[THE VIEW] Uncertainty in Regulation of Sharing Economy and New AI Technologies

Legal Controversies Over Regulation of New Technologies and Products
Including the New York Times Lawsuit Against OpenAI and Microsoft

After the emergence of new technologies and products, laws regulating these products inevitably lag behind. In 2020, the Korea Health Promotion Institute began applying warning images and anti-smoking phrases printed on conventional cigarette packaging to electronic cigarettes as well. Although the Smokers' Rights Solidarity filed a lawsuit against this, the Seoul Central District Court ultimately ruled this month that placing warning labels on electronic cigarettes is not illegal. From the perspective of non-smokers, electronic cigarettes may appear just like conventional cigarettes, so it may be puzzling why laws applied to conventional cigarettes were only recently extended to electronic cigarettes and why such lawsuits were even possible in the first place. However, it turns out that under current law, only products using tobacco leaves as raw materials are classified as tobacco. Therefore, liquid electronic cigarettes that use tobacco stems or roots as fuel or synthetic nicotine as an ingredient are not classified as tobacco. Consequently, tobacco taxes are not imposed on electronic cigarettes.

This is also the case in the United States. Since the U.S. defines tobacco as products consumed by burning tobacco leaves, liquid electronic cigarettes are not yet classified as tobacco. While tobacco advertising is prohibited on television or radio in the U.S., electronic cigarettes can avoid these restrictions. As a result, Juul Labs, the largest electronic cigarette manufacturer in the U.S., has aggressively advertised on television for about ten years. The U.S. government believes that Juul's advertising is the main reason for the explosive popularity of electronic cigarettes among teenagers and has belatedly begun regulating electronic cigarette advertising.

Electric vehicles also face inadequate application of general laws within the U.S. In the U.S., automobile manufacturers are prohibited from selling directly to consumers. Therefore, cars can only be sold through independent dealers. However, Tesla is the only company exempt from this law. This is because, under U.S. law, a vehicle must have an internal combustion engine that obtains energy by burning fuel to be classified as an automobile, and electric vehicles lack internal combustion engines. Thus, Tesla vehicles are not legally considered automobiles. Consequently, Tesla is the only company in the U.S. that sells cars directly to consumers. Dealers have filed numerous lawsuits opposing this, and legal uncertainty regarding electric vehicle sales methods remains unresolved.

Newly emerging sharing economy services in recent years have also experienced similar growing pains. Uber, a ride-sharing service that is illegal in Korea but legal in the U.S., has recently come under legal scrutiny again as proposals have been made to guarantee minimum wage laws for drivers. In New York, a new law requires that hosts must reside in their homes while renting them out through the lodging-sharing service AirBnB. Even services that have been commercialized for ten years still face regulatory uncertainties.

Recently, the American media company The New York Times filed a lawsuit against OpenAI, the developer of ChatGPT, and Microsoft, which operates an AI search engine. The lawsuit alleges that The New York Times' content was used without permission during the AI training process. It is unclear when this lawsuit will conclude, but for the next several years, regulation of new technologies such as artificial intelligence will remain a contentious issue.

Seo Boyoung, Professor at Indiana State University, USA