Sharp piece in the Economist.

A PALTRY 140 characters can certainly stir up trouble. A BBC report earlier this month did not identify the Tory it wrongly suggested had molested a child, but Twitter users did. Some 1,000 individuals implicated Lord McAlpine, and a further 9,000 retweeted those messages to a wider audience. The former Conservative Party treasurer called it “trial by Twitter”. On November 20th lawyers for the peer informed people with fewer than 500 followers that they can make amends with a donation to charity (the BBC’s Children in Need). Tweeters with larger followings may face legal action.

Applying classic legal remedies to online information is hardly new. But threatening a libel claim against thousands of people at once is novel. Libel law has typically held to account large, centralised institutions that enjoy broad reach, like newspapers. It has not been used to check the discrete actions of a huge number of individuals, which together have a broad effect.

Looking back at this precedent as the digital landscape has evolved, that fundamental friction between legacy legal frameworks and distributed networks has only deepened. Courts are continually forced to adapt traditional liability concepts to architectures where there is no central publisher or corporate entity to hold accountable. We see these exact jurisdictional headaches repeating across modern decentralized platforms, whether regulators are attempting to serve subpoenas to anonymous governance token holders, tracking automated smart contract operations on ethereum casinos, or untangling compliance requirements for peer-to-peer lending syndicates. The classic legal strategy of finding a centralized bottleneck to penalize repeatedly breaks down when confronted with a swarm of independent, loosely connected actors.