State power and the response to Wikileaks

The US response to Wikileaks has been an interesting illustration of both the limits and extent of state power in an age of transnational information flows. The problem for the US has been quite straightforward. The Internet makes it more difficult for states (even powerful ones such as the US) to control information flows across their own borders and others. It is much easier than it used to be for actors to hop jurisdictions by e.g. moving a particular Internet based service from one country to another, while still making it possible for people across many countries to access the service. This makes it much harder for the US and other actors to use the traditional tools of statecraft – their jurisdiction does not extend far enough to stop the actors who they would like to stop.

However, there is a set of tools that states can use to greater effect. The Internet and other networks provide some private actors with a great deal of effective transnational power. Banks that operate across multiple jurisdictions can shape financial flows between these jurisdictions. Information companies may be able to reshape flows of information in ways that advantage or disadvantage particular actors. These private actors are often large, relatively immobile, and partially dependent on state approval for their actions. They thus provide a crucial resource for states. Even if states cannot directly regulate small agile actors outside their jurisdiction, they can indirectly regulate them by pressganging big private actors with cross-jurisdictional reach. A few years ago, the US found itself unable to regulate Internet gambling firms which were based in Antigua and selling their services to US customers. But the US was able to tell its banks that they would suffer legal and political consequences if they allowed transactions between US customers and Antiguan gambling firms, helping to drive the latter out of existence.

This is the topic of my least cited article evah (PDF), where I argue that:

states are not limited to direct regulation; they can use indirect means, pressing Internet service providers (ISPs) or other actors to implement state policy. For example, states might require ISPs to block their users from having access to a particular site, or to take down sites with certain kinds of content. More generally … a small group of privileged private actors can become “points of control”—states can use them to exert control over a much broader group of other private actors. This is because the former private actors control chokepoints in the information infrastructure or in other key networks of resources. They can block or control flows of data or of other valuable resources among a wide variety of other private actors. Thus, it is not always necessary for a state to exercise direct control over all the relevant private actors in a given issue area in order to be a successful regulator.

And this is exactly what the US is doing in response to Wikileaks. US political pressure caused Amazon to stop hosting Wikileaks, EveryDNS to break’s domain name, eBay/Paypal to stop facilitating financial transactions, Swiss Post to freeze a Wikileaks bank account (in perhaps the first instance in recorded history of a Swiss bank taking residency requirements seriously), and Mastercard and Visa to cease relations with it. This is unlikely to affect the availability of the information that Wikileaks has already leaked. But it may plausibly affect the medium and long run viability of Wikileaks as an organization. This will be a very interesting battle to watch.

3 Responses to State power and the response to Wikileaks

  1. commentator December 8, 2010 at 11:53 am #

    «Thus, it is not always necessary for a state to exercise direct control over all the relevant private actors in a given issue area in order to be a successful regulator. And this is exactly what the US is doing in response to Wikileaks.»

    Ok, but is it working?

  2. rfb December 8, 2010 at 1:50 pm #

    regarding “Swiss Post to freeze a Wikileaks bank account (in perhaps the first instance in recorded history of a Swiss bank taking residency requirements seriously)”

    Actually the management of Postfinance (the financial services daughter company of swiss post) denies strenuously that any external pressure whatsoever was exerted.

    It’s plausible actually. Not completely certain, but plausible. But the explanation requires background on the domestic situation.

    Postfinance isn’t a bank. It’s state-owned, legally restricted on what services it may offer, to reduce its competition with Credit Suisse and similar banks. One of the things Postfinance is legally not allowed to do is to offer financial services to non-swiss residents, outside very narrow bounds.

    The actual banks are, of course, utterly unworried about where their customers live. They are very worried indeed about a state-owned competitor, that is by far the biggest retail financial services provider in switzerland, muscling into there business.

    Therefore UBS and Credit Suisse watch Postfinance very carefully to ensure stepping beyond what they are allowed.

    So along comes Assange and Wikileaks, announcing to the world that this postfinance account is available for donations.

    And without realising it, he’s announcing that Postfinance are breaking the swiss Postgesetz – the law that defines what postfinance are allowed, and not allowed to do.

    Hence the rapid freezing of the account. For entirely domestic swiss legal reasons. They were legally obliged to close the account, as they do for several hundred such accounts each year, where they are opened with false documentation. Otherwise the “real” swiss banks would be on their case.

    Or as the Postfinance spokesman put it, rather grimly, in an interview with swiss TV (my translation of the german):

    “Julian Assange appeared personally at the counter to open the account (and gave a false address in geneva). If a swiss citizen with correct details had opened the account for wikileaks, we wouldn’t have had any problem with it”.

    A case of Assange being too clever by half, in fact. But the press release by Postfinance on the reasons was utterly unclear too.

    Interview link is here (but in german).

    Not, of course, that such boring details interest those wikileaks supporters who then attacked the postfinance website, naturally.

  3. Liza December 9, 2010 at 3:51 am #

    Jeeze this wikileaks craziness is dangerously spinning out of control. Think about it, it is a sensitive and touchy matter simply because there are two valid perspectives on it. I think it’s not reasonable to have a strong opinion any way you slice it, you know what I mean? Naturally, it’s definitely a matter of CIA concern, and it is also a matter of free speech. But wouldn’t you agree there must have to be a place where we can meet in the middle? And all of the ddos attacks going on does not appear that it’s gonna help bring us any closer to finding a solution, but then who knows for sure…could it be it’s something that has to work itself out?