Joi's Diary

Back to Contents of Issue: December 1999

Don't Believe the Lawmakers When They Sat That Law Can Protect Your Privacy

by Joichi Ito

Joichi Ito is the founder and CEO of Neoteny (, an IT investment and operating company. He has created numerous Internet companies, including PSINet Japan, Digital Garage, and Infoseek Japan. In 2000, he was ranked among the "50 Stars of Asia" by Business Week and commemorated by the MPT for supporting the advancement of IT.

Last month, I wrote about the unauthorized access bill drafted by the National Police Agency that would finally make breaking into computers illegal in Japan. Since then, I've had further discussions with the police and with Mr. Yamaguchi, the director of JPCERT. To add to what I said last month, the bill is very much a "better than nothing" fix, but it isn't written in a very robust way. It gets things going, but still falls short. Remember that Japanese law is not built on a tradition of practical adaptations under common law. Instead, it's a highly complex interlocking edifice, and all the pieces have to fit precisely together. For instance, it is not illegal for someone to accidentally see something written on a piece of paper, and taking someone's bike for a ride and returning it is not "theft" under Japanese law, although someone could claim that some economic value was stolen during the joy ride. So in order to maintain this logic, it is difficult to make stealing information a crime, since the original information is left intact-the law interprets this as similar to looking at someone's notebook. Obvi-ously, digital information is not the same as physical objects, and accidentally looking at a notebook is different from an attack on a computer system, but the Ministry of Justice hates exceptions, and it looks like they will have to make a few in order to deal with computer crime.

In the meantime, banks have decided that they don't want to take any risk. If you look at any Internet banking agreement, you'll find that the bank places all the risk of theft of funds through computer networks on the customer. Debit cards in Japan do not have insurance either. If someone steals your debit card number and creates a forgery, they can steal money from your account and it is your tough luck.

On the 18th of September, Austin Hill from Zero Knowledge Systems dropped by on his way back from the privacy conference in Hong Kong. He told me that one of the major issues discussed at the conference was personal location information. Mobile phone networks in the U.S. are required by law to be able to provide location information to the police. Mobile phone operators in Japan are also working on how this information can be used for marketing. I can see many reasons why a customer would want to be able to use his or her location information for navigation and searching for information, but I hope everyone sees the risks of having location information available to a central authority. Imagine if someone kept a log of where your cell phone has been. You might start receiving annoying ads based on where you hang out - or think how easy a kidnapper's job would be if he knew your travel patterns. Don't believe the lawmakers when they say that law can protect your privacy. NTT employees have been caught illegally selling personal customer information before. Now that they can sell your location information, it's necessary to make it technically impossible for a bad employee to do this. So how does Zero Knowledge Systems help? It's a service that allows you to create e-mail accounts without giving out your identity. The ZKS system also uses strong crypto so that eavesdroppers can't read your e-mail. It will be interesting to see how this service will affect Japan's wiretap bill.

Recently, I have been thinking about community and services on the Internet that support communities. It appears no one has really found the perfect business model. When I say communities, I don't mean message boards on portal sites. I mean deep communities, like The Well. In Japan, although the Ministry of Finance wouldn't agree to provide basic tax exemptions as in almost all other countries, a basic nonprofit organization law has been enacted. I am interested in the notion that users of a Net-based service can set up an NPO and start or acquire a service that meets their needs, cutting out speculators, advertisers, and other middlemen unnecessary to a community that knows what it wants and can manage itself. It is likely that online communities can form around consumer activism or collaboration. The Linux community and its ability to produce software and coordinate members without a capitalist governance model is a good example. I had the opportunity to meet Linus Torvalds through a videoconference last month and his true lack of interest in money and his focus on fun really drove it home for me.

Although there are various models of co-ops and other groups coming together for financial gain, I think that visionary and mission-driven communities empowered by the Net may be the next big thing. Several people have approached me this month asking me to help them find a job that has purpose and vision. Many people seem to be interested in vision over gain, and I think the recent attention on growth, exits, markets, and gain may be stifling the need for visionary projects to "do good" rather than to "make money." Considering the exposure to NASDAQ risk that I already have, I'm going to hedge my bets and work on sustainable community projects. Together with my sister Mimi and my brother-in-law Scott Fisher, I've started a foundation in memory of my mother, called the Momoko Ito Foundation. It will focus on projects supporting the bicultural community here.

I had a chance to go drinking with the Bit Valley folks. We often get written up together by the press because of our physical proximity, but in fact I have had very little contact with Bit Valley until recently. I found it refreshing to spend time with so many energetic young people. I was also really pleased to find that we had very similar beliefs. Although we are all interested in setting up ventures and making money, we are also very interested in vision and doing the right thing. Many of the Bit Valley entrepreneurs were even more adamant about these post-capitalist ideas than I am. I don't see many of the Bit Valley types getting too excited about zaibatsu keiei (running a corporate conglomerate) any time soon. But it does appear that some of the zaibatsu types are very interested in Bit Valley-Hikari Tsushin has set up a "Hit Valley" center. On the other hand, this month, Digital Garage just launched a completely commercial site called WebNation, selling CDs and DVDs over the Net. "Click, Get, Smile!" and sell, sell, sell!



References Zero Knowledge Systems:
For more on communities, see Howard Rheingold, at

Bicultural community support: context/npobuy.html.

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