seekers, and derivative privacy harm to loan seekers’ online contacts or followers, (ii) online social segregation potentially mirrored by offline social polarization, and (iii) due process violations derived from algorithmic decision-making and unsupervised machine learning. The Article concludes by making a significant normative contribution, introducing a limited “right to be un-networked,” to accommodate the welcomed aspects of social credit systems while mitigating many of their undesired consequences.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
Legal scholarship has submitted various recommendations in response to the licensing failure, but none of them has proved to be effective in alleviating copyright’s licensing shortage. This article contributes to the ongoing discourse by introducing the subtle incentive theory of copyright licensing.
The subtle incentive theory encourages rightholders to engage in licensing by considering the lack of licensing alternatives in the market for a particular work as a mitigating factor in the fair use analysis. Specifically, the subtle incentive theory propounds the mirror image of a test that was already mandated in American Geophysical Union v. Texaco in the mid-1990s, but which has since been used exclusively to deny fair use. By so doing, the subtle incentive theory mends a logical error in fair use reasoning and promotes a better creation market by making a zero-cost doctrinal change to ameliorate copyright licensing shortfalls. While the subtle incentive theory avoids aggressive interference in market dynamics and respects rightholders’ proprietorial choices, it does not leave the licensing failure to be repaired exclusively by the market, and adds an important policy statement as to the significance of original and secondary creation alike.
This Article studies the potential consequences of social credit systems predicated on a simple transaction: authorized use of highly personal information in return for better interest rates. Following a detailed description of emerging social credit systems, the Article analyzes the inclination of rational and irrational customers to be socially active online and/or disclose all their online social-related information for financial ranking purposes. This examination includes, inter alia, consumers’ preferences as well as mistakes, gamesmanship, and consumers’ self-doxing or lack thereof. The Article then moves to discuss policy challenges triggered by social-based financial ranking that may become the new creditworthiness baseline criteria. It focuses on (i) direct privacy harms to loan seekers, and derivative privacy harm to loan seekers’ online contacts or followers, (ii) online social segregation potentially mirrored by offline social polarization, and (iii) due process violations derived from algorithmic decision-making and unsupervised machine learning. The Article concludes by making a significant normative contribution, introducing a limited “right to be un-networked,” to accommodate the welcomed aspects of social credit systems while mitigating many of their undesired consequences.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers’ access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers’ rights.
Legal scholarship has submitted various recommendations in response to the licensing failure, but none of them has proved to be effective in alleviating copyright’s licensing shortage. This article contributes to the ongoing discourse by introducing the subtle incentive theory of copyright licensing.
The subtle incentive theory encourages rightholders to engage in licensing by considering the lack of licensing alternatives in the market for a particular work as a mitigating factor in the fair use analysis. Specifically, the subtle incentive theory propounds the mirror image of a test that was already mandated in American Geophysical Union v. Texaco in the mid-1990s, but which has since been used exclusively to deny fair use. By so doing, the subtle incentive theory mends a logical error in fair use reasoning and promotes a better creation market by making a zero-cost doctrinal change to ameliorate copyright licensing shortfalls. While the subtle incentive theory avoids aggressive interference in market dynamics and respects rightholders’ proprietorial choices, it does not leave the licensing failure to be repaired exclusively by the market, and adds an important policy statement as to the significance of original and secondary creation alike.