Digital infrastructure and law

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Digital infrastructure and law

A.A. Drueva*

Abstract

digital economy infrastructure legal

The article considers challenges due the development of digital technologies and evolution of the digital economy. The author analyses approaches to the definition of the term «digital economy» and makes conclusions on the correlation of the concepts of “digital infrastructure” and “information infrastructure”. Analysis is provided of challenges of legal regulation with regards to digital infrastructure and prospects explored for regulatory regulation of the digital economy.

Keywords: digital economy, digital infrastructure, information infrastructure, digital technology, digital platform.

The modern world is getting more and more technological. Economic relationships are steadily becoming more complex due to the virtualization and automatization of economic processes. These tendencies predetermine digital economics formation.

Establishment of the conditions suitable for the implementation of promising technologies (internet features, artificial intelligence, virtual and augmented reality, identification systems, distributed databases etc.) and the creation of new economic models based on the above-mentioned conditions are a key factor of digital economics development. In a state of industry and economics digitalization and digitalization of social relations in general, infrastructure, which provides synergistic interaction of various technical solutions, compatibility, processing and exchange of date, is crucial.

Using digital technologies leads to changes in people's day-to-day life, industrial relationships, economics structure and to the arising of new requirements for communications, computing powers, information systems and services.

As is well known, the President of Russia Vladimir Putin in his message to the Federal Assembly on the 1^st of December 2016 pointed out the necessity of national digital economics formation oriented on the efficiency increase of all the industries and areas of life by using information technologies. On the 27^th of July 2017 the program «Digital economics of the Russian Federation»¹ (the Program) was adopted. It sets forth the objectives of digital economics development, aiming to transmit to a whole new level of information and communication technologies utilization in all the spheres of social and economic activity.

It is remarkable that the Program does not provide the definition of «digital economics». V. A. Vajpan points out that digital economics is a system of economic relations, where the data, presented in digital form, is a key factor of production in every industry.

N. K. Norets and A. A. Stankevitch offer a somewhat different definition of digital economics defying it as «a system of economic and political, social and cultural relations based on the utilization of digital (computer) information and communication technologies» The Decree of the Russian federal Government of 28.07.2017 № 1632-р«On the adoption of the Program “Digital economics in the Russian Federation”» // Sobraniezakonodatel'stvaRossijskojFederaci. 2017. № 32. Art. 5138. Norets N. K., Stankevich A. A.Cifrovayaehkonomikasostoyanieiperspektivyrazvitiya [Digital economics: condition and perspectives of development] // Innovacionnyeklastery v cifrovojehkonomike: teoriyaipraktika :trudynauchno-prak- ticheskojkonferencii s mezhdunarodnymuchastiem (Innovation clusters in digital economics: theory and practice: the

works of a scientific and applied conference with international participation). 17--22 of May 2017. SPb., 2017. P 173-- 179..

Pursuant to an alternative approach, digital economics is a type of economics, distinguished by the active implementation and practical utilization of digital technologies of gathering, storage, procession, transformation and transmission of information in all the fields of human activity, and a system of social and economic, organizational and technical relations, based on digital information and telecommunication technologies utilization Babkin A. V., Burkalceva D. D., Kosten D. G., Vorobeva Yu. N.Formirovaniecifrovojehkonomiki v Rossiisushchnost, osobennosti, tekhnicheskayanormalizaciya, problemyrazvitiya [The formation of the digital economy in Russia: es-sence, features, technical normalization, development problems] // NauchnotekhnicheskievedomostiSPbGPU. Eh- konomicheskienauki. 2017. V. 10. № 3.Р12..

The analysis of existing approaches to the definition of the term «digital economics» allows to assert that the constant utilization of digital technologies in economic relations is a fundamental feature of digital economics. Efficient activity and functioning of markets and industries in the framework of digital economics is only possible provided there are developed platforms, technologies and infrastructure. The increased attention to infrastructure, in its turn, is caused by the arising of completely new objectives, connected to higher levels of effectiveness, production rate and performed work quality.

Among primary goals of the formation of a new digital economics regular environment the aim of digital infrastructure creation should be accomplished. Just like 2 centuries ago the economic development of a region used to depend of routes for cartages, and a century ago -- on railways, now digital, information and technological communications play a large part in economics development. However, in digital area railways and highways give way to information distribution channels. In addition, the way from the idea to creation of not just individual products but of whole world-changing industries has never been as short as it is now.

Infrastructure in its general meaning is a complex of interconnected service structures or objects composing or securing the basis of the system functioning.

Infrastructure (lat. infra -- under, structura -- structure) -- is a set of areas, industries and organizations, conducting busuness in these areas, types of their activities, which are to create and to secure conditions for normal functioning of industries, goods circulation and people's livelihoods RizbergB. A., Losovsky L. S. Starodubtseva E. B.Sovremennyjehkonomicheskijslovar [A contemporary economic vocabulary]. 6^th publ. М. : Infra-M., 2011..

In accordance with another interpretation of the term «infrastructure», it is a body of subjects of activity, which contribute to its performance, including provision of services connected to production and distribution of goods Osnovnyenapravleniyapolitikirossijskojfederacii v oblastirazvitiyainnovacionnojsistemyna period do 2010 goda [Primary political directions of Russia in the area of innovation system development till 2010] (adopted by the federal Government of the Russian Federation 05.08.2005 № 2473p-n7).. Above-mentioned definitions, in our opinion, do not reflect the whole meaning of the term «digital infrastructure». We suppose that the reduction of the term «infrastructure» to a set of subjects is not fully correct, considering the formation of a new digital economics environment. Nowadays, infrastructure is also a complex of objects such as: digital technologies, connection channels to a specific equipment, storage and date-processing systems and a great number of other items, providing automatization of economic processes.

V. A. Vajpan correctly points out that «in digital economics economic activity is carried out with the help of electronic and digital technologies» Vajpan V. A.Pravovoeregulirovaniecifrovojehkonomiki [Legal regulation of digital economics] // Predprinimatelskoepravo. Prilozhenie«Pravo ibiznes». 2018. № 1. P 12--17.. Thus, digital infrastructure turns out to be a complicated, multilateral term and covers not only a set of subjects but also platforms, technologies and environment, which creates conditions for their functioning and development. To our mind, «digital infrastructure» can be defined as a complex of interconnected structures serving and guaranteeing the formation and realization of digital economics and aimed at security and realization of a new quality of digital economics subjects' electronic interaction based on the creation of a safe high-tech universal digital environment.

Pursuant to the Program, digital economics consists of 3 following levels:

-- markets and fields of economics (areas of activity), where the interaction of individual subjects (suppliers and consumers of goods, works and services) takes place;

— platforms and technologies, where the competences for markets and fields economics (areas of activity) development are formed;

— the environment, which creates the conditions for platforms and technologies development and efficient market subjects and fields of economics (areas of activity) interaction. It also covers legal regulation, informational infrastructure, human resources and information security.

According to the Program, efficient development of markets and fields of economics (areas of activity) in a framework of digital economics is only possible in case there are developed platforms, technologies, institutional and infrastructural environments. Therefore, the Program focuses on 2 lower levels of digital economics -- basic directions, and determines development objectives which are: Key institutes within which conditions for digitals economics development are created;

Primary infrastructural elements of digital economics (informational infrastructure, information security);

Digital economics potential can be achieved provided digital infrastructure is timely formed and developed.

Moreover, legislator's using the term «informational infrastructure» as a basic element while referring to principal infrastructure elements of digital economics stands out. In addition, it is quite a common practice to substitute definitions in cases when «informational infrastructure» and «digital infrastructure» are given the save meaning. Information is undoubtedly a crucial source in a contemporary economics. Nowadays, the efficiency of any field of economics depends on the access to the information and its effective utilization. However, we should distinguish between digital and informational infrastructures. The distinguishing is complicated by the absence of definition apparatus. Pursuant to the President's Decree of the 9^th of May 2017 № 203 «On an informational society development strategy in the Russian Federation for 2017--2030», the objective of information and communication infrastructure development in Russia (informational infrastructure in Russia) is to provide free access to information for individuals, organizations, state and municipal authorities at every level of its formation and spreading Sobraniezakonodatel'stvaRossijskojFederaci. 2017. № 20. Art. 2901.. A somewhat different definition of informational infrastructure is presented in an article by U. I. Gorbunova and O. N. Gorbunov. The article defines it as system of organizational structures, sub-systems, providing functioning and development of information space and means of informational interaction GorbunovaY. I., Gorbunova O. N.Informacionnayainfrastruktura: sovremennayasushchnostpodotraslisostavlyayush- chie [Informational infrastructure: contemporary nature, sub-branches and components] // Socialno-ehkonomicheskieyavleniyaiprocessy [Social and economic phenomenons and processes]. 2014. № 2. URL: https://cyberleninka.ru/ article/n/informatsionnaya-infrastruktura-sovremennaya-suschnost-podotrasli-ee-sostavlyayuschie.. It is possible to conclude that informational infrastructure is a set of informational systems, programs, instruments and networks which provide interaction and information exchange of individuals, legal entities, state and municipal authorities.

Informational infrastructure is undoubtedly an essential part of digital infrastructure, with its elements (traditional technologies such as connection systems, wireless connection, mobile devices, databases etc.) formation a basis of contemporary economic relations. However, digital infrastructure is supplemented by completely new categories -- the complex of objects carrying out automatized actions and technologies and platforms which ensure their activity. S. S. Tatarinova names a digital platform as a touchstone of technical realization of the digital technology system. At the same time, digital platform is defined as platform in a form of an informational system, which maintains a complex of automatized processes necessary for consumption of digital goods and services by interested actors (by not only average consumers and business community but also by state authorities) on digital markets TatarinovaS. S.Cifrovayaehkonomikaipravo: novyevyzovy -- novye-perspektivy [Digital economics and law: new challenges -- new prospectives] // YuridicheskijvestnikSamarskogouniversiteta [Legal messenger of Samara univer-sity]. 2017. V. 3. № 3.P. 62--66.. This definition brings out one of the principal features of a digital platform -- process automatization. Taking that into consideration, to our mind, the automatization of not only digital goods and services consumption processes but of production and economic operation processes as well takes place.

In our opinion, the autonomous non-profit organization «Digital economics» has come up with a more universal definition of a term «digital platform». In accordance with this definition a digital platform is a system of algorithmical, mutually beneficial relations of a significant number of independent participants of a field of economics (area of activity), which take place within a united informational environment. This system leads to a decrease of transactional expenses due to the implementation of digital technologies connected to data managing and to the changing of labor division system Access policy: URL: http://files.data-economy.ru/digital_platforms.pdf. The global information technology report 2015: ICTs for inclusive growth / ed. by S. Dutta, Th. Geiger, B. Lanvin// World econ. forum. Geneva, 2015. 357 p. URL: http://reports.weforum.org/global-information-technology-report-2015/..

Considering above-mentioned, digital platform meets the following criteria:

1) algorithmization of platform members' interaction;

2) mutually beneficial character of platform members' relations;

3) the importance of the quantity of the participants (the scale) using the platform for interaction;

4) the existence of a united informational environment in which the participants' interaction takes place;

5) the existence of an effect of transactional expenses decrease during the platform participants' interaction in comparison with the outside-platform interaction.

Despite the non-homogeneous character of infrastructural links, they have a mutual functional purpose and necessary unity which predetermines the possibility of their unification in an independent complex, the latter fact being not insignificant for legal regulation.

Informational infrastructure sets objectives of a somewhat different kind, comparing to the ones of digital infrastructure, which are the following:

— Development of the networks which ensure economics' demands in gathering and transmission of data;

— Development of data centers system which guarantees the provision of available, stable, safe and economically effective services related to data storage and processing and allows, among other things, to export data storage and processing services;

— Formation of an efficient system of gathering, processing, storage and provision to consumers of spatial data, which provides for state, business and individual demands in an up-to-date and reliable information.

Digital infrastructure, in its turn, is primarily directed at implementation and constant utilization of means of processes automatization. While informational infrastructure's priority is the preparation of information and ensuring the access to it for «common» subjects, digital infrastructure is aimed at enlargement of an existing informational infrastructure by means of automatic performance which used to be executed by «common» subjects.

Nowadays, we can distinguish between 3 principal objectives which digital infrastructure deals with:

Complex optimization and interconnected digitalization of digital economics subjects' activities;

Improvement of legally technical, organizationally methodical and other basic principals of production, implementation, exploitation and development of existing and created components of digital environment. In particular, by addressing implementation of means of automatization as components of digital environment we can talk about a new type of subject, since the actions are performed not by individuals, legal entities or other kinds of subjects stipulated in current legislation;

Formation and development of a stable, reliable and safe environment in which «transparent» digital economics technologies are implemented and which uses existing and created data centers, united cloud platform, secured connection and data transmission networks, data-managing digital platforms etc.

Contemporary state of economic circulation entails significant changes in legal regulation of economic relations. Even now, it is necessary to change the legal regulation paradigm related to arising economic relations.

Digital infrastructure development and demands regarding digital processes security lead to the necessity to ensure stability, continuity and reliability of infrastructural elements for the purposes of economic processes realization.

In Russia, the majority of issues, arising from traditional informational and telecommunicational technologies utilization in various areas, have been resolved by now.

But at the same time, pursuant to the «Global informational technologies» report, the Russian Federation is ranked 41^st when it comes to readiness for digital economics which puts the country far behind top-10 states¹¹. This significant development gap in digital economics in comparison to world leaders can be explained by legislation issues and by an environment insufficiently favorable for business purposes.

In the 21^st century, in terms of digital economics formation, it has become crucial to reform the state model of social and economic development. Moreover, politics and legal regulation ought to be modernized to resolve 21^st century problems and issues. With that being said, law can directly influence both acceleration and deceleration of technological development. Initial stages of new technologies development are mostly connected with prohibitions or significant limitations of its utilization. Therefore, the law reacts to a possibility of causing harm: both economical and physical, since when new technologies are created they entail new threats unknown to previous legislations. Fear for state and social security serves as a driver, prompting the authorities to «speak legal» when it comes to technologies. Current critical digital economics issues are more complicated. Keeping in mind rapid changes, the legislature is bound to adhere to visionary approach to regulation. At the same time, it is crucial to avoid excessive zeal -- otherwise human and technological resources might migrate to jurisdictions that are more comfortable.

Law regulating digital economics relations acquires a number of peculiarities, such as:

— e relations in terms of digital economics are regulated by not only traditional legal instruments but also by using of informational and telecommunicational technologies. In addition, technologies tend to become an instrument of legal regulation.

E. A. Voinikanis points out that «while a in a legal regime the contents of norms are determined by law and court decisions, in lexinformatica the rules of conduct are defined by technical possibilities and technology-using practices» Voinicanis E. A.Pravointellektualnojsobstvennosti v cifrovuyuehpohu: paradigmabalansaigibkosti [Intellectual prop-erty law in a digital era: the paradigm of balance and flexibility]. М.: Jurisprudence, 2013. 552 p..

— technologies development not only promotes automatization of processes related to decision-making and execution of these decisions. It usually also allows to prevent a violation of a certain right, since, on the one hand, means of automatization are deprived of such significant feature as an intent. On the other hand, the process of execution algorithms programming (formation) unavoidably leads to the necessity to eliminate imperfections and contradictions in enforceable legal documentation, these algorithms could have been used to make random decisions;

— digital economics formation takes legal regulation to a supranational level. State monopoly regarding legislation ceases to exist. As E. A. Voinikanis correctly states, «new types of transnational law no longer have a close connection to the state which was not so long ago regarded as a creator of not only national but also international law. By now, international relations in both profit and non-profit areas are not usually influenced by national legislature but are rather carried out directly. Private bodies become representatives and conduct guides and they are notdirectly connected to the will of the state, unlike empowered bodies in international law» Voinicanis E. A.Ор. cit..

Without a doubt, digital economics will lead to the reduction of human participation in a decision-making process. At first such reduction will have a form of a more active utilization of decision-making support system. Later in the future these systems will only permit a minimum human-operator participation and in the long run such participation will be fully eliminated.

It is a well-known fact that the speed and accuracy of legislation adaptation for business needs is one of the primary factors of national economy competitiveness in a field of new high-tech markets formation. It is hard to overestimate the unfavorable regulating environment influence of a digital business development. The run-off of promising technologies, entrepreneurs and funds to propitious jurisdictions, technological backwardness and low investment attractiveness of Russian companies -- these are just a few of crucial consequences of an insufficient rate of legislation changes.

This leads to following questions: at what point it is necessary to start putting control over newly created technologies and whether they should be controlled at all. These questions remain open.

In this context, the primarily aim of law as a science becomes the formation of a digital technologies legal regulation model allowing to maintain the balance between the conservation of fundamental social and legal values and unhampered development of new technologies directed at the quality improvement of human lives.

Besides, the spreading of new technologies in economics itself becomes a new challenge to legal legislation at the current stage and, thus, demands a thorough theoretical studying and bases provision.

It is of a great importance to understand that successful practical implementation of digital economics ideas can be achieved mainly by adaptation to new legal realities and by activities of regulating authorities. In particular, the key role is played by the formulation of distinct mechanisms related to regulation and rules of data access and also by stipulation of legally prescribed requirements to machinery, equipment and processes and by provision of liability grounds for automatically performed processes and actions (auto-piloted vehicles, automatic online transactions etc.).

More than that, one of the most important components is a transparent and predictable policy in the area of legal regulation of the Internet and informational technologies. Many processes which used to demand physical presence are becoming interactive and the laws which set them forth not always correctly endure such a «rebirth». This entails investment risks, start-up setting difficulties, misunderstanding on the verge between online and offline operations while, for example, being engaged in electronic trade and in the provision of various informational services. At the same time, an understandable regulating practice, on the contrary, will enable entrepreneurs and investors to come up with long-term plans and start new projects which will draw financial flows, will increase an employment-rate, and will contribute to growth of adjoining fields.

The prior goal of the direction related to legal regulation, is to form a new regular environment which will provide a favorable legal regime for the creation and development of modern technologies and for the execution of economic activity connected to utilization of such technologies. For the purposes of this direction it is intended to:

— create a permanently functioning mechanism to govern changes and competences (pieces of knowledge) in the area of digital economics regulation;

— eliminate crucial legal limitations and to form separate legal institutes which are to be aimed at achievement of primary objectives of digital economics formation;

— form a legal regulation complex to govern the relations arising from digital economics development;

— take measures directed at economic activity stimulation in the fields connected to modern technologies, gathering of date and its utilization;

— come up with a digital economics development policy and to harmonize the approaches to legal regulations;

— create a methodical touchstone for competences development in the sphere of digital economics regulation.

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