Global Regulatory Collaboration Is Essential In The Digital Era

Although Digital Technologies Have Brought Extraordinary Benefits To The Global Economy, The Policy, Regulatory.

By Bob Fay

The COVID-19 pandemic has revealed the extent of human reliance on digital technologies to deliver many of the necessities of daily life. Platforms such as Google, Facebook, Twitter and Amazon and messaging apps such as WeChat and Whatsapp span the globe, serve billions of users, and now provide core societal functions often analogised to public utilities. But the governance around their functions is ad hoc, incomplete and insufficient.

Their operations are global in scope, yet regulation — of what little exists — is domestic in nature and typically inadequate. Currently, big data, artificial intelligence (AI) and platform governance frameworks are a patchwork of rules and regulations with gaping holes. This situation has led to de facto rules being set by platforms and by some jurisdictions that spill over globally without any dialogue on their suitability and/or the broader implications for society.

Although Digital Technologies Have Brought Extraordinary Benefits To The Global Economy, The Policy, Regulatory and legal architecture needed to effectively govern them is far from keeping pace, leading initially to unforeseen risks and harms, and now to a situation where those harms are increasingly evident and widespread. An updated and comprehensive architecture is, therefore, urgently needed, especially as the world splinters in data realms.

This situation has led to de facto rules being set by platforms and by some jurisdictions that spill over globally without any dialogue on their suitability and/or the broader implications for society.

The US sphere is focused on the private sector and its de facto national champions, such as Facebook and Google. The US enshrines in its trade agreements open data flows (no localisation except in limited circumstances) that direct data back to American firms, which further re-enforces their market power and economies of scale and scope. It also includes safe harbour provisions for the content of its social media platforms, making it exceedingly difficult to regulate content. And the US generally lets the platforms set their own terms, conditions and enforcement.

The EU realm does not have national champions and instead focusses on strategic regulations to rein in the market power of platforms and to promote individual rights through its General Data Protection Regulation (GDPR). It is focused on the privacy of personal data and has created an extensive legal framework for its protection. Any company that operates and uses EU personal data must abide by the GDPR or have an equivalent framework in place as assessed by the EU.

China and its great firewall form another zone with full data localisation and a massive database of its citizens that can be used to create national champions. This is broadly consistent with China’s determination to move up the value-added chain. Its great firewall also has great failings, which it seeks to overcome by acquiring data via its Belt and Road Initiative and other means. China is also determined to become a leading standard-setter that allows it to imbed its technology and disseminate its values globally.

Not surprisingly, against this divisive background, there are complicated issues that impede progress on achieving global governance that is inclusive of all regions and not just the data realms:

  • Large digital platforms have dominant market positions due to economies scale and scope and a first mover advantage. Challenging those positions is extremely difficult, especially given the lack of voice outside the data realms, leading to a sense of technological determinism, especially given the complex nature and quick moving pace of digital technologies. Furthermore, there are complicated interactions around digital policy. Governments tend to make decisions vertically, but digital technologies create horizontal issues making progress on national, let alone international, digital governance difficult.
  • There are many different governance initiatives underway, but there is no coordinating mechanism to bring them together. Thus, there is also no comprehensive and coherent assessment of risks, vulnerabilities and outcomes of digital business models that could help to inform governance.

Despite the recognised need for greater global collaboration, there has been little substantive progress on how to do so. One way to move forward is to draw inspiration from the Financial Stability Board that was set up to reign in and re-regulate global banks and insurers following the light touch regulation and regulatory lapses that led to the 2018 financial crisis. In a similar manner, the large digital players can be regulated via the creation of a Digital Stability Board (DSB) to deal with the complex global policy issues arising from digital technologies.

The DSB will have mandates to:

  • Coordinate the development of standards, regulations and policies across the many realms that platforms touch. The areas will include, but not be limited to, governance along the data and AI value chain (including areas such as privacy, ethics, data quality and portability, and algorithmic accountability); social media content; competition policy; and electoral integrity. The objective of coordination will be to develop a set of principles and standards that can be applied globally while allowing for domestic variation to reflect national values and customs.
  • Monitor development, advise on best practices, and consider regulatory and policy actions needed to address vulnerabilities in a timely manner.
  • Assess vulnerabilities arising from these technologies, including their impact on civil society and the regulatory and policy actions needed to address them on a timely basis.
  • Ensure that this work feeds into other organisations, such as the World Trade Organisation, which needs to modernise trade rules to reflect big data and AI, but also to develop a framework with which to assess the implications for trade and trade rule compliance.

Importantly, it will be multi-stakeholder driven to ensure that civil society and developing countries are represented in the discussions.

Countries, wherever they are located, want to assert more control over how their data — personal, corporate and government — is used. This is a clear opportunity for developing and developed countries to work together. Interest in doing so can be seen with the International Grand Committee, which has a diverse country membership, and the recently created Global Partnership on AI, of which Canada and India are founding members.

Nevertheless, it will be a challenging road ahead to achieve global governance and it will require substantial political will. India can play a leading role. As India looks forward to its G20 presidency, it can lead the important and necessary discussions for inclusive global digital governance and bridge the divide across data realms, and across developing and developed countries.

This news was originally published at Orf Online.

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