01 March 2022

Algorithmic Domination

'Algorithmic Domination in the Gig Economy' by James Muldoon and Paul Raekstad in (2022) European Journal of Political Theory 1–21 comments 

Digital platforms and application software have changed how people work in a range of industries. Empirical studies of the gig economy have raised concerns about new systems of algorithmic management exercised over workers and how these alter the structural conditions of their work. Drawing on the republican literature, we offer a theoretical account of algorithmic domination and a framework for understanding how it can be applied to ride hail and food delivery services in the on-demand economy. We argue that certain algorithms can facilitate new relationships of domination by sustaining a socio-technical system in which the owners and managers of a company dominate workers. This analysis has implications for the growing use of algorithms throughout the gig economy and broader labor market.

The authors argue 

Algorithmic decision-making is increasingly deployed in a variety of important contexts from criminal justice and policing to credit scoring and healthcare (Kitchin, 2017). The proliferation of algorithms throughout society has led to the growth of a large body of literature in science and technology studies, legal studies, computer science, sociology, geography and media studies, among others (Beer, 2017; Striphas, 2015; Ziewitz, 2016). Corresponding to this growth in the use of algorithms has been an explosion of app-mediated platform labor (Graham et al., 2017). In the UK, the number of adults who undertook tasks obtained through a digital platform doubled from 2016 to 2019 (Huws 2020: 4). This has also resulted in the rapid spread of digital management practices throughout different parts of the workforce. 

Algorithms are employed because they promise to make processes more efficient, accurate, and unbiased. However, an emerging critical literature has called into question the idea that algorithms can evade human bias in decision making. There is a range of evidence suggesting that algorithms can often reproduce and exacerbate structural inequalities, injustices, and forms of unfreedom, rather than alleviate them (Benjamin, 2019; Noble, 2018; O’Neil, 2016). Recent discussions of algorithmic injustice have contributed to calls for greater attention to questions of fairness and accountability including issues of procedural fairness and more substantive approaches focused on interventions into decision outcomes and their social impact (Janssen and Kuk, 2016; Pasquale, 2015; Zimmerman et al., 2020). 

While questions of algorithmic injustice have received widespread consideration, political philosophers have so far paid less attention to the question of how algorithms impact our freedom. In this article, we develop the concept of algorithmic domination to address these concerns and provide an account of the dominating effects of algorithms used as tools of worker control. Algorithmic domination can occur in a variety of different domains, but we focus here on the role of algorithms as a tool by companies to manage contract workers involved in app-work in the gig economy (Duggan et al., 2020). 

Consider the following examples. Amazon warehouse employees report working under constant surveillance with timed toilet breaks and just nine seconds to process a package (Selby, 2017). Uber drivers must work during peak periods to chase ‘surge pricing,’ often earning less than the minimum wage. A hidden army of ‘microworkers’ labor on platforms such as Amazon Mechanical Turk and Clickworker, receiving as little as US$2–3 an hour for monotonous piece-rate tasks with no employment benefits or protections (Jones, 2021). What these examples have begun to point to is the potential negative impact of the deployment of algorithms in the gig economy and other sectors impacted by the introduction of digital technology (Rosenblat and Stark, 2016). 

For contractors of companies such as Uber and Deliveroo, the tasks, time to complete, rate of pay, and delivery route can all be automatically assigned through the protocols of the company’s software. Within such socio-technical systems, it can appear as if workers are no longer instructed by a human manager but by an automated computer algorithm. This raises the question of whether certain precarious workers could be said to be governed – and perhaps even dominated – by a non-human computer system. Does a company’s ability to nudge, incentivize, manipulate, and control workers’ behavior through algorithmic management constitute an objectionable form of uncontrolled power? 

We argue that algorithmic domination occurs when an individual is subjected to an uncontrolled power, the operations of which are determined by an algorithm. The particular case study we focus on in this article is gig workers in the food delivery and ride hail sectors, but the concept of algorithmic domination can, in principle, be applied much more broadly to other workers in the gig economy and in standard employment contracts where algorithms are also employed to manage workers (Huws, 2020). In the case of the gig economy, we argue that the use of this software for managing workers facilitates a power structure and social relationship of domination between bosses and workers. Algorithms are deployed by bosses as part of a broader socio-technical system designed and implemented in order to create and sustain a specific regime of labor control (Kitchin, 2017; Lee et al., 2015). Our analysis emphasizes that beneath the appearance of automatic decision making and neutral service delivery lies the recognizable exercise of social power. These systems can increase the capacity for bosses to dominate workers by providing new tools for them to exercise uncontrolled power and weaken the ability of workers to organize and resist This is not a radically new form of power, but an augmentation of existing capacities and their formalization in new socio-technical systems that embed certain patterns of labor management and work relationships as the new normal. 

Understanding how these forms of algorithmic domination operate in practice is important due to how tech companies often employ the language of worker flexibility, freedom, and autonomy as key benefits of their business models. Revealing the sham behind their claims of self-entrepreneurship and empowerment helps us understand the realities of work in the platform economy (Ahsan, 2020). Technology companies claim their algorithmic forms of management offer greater freedom. However, if we are right, what they can enable is the increased domination of workers. 

Algorithmic domination can give rise to distinctive relationships between bosses and workers mediated through digital technology. Workers taking commands generated by an algorithm may have less room to negotiate specific aspects of their work schedule and may be subject to more stringent and demanding forms of workplace control. The affordances of the new technology increase computational asymmetries between bosses and workers and allow the former to intervene at a more minute level in ways that are not feasible if required to be undertaken by a human supervisor. Algorithmic domination is also distinctive in adopting new systems of gamification and incentive schemes administered through software that has been specifically designed to induce certain responses from workers. 

This article proceeds as follows. First, we draw on the writings of labor and socialist republicans to identify how workers are subjected to distinct forms of domination in the capitalist workplace. We then put this literature into conversation with an emerging body of empirical studies of algorithmic management to show how republican theories of non-domination can address cases of work in the gig economy involving systems of algorithmic management. In the following section, we define algorithmic domination and explain how it could be applied to case studies in the food delivery and ride hail sectors. We then argue that the dominating aspect of algorithms in the workplace is not intrinsic to the technology itself, but is part of the power relations established within capitalist enterprises. As a result, we briefly examine an alternative possibility of algorithms utilized by platform co-operatives, which we argue could potentially involve a non-dominating use of algorithms in work processes. Finally, we conclude by establishing a framework for how algorithmic domination could be applied to other cases.

28 February 2022

Election Funding

Policy observations and recommendations from today's NSW ICAC report on Investigation into political donations facilitated by Chinese Friends of Labor in 2015 (Operation Aero)

Donation laws across Australian jurisdictions 

Political financing laws differ significantly, however, across the federal, state and territory jurisdictions. Without a prohibition and caps on the amount of donations that can be made in other jurisdictions, such as in the federal system, all prohibited donors in NSW still have a vehicle to exert political influence by making major donations elsewhere. 

While uniformity in political finance regimes across jurisdictions may not be feasible (or necessarily desirable) there is a need for greater transparency as a control to prevent undue influence and corruption. However, as NSW, Queensland and other jurisdictions continue to reform their electoral donation and expenditure laws, it can be argued (or at least perceived) that electoral funding systems are becoming more divergent than harmonised. 

Concerns about the lack of harmonisation of election finance laws across Australia were raised in the Commission’s 2014 report, titled Election funding, expenditure and disclosure in NSW: Strengthening accountability and transparency, as follows: Each state, territory and commonwealth jurisdiction has its own set of electoral funding laws. Operating at a national level, parties, third-party campaigners and associated entities could take advantage of discrepancies between the laws of the different state and federal jurisdictions. NSW laws have the greatest discrepancies when compared with the other electoral funding laws of Australia. Relative to other jurisdictions, NSW caps and disclosure thresholds are lower, specific groups are banned from donating, and public funding is higher, thereby creating an environment in which cross-jurisdictional differences may be exploited. 

The channelling of donations through different jurisdictions is a way of circumventing the intent of the rules in NSW. As a result, tracking the flow of money – and influence – from donors to campaigners to election expenditure is exceedingly complex. For example:

• property development organisations in NSW can lawfully donate for the purpose of funding federal campaigns, but not at state level 

• an individual, living in any Australian jurisdiction, can make a single or multiple lawful donations uncapped at the federal level 

• the threshold for disclosure of donations at the federal level ($14,500) is much greater than it is for NSW or any other state in Australia 

• a property developer looking to influence a political party can donate $14,499 at the federal level to be used for “federal purposes” and it need not be disclosed.

By law, money for federal purposes must be kept in separate bank accounts; for example, one to be specifically used for “other/general purposes”. In practice, money from the “other/general purposes” account could be allocated for state purposes without being identified in any NSW audit. 

Mr Huang, who was based in NSW, was not constrained by the dollar amount of donations he could make at the federal level. Indeed, official records show that between 2012 and 2015, Mr Huang (either by himself or by companies associated with him) made as many as 20 donations, totalling $1,095,000, to parties at the federal level. Mr Dastyari, former NSW Labor general secretary and Australian senator, gave evidence that accepting funds into the NSW Labor federal account, which would otherwise be prohibited at the state level, is a known practice, as follows:

[Counsel Assisting]: [Mr Dastyari]: And that was your practice when you were general secretary, I take it? Of course, I mean, yeah, you, the rules, the rules are very very clear. You take, they’re not, let’s be clear, prohibited state donors are not prohibited federal donors. You take the money, accept the money into the federal campaign account, and you fully disclose it. 

As Mr Dastyari (indirectly) pointed out during the inquiry, the $100k cash given by Mr Huang could legitimately have been donated at the federal level:

...to me what’s incomprehensible about this entire enquiry, to be honest, is that, is if the series of events that have been purported are true, they could have just accepted the money into the federal campaign account, which is what, how you normally take money from prohibited donors or people above the limits. 

The federal rules allow you to take that money. 

In Australia’s federal system, it is not uncommon for there to be nine separate sets of laws regulating many areas of public policy. Although the Commission cannot direct recommendations at the Commonwealth Government, it would nonetheless be helpful if there was greater coordination between the federal, states and territories to ensure that reforms to strengthen legislation in one jurisdiction do not unduly create legislative loopholes in another. For example, greater consistency and transparency is needed around the definitions of “donor”, “donation” and “donation threshold”. Regardless of whether a level playing field between jurisdictions is an attainable goal, at the very least, there should be minimal confusion. This is particularly so with regard to donation disclosure and compliance requirements; both for the donor and the responsible reporting person(s) in political parties. 

Cash donations 

Compared with payments made by electronic funds transfer, credit card or cheque, donations made in cash can be more easily: • recorded in the name of a person or organisation that is not the real donor (possibly to conceal a prohibited donation) or not recorded at all • split to avoid donation caps or disclosure caps. 

An examination of the NSW Labor financial records by the NSWEC shows that most cash deposits were, in the period under investigation, less than $1,000, and that transactions involving large amounts using cash was not a common business practice. The cash donations disclosed by NSW Labor in relation to the 2015 CFOL dinner appear to be exceptions. As discussed above, there was no regulation in NSW specific to cash donations until 31 December 2019. 

In the NSW Parliamentary Legislation Review Committee Digest Report (No 7/57 – 22 October 2019, iv), the committee noted that the intention of the Electoral Funding Amendment (Cash Donations) Bill 2019 was to: ...improve traceability and transparency of donations, promote compliance and improve the integrity of the electoral system. These intentions are consistent with the broader objects of the Electoral Funding Act 2018. 

Since 1 January 2020, it has been unlawful for a person to knowingly make or receive a political donation in cash that exceeds the value of $100 (s 50A Electoral Funding Act 2018). The penalty to be imposed on a person who does any act that is unlawful under divisions 5 (Management of donations and expenditure), 6 (Prohibition of certain political donations) or 7 (Prohibition of donations from property developers or tobacco, liquor or gaming industries) of Part 3 of the Electoral Funding Act 2018, if the person was at the relevant time aware of the facts that result in the act being unlawful, is set out in the offence provision s 145(1). 

The offence under s 145(1) of the Electoral Funding Act 2018 carries a maximum penalty of 400 penalty units or imprisonment for two years, or both. At the time of writing this report, it is noted that prosecution in Court is required to enforce an offence under s 145(1) of the Electoral Funding Act 2018 relating to a contravention of the cash donation provision in s 50A of the Act. The Commission notes, however, that the NSWEC can issue penalty notices under s 148 of the Electoral Funding Act 2018 for breaches of other provisions of the Act, including offences under s 145(1) relating to contraventions of various sections in Part 3 Division 5 of the Act (concerning management of donations and expenditure), which carry similar penalty unit points and terms of imprisonment. 

For the offence of exceeding the $100 cash limit, a distinction should be made between the value of the cash donation made, and the role and responsibility of the person who accepted the cash donation. 

Consider, for example, a cash donation that exceeds the cap by $50. If a local government electoral candidate accepted a cash donation of $150, this would be an offence, but one that is less likely to proceed to prosecution given the dollar value of the donation against the cost of taxpayer money incurred in proceeding to Court. Consider also the distinction between the role and responsibility of a party agent (or party official) who accepted and/or disclosed a donation that exceeded the cap, and a volunteer supporting the party at a community event (who perhaps inadvertently accepted such a donation because they were unaware of the rules). Both circumstances would constitute an offence; however, it may be impractical to proceed with prosecution against a volunteer. In summary, the prohibition on cash donations exceeding $100 strengthens transparency and goes some way to rebuild public confidence and integrity in the NSW electoral system. However, less severe offences may not warrant the costs and taxpayer expense involved in taking such cases to prosecution. Adopting an approach that allows the NSWEC to issue penalty notices for less severe offences will flag more breaches of donations law that simply may not have been acted upon and ultimately assist political parties to ensure they are compliant with regulatory provisions governing donations. 

The Commission supports legislation to limit cash donations to $100 but makes the following recommendation: 

Recommendation 1 

That the NSW Government amends the Electoral Funding Regulation 2018 to provide for the NSWEC to issue penalty notices for less severe breaches of the prohibition on cash donations under s 50A of the Electoral Funding Act 2018

The management of donations and the NSW Labor governance arrangements 

Political parties are voluntary, not-for-profit organisations that organise themselves in accordance with their own philosophical ideals. Even well-established parties such as NSW Labor tend not to have significant resources and rely heavily on party volunteers. 

The public has an interest in the organisation and practices of registered political parties for state elections, not least because these parties may receive taxpayer funding to subsidise their electoral campaigns and administration. 

At a minimum, the public should expect that parties have proper financial policies and procedures in place to comply with electoral funding legislation. 

In relation to the Administration Fund, the Commission’s aforementioned 2014 report stated that: Even though taxpayers pay both for the parties to administer themselves and the NSWEC to administer the fund, in the end, parties receive the full amount even if their internal controls are unsatisfactory. 

Consequently, the first recommendation in that report was: That the NSW Government amends the Election Funding, Expenditure and Disclosures Act 1981 to convert administration funding from a reimbursement scheme to a grant, contingent on the internal governance capability of political parties. 

The Commission’s recommendation was not adopted. Given the events that took place in this investigation, the Commission reiterates that the rationale behind this recommendation remains sound, and this is reflected in recommendation 2. 

As discussed above, NSW Labor and Country Labor shared the same political ideology, staffing arrangements and governance structures. Importantly, one designated party agent was legally responsible for making disclosures of political donations for the two parties. In effect, a lack of satisfactory governance arrangements in NSW Labor meant a lack of satisfactory governance arrangements in Country Labor. The shortcomings in governance capabilities within NSW Labor’s head office during the period under investigation (2015–16) were made evident during the inquiry. The need to strengthen the systems and processes was particularly apparent, as set out in table 4. 

Legacy of lax governance arrangements 

The lax governance arrangements prior to, and leading up to the time of the event, was a matter that Ms Murnain knew of when she took over from Mr Clements as general secretary. Ms Murnain had conveyed these concerns to Mr Dastyari (predecessor to Mr Clements), who told the Commission: The Labor Party accounts and donations were a ‘shit show’ and she was whinging to me about how everyone had abandoned her and she’d been left alone in the Labor Party office and we all moved on to our other careers and she was there to clean up the mess. 

Ms Sibraa referred to the governance arrangements and process around the handling of donations as “sloppy, poor governance, terrible way of functioning”. Ms Murnain told the Commission that, in 2015, NSW Labor initiated three independent reviews to address the lack of satisfactory governance arrangements:

...the party undertook three different reviews and has undertaken some since as well in relation to procedures on handling donations in particular but also in relation to the way the office is structured. It, it was the case back then that procedures, everyone has a slightly different view of procedures because that’s what happens when things weren’t written down. Some, there were some areas of the office that had procedures but obviously governance was a pretty significant issue in 2015, which has been widely reported, and then we proceeded to make a significant number of changes to improve accountability and governance in the office because of those reviews. So there’s a number of recommendations, rules, changes and processes that have been put in place since then.

As Ms Murnain indicated, several attempts were made to address the problems of governance within NSW Labor’s head office. The Tarrant/Tierney review (2015), the Whelan/Farrar review (2015–16) and the Needham/ Bianchi review (2015) each respectively involved a review of the administrative and finance committees, the head office workplace, and the Australian Labor Party (NSW Branch) Rules 2020. 

Ms Murnain gave evidence that the Needham/Bianchi review in particular tackled the “pretty systemic cultural issues” that beset the working environment. Subsequent to the above reviews, and under Ms Murnain’s leadership, a number of governance improvements were put in place. For example, the role of governance director was created and a ban on cash donations above $1,000 was introduced. Important as those improvements were, the matters exposed in this investigation highlighted the serious shortcomings in the governance of NSW Labor head office. More recent measures have included a staff code of conduct and improvements to IT systems to track and disclose donations. In October 2019, the then NSW Labor leader, Jodi McKay, and federal Labor leader, Anthony Albanese, called for “a new era of transparency and accountability” and announced that a further two-part review of NSW Labor, would be led by former Commonwealth attorney general Michael Lavarch. The focus of the review was on the issue of power within NSW Labor, including: 

Governance shortcomings at the NSW Labor head office 

Accounting for, receipting and banking donations 

There was a lack of clarity around who was accountable for bringing the donations from the fundraising event back to NSW Labor head office. Mr Clements considered this to be Mr Cheah’s responsibility. And, although the financial controller agreed that as a matter of proper practice, tax invoices and receipts (such as the $50,000 in donations made in 2016) should have been issued directly to donors, receipts were sent directly to Mr Wong’s office (in 2016). 

There was also no policy or procedure to prohibit NSW Labor staff taking home large amounts of cash before banking (such as the $100,000 that Mr Cheah took home in 2015). According to Mr Cheah, Mr Wong, Mr Clements and Ms Murnain, the 2015 CFOL dinner was typically “chaotic”. 

The organisation of fundraising events 

Although the 2015 CFOL dinner was organised to raise donations prior to the 2015 NSW State Election, the invitation/reservation forms made no reference to Country Labor for which donations were purportedly made. Any fundraising event, which had the potential to raise money for both NSW Labor and Country Labor, should have ensured that the donation form included an option for donors to clearly indicate to which party they wished to donate. 

Identifying prohibited donors and donations that exceed statutory caps 

There was a due diligence failure to identify that the donor disclosure forms for NSW Labor (in colour) were photocopied (in black-and-white) to produce otherwise identical but false declarations of donations made to Country Labor. This, and the failure to identify the identically handwritten “$5000” on the forms should have alerted those reconciling the $100k cash and the forms to probe deeper and ensure matters were in order. 

The roles and responsibilities of staff, including volunteer staff 

Ms Murnain said that in 2015:

... people had in their heads their roles and responsibilities, but nothing was written down that clearly delineated people’s roles that other people would have access to. No-one really understood each other’s roles other than when they worked with each other to understand it. 

Risk management and internal audit 

Ms Wang, financial controller, agreed that the state of the NSW Labor accounts was in a form that the auditors would query in 2016. NSW Labor’s failure to manage gifts and conflicts of interest Mr Clements received gifts from Mr Huang in a personal capacity but did not disclose this to NSW Labor. During the inquiry, he agreed this to be a potential conflict of interest 

Compliance and ethical obligations of senior party officials 

The integrity of senior party officials is called into question by their failure to meet their compliance obligations. For example, Ms Murnain did not report her suspicions, if not knowledge, that an unlawful donation may have been made, either within the party, or to the NSWEC during its investigation of the event. 

Mr Clements, did not disclose the $10,000 gifted by Mr Huang (to give to a union member) to either NSW Labor or the NSWEC. 

Where power lies within the Branch, how that power is exercised, what are the checks and balances to the use of power and how those entrusted with power are held accountable for using power in the best interests of the Party as a whole. 

The first stage of the review focused on the structural reform of the Administrative Committee of NSW Labor (the governing body). The second stage (report forthcoming) will focus on compliance with electoral and donation laws, including fundraising activities and training provided to NSW Labor officials and candidates. 

The Lavarch review produced the 2019 interim report, titled Review into the NSW Labor Head Office, which made several recommendations for substantial reform of the structure and governance arrangements at NSW Labor’s head office. A key recommendation was to establish an audit and risk committee with a remit to advise a newly created state executive board on matters, including:

• preparing statutory accounts and annual financial statements 

• monitoring and reviewing the external audit process 

• reviewing the risk management framework of NSW Labor 

• recommending any internal audit of NSW Labor’s regulatory obligations under fundraising disclosure or other laws 

• monitoring compliance of all regulatory obligations and advising on continuous improvement of culture of compliance at head office 

• reporting directly to the NSWEC or any other appropriate regulatory authority, any suspected illegalities in NSW Labor’s compliance with regulatory and legal obligations that have not been acted upon by NSW Labor after identification by the committee.  

Notwithstanding the implementation of the Lavarch recommendations or those that may follow from the second stage of the review, the Commission’s recommendations set out below are intended to apply to all political parties in NSW. 

Recommendation 2 

That the NSW Government, in consultation with affected parties, initiates an amendment to the Electoral Funding Act 2018 so that payments from the Administration Fund are contingent on the achievement of acceptable standards of party governance and internal control. A working group should be established to determine the relevant governance and control standards, which could relate to:

• accounting for, receipting and banking donations 

• the organisation of fundraising events 

• identifying prohibited donors and donations that exceed statutory caps 

• the roles and responsibilities of staff, including volunteers 

• risk management and internal audit 

• whistleblowing and complaint-handling 

• management of gifts and conflicts of interest 

• compliance and ethical obligations of senior party officials. 

Given the different governance arrangements in different political parties, and as a matter of good practice, it is reasonable to assume that multiple political parties would be either members of, or invited to, represent their views to the working group. As the independent regulator, the NSWEC would ultimately determine if the parties had met the governance and control standards agreed on by the working group and adopted by government. The intention is for standards to be clearly agreed on, according to the points (and principles) set out in the Commission’s recommendation 3. The working group should also consider whether political parties should be able to request a review, before the NSW Civil and Administrative Tribunal, of the consequences of a decision taken by the NSWEC (for example, withholding administrative funding) as opposed to the decision itself. 

Recommendation 3

That the newly established working group should seek input from the NSWEC to ensure the efficient administration and implementation of standards. That is, consideration should be given to:

• applicable minimum standards 

• whether the standards should take the form of model rules, which an individual party would be free to modify only if the NSWEC agreed that the modified rule did not adversely affect the party’s governance. This would prevent small, or new, parties from incurring the expense of drafting rules from scratch 

 • the limits on the type of standards that could be required. That is, in order to avoid topics and areas that the state has no legitimate interest in regulating (for example, the way a political party formulates its policies) 

• the desirability, or extent to which, the standards take the form of specific rules, so as to meet the reasonable satisfaction of the NSWEC 

• the need for a proportionate approach that does not unreasonably penalise small, new political parties or independents 

• providing political parties with reasonable opportunities to address shortcomings in their governance and internal control frameworks before administration funding is withheld. 

Recommendation 4 

That the NSW Government amends the Electoral Funding Act 2018 to provide the NSWEC with the necessary powers to assess, audit and enforce non-compliance with standards of party governance and internal control. 

Recommendation 5 

That the NSW Government amends the Electoral Funding Act 2018 to require the NSWEC to publish findings regarding political parties’ adherence to established governance and controls standards. 

Penalties and compliance 

In its 2014 report, the Commission raised concerns about the lack of effective penalties and sanctions to act as an effective deterrent against non-compliance with disclosure obligations. That year, the NSW Government established a “Panel of Experts – Political Donations” in response to public concern over the influence of political donations on the integrity of government decisions. 

The panel recommended (among other matters):

• adopting a range of mid-level enforcement options available to the NSWEC, including the ability to withhold public funding entitlements from parties and candidates found in breach of the laws (recommendation 46) 

• increasing the maximum monetary penalty that can be imposed by the Local Court (recommendation 43) 

• simplifying the means by which the prosecution must prove knowledge, awareness or intent for offences in order to maximise the chances of successful prosecution (recommendation 45). 

The Electoral Funding Act 2018 now reflects new penalties for non-compliance with provisions relating to expenditure and donations. Recovery of up to double the value of unlawful donations and criminal prosecution for offences are two non-mutually exclusive enforcement actions available to the NSWEC. Enforcement actions are taken in accordance with the NSWEC’s Compliance and Enforcement Policy. With regard to questions of further policy and law reform arising from issues exposed in its investigation, the Commission focused principally on measures to ensure a higher level of self-regulation and compliance by political parties with the requirements of the statutory election funding, expenditure and disclosure regime. 

In particular, the Commission considered whether the legislative provisions surrounding the duty to report contraventions of the Electoral Funding Act 2018 be modified so that a senior party officer is required to report any reasonable suspicion of a contravention. 

Failure of duty to report offence 

Under s 100(1) of the Electoral Funding Act 2018, “Senior Office Holders” of a registered party are guilty of an offence if they fail to report to the NSWEC any conduct in connection with the party that the office holder knows or reasonably believes constitutes a contravention of the Act without reasonable excuse. The offence carries a maximum penalty of 50 penalty units ($5,500). Section 100(1) of the Act is a new offence that did not exist in the EFED Act and was not in force when the events under investigation took place. Section 100(2) of the Electoral Funding Act 2018 states that a reasonable excuse may be if the person knows or reasonably believes a report about the conduct has already been made to the NSWEC. 

There are challenges, however, in being able to prove what a senior office holder should reasonably understand about the lawfulness of the specific conduct. Notably, the Electoral Funding Bill 2018 included a “duty of care and diligence” and a “duty of good faith” provision, which were ultimately not included in the Electoral Funding Act 2018. The intent of the care, diligence and good faith provisions, however, may be approximate to the general intent of a “reasonably suspected” obligation. 

Recommendation 6 

That the NSW Government, in consultation with the NSWEC, gives consideration to: a) amending s 100(1) of the Electoral Funding Act 2018 to require senior office holders of political parties to report reasonably suspected contraventions of the Act b) increasing penalties associated with the offence under s 100(1) of the Electoral Funding Act 2018 to bring it into line with the penalties set out in sections 141 to 146 of the Act. 

Public statements about NSWEC compliance activities 

The NSWEC is not presently authorised to inform the public of the outcome or conclusion of an investigation, nor to publish identifying information about any investigation. 

In the current investigation, the Commission’s power to hold a public inquiry was critical to obtaining truthful evidence from witnesses. The Commission’s public inquiry exposed the false information given by putative donors and persons of interest to the NSWEC during its investigation of the matter. Additionally, once the NSWEC then referred the matter (as per s13A of the ICAC Act) to the Commission, some witnesses provided evidence in compulsory examinations that the Commission has now found to be false (as set out, for example, in chapters 9, 11, 20, 22 and 23 of this report). 

Given the value of public exposure in this investigation and the more general positive effects of transparency, the Commission considers it necessary for the powers of the NSWEC to be enhanced to authorise it to make public statements about its compliance activities. Subject to ensuring that political parties are afforded procedural fairness, the power to make public statements may create an additional deterrent to persons who might contemplate submitting false information to the NSWEC. 

The NSWEC would require the authority to name political participants as part of any new power to undertake periodic reporting of the outcomes of its regulatory functions. As noted above, the NSWEC is not presently authorised to do this. 

The Commission notes, however, that there may be a public interest in limiting any new reporting power of the NSWEC in the immediate lead up to an election so as to avoid suggestions that the timing of a report inappropriately impacted an election result. 

Recommendation 7 

That the NSW Government amends the Electoral Funding Act 2018 to give the NSWEC power to publish the results of its compliance audits, investigations and regulatory actions. 

Patent contestations and a blockbuster drug

'(De-)assetizing pharmaceutical patents: Patent contestations behind a blockbuster drug' by Théo Bourgeron & Susi Geiger in (2022) 51(1) Economy and Society 23-45 comments

Recent debates in public health and social sciences have shown how biofinancialization has been fuelled by patents’ transformation into ‘patent-as-assets’. This paper traces the historical construction of one such patent-as-asset bundle: the multi-billion worth architecture of patents behind the hepatitis C blockbuster drug sofosbuvir. Following this process from the late 1980s to present times, we highlight the ontological entanglements of pharmaceutical patents and the scientific, legal, commercial and political contestations that result from the focal firms’ assetization projects. By shining a light on these entanglements, our paper points to the extraordinary historical conditions required for the assetization of drug patents as well as to their vulnerability to contestations. In particular, we highlight new forms of patent activism that threaten the ‘asset condition’ of high-priced pharmaceuticals. 

The authors state

 ‘The philosophy is very simple. Good drugs save lives and a major side effect is they can also make you rich’. This statement was made by Dr Raymond Schinazi, one of the main scientists involved in the invention of the hepatitis C cure sofosbuvir and the owner of a company that held a string of crucial patents over the forthcoming drug, just after selling his company Pharmasset to Gilead Sciences for US$11 billion in 2011. This quote signals how pharmaceutical patents – initially designed to encourage inventors to disseminate their findings without fear of intellectual theft – have been increasingly turned into assets, allowing their holders to extract large quantities of wealth from them. However, this assetization dynamic is by no means an unavoidable or uncontested process. Following the history of the patents behind sofosbuvir, in this paper we highlight the socio-material resistances to the assetization of patents, demonstrating how this process involves numerous scientific, legal, commercial and political disputes. We outline how powerful pharmaceutical actors were able to appropriate an intricate patent architecture around sofosbuvir – and through this bundling stabilize a value regime that allowed them to turn the patents into assets. However, this assetization process has remained vulnerable to contestation by other actors including scientists involved in the invention, pharmaceutical competitors, and access to medicines activists. We demonstrate that the transformation of the patents underlying sofosbuvir into profitable assets passed through several phases between 1987 and 2020 that each entailed different forms of contestations. In the most recent period, these are mainly driven by civil society and are building a potential counterweight to the current ‘assetized’ pharmaceutical business model. 

We build our conceptual argument on debates regarding biopharmaceutical assetization. Birch and Muniesa (2020) have recently called for detailed empirical investigations on how things are turned into assets, which they see as the conversion of scientific knowledge, legal and other practices into ‘identifiable and alienable property’ that ‘can be owned … and capitalized as a revenue stream’ (p. 14). Considering how patents are constructed, bundled and held together as assets helps to understand important facets of contemporary biopharmaceutical capitalism, particularly the value extraction mechanisms in the sector where the (bundled) patent-as-asset is the crucial cog in the appropriation of pharmaceutical value by ‘technoscientific rentiers’ (Birch, 2020). A move from the focus of earlier biocapital literature (for instance Sunder Rajan, 2006; Waldby, 2002) toward an examination of patents-as-assets thus allows to explain how the ‘living things’ that biopharmaceutical firms commodify are turned into future-oriented sources of rent through the construction of specific valuation and accumulation regimes (Geiger & Gross, 2021). In particular, we highlight the construction and management of patent architectures as a vital lever in the profit-seeking activities of biopharmaceutical firms. 

Tracing the multiple pre- and post-market patent oppositions threatening its ‘asset form’ through the case of sofosbuvir reminds us that patents-as-assets are never fully disentangled from their multiple positionalities in legal, scientific and social practices. Emphasizing the conflictual dimensions of patents-as-assets both supports and complicates existing calls to view pharmaceutical knowledge as communal (Boyle, 2003). In reality, as we will show, there is no straight line from open to enclosed knowledge (see also Kang, 2020). At the same time, a focus on the instability of patents-as-assets highlights the fact that the making of pharmaceutical assets and the many contestations they provoke open up to civil society new forms of activism against the financialized biopharmaceutical business model (Geiger & Gross, 2018; Parthasarathy, 2017). The story of sofosbuvir’s patent contestations also includes a broader historical interest, as they contributed to major shifts in the biopharmaceutical political economy. This included the 1996 legal decision favourable to Emory University, which accentuated the rift between international and US patent law, an 18-month US Senate Committee on Finance Investigation into sofosbuvir’s price and its impact on the US healthcare system, the activist oppositions against the sofosbuvir patents in 2015 and 2017, the first of their kind in high-income countries, and the advent of European state activism against pharmaceutical pricing strategies, culminating in the 2019 World Health Assembly Transparency Resolution. The contestations around this high-profile drug continue to reverberate in the political economy of pharmaceuticals, including in the fight for widespread access to COVID-19 technologies and vaccinations by access to medicines movements. Acknowledging patents’ multiple origins and trajectories strengthens calls to infuse a public utility character into the industry, which have grown louder during the COVID-19 pandemic, and which may serve to reintroduce an explicitly moral economy that acknowledges the collective nature of the knowledge underlying an invention and a duty to make it useful to the public (Gaudillière, 2008). By putting its emphasis on the contested dimensions of assetization, this paper thus ultimately points to its potential reversibility.

Graffiti

'Ideological Vandalism of Public Statues: Copyright, The Moral Right of Integrity and Racial Justice' by Marie Hadley, Nikolas Orr and Sarah Hook in (2022) 9(2) Griffith Journal of Law & Human Dignity comments 

This paper considers the regulation of ideological vandalism by the Australian copyright and moral rights regimes in the context of the defacement of public art statues that occurred in Australia and overseas during the Black Lives Matter protests in 2020. Statue vandalism is approached as a form of anti-racist or anti-colonial iconoclasm that contributes to discourse around previous and continuing racial inequities. Law is approached as a form of symbolic action that can consolidate the alienation and othering of vulnerable groups in public spaces. The authors investigate whether, when public statues are within the copyright term, intellectual property rights symbolically devalue anti-racist discourse by de-prioritising agonistic art encounters. It is identified that copyright’s exclusive rights do not render direct physical interventions with the statue unlawful, but that the moral right of integrity held by the statue’s creator is problematic. The moral right of integrity privileges the connection between the artist and their work as a matter of reputation, and any public interest in the graffitied counter-monument is irrelevant to a finding of infringement, which in our view justifies reform. The paper concludes that public spaces should be democratic spaces, and that intellectual property law in post-colonial states and states with a history of racial injustice should do more in support of this goal.