Digital

A digital tax would hurt consumers

The EU has long considered levying a tax of between two and six percent on the local revenues of platform giants. The prospect of trade talks with the US has brought this topic back into the spotlight. However, an EU-wide digital tax would limit potential …

As it stands right now, the European Commission is considering three options for a digital services tax. One would consist in a corporate income tax top-up on all companies with digital activities in the European Union, the other a tax on revenues from certain digital activities in the EU. A last option would be a tax on business-to-business digital transactions in the EU. The reasoning in favour of a DST (digital services tax) are two-fold: on one hand, and stemming from French political pressure, the DST is considered to be socially fair. Digital companies prefer tax-optimised HQ locations, which means that those nations with larger corporate tax levies lose out on revenue from digital transactions. This would be changed through a tax that does not consider the location of the firm, but the location of the transaction. On the other hand, the EU has just created the largest budget in the history of the union, and has taken up a loan of €750 billion. It isn’t entirely clear how this money will be paid back until 2058, but a digital tax seems to be among the existing proposals.

A DST is rejectable for many reasons. We don’t know at this point how such a tax would make market actors react. When GDPR was introduced, we saw a large amount of media operators seize their activities in the EU, because they were unsure how to deal with new privacy rules. This goes beyond a rule, and will affect the balance sheets of companies. Adding to that, the thresholds are very important. Low tax thresholds would affect small European start-ups, which could then also revert to only offering their services in low-tax countries.

Innovators should be able to choose between high-taxed and low-taxed locations, not be faced with a uniform unavoidable tax. Complicated issues – such as the EU’s digital lag – require complex solutions according to officials, but that’s not the case. Less intervention means more innovation. Antitrust lawsuits — a direction the EU has been more keen to take in the past years — are a great tool for tax collecting but they don’t solve the core problem. We need a digital market that has many different options to choose from, making it less likely that one company can gain a monopoly as it will be more preoccupied with actual competition, and thus seek to come up with innovative solutions for consumers.

The central justification given by the Commission for both proposals is that digital activities are not subject to traditional taxation. The intellectual property of the companies concerned is often located outside the EU, where most of the added value is created. The income of these companies is generally not taxed in the EU, but this certainly does not mean that the firms aren’t taxed at all, especially since the US has adopted a global minimum tax. It is therefore not the virtuous ideal that “these companies must pay their taxes”, but rather that these companies must pay their taxes to the EU. The difference for an international organisation that has just lost a major contributing member (the United Kingdom) is therefore more a question of revenue than a principle of social justice.

This bargaining tactic could drive up one bill, and that is the one of the European consumer. Very often, increases in company expenditure in indirect taxes, which this would inevitably imply, would raise prices for consumers around the continent. VAT has long been recognised as the tax which hits poor people the hardest, yet many EU countries now prefer to introduce higher levels of indirect taxation. Just at a time when especially low-income earners can have simpler access to many products because of the internet, it seems cruel to restrict their purchasing power, particularly in the midst of a pandemic that sees many EU citizens compelled to use digital solutions. If we care about those with low wages, we need a more competitive marketplace in which companies are in a price race, not a race to optimise astronomical tax burdens.

The future of Europe’s market economy undeniably lies in the digital sector. The idea of attempting to massively tax online businesses is not a promising objective, neither for the states nor their consumers. It belongs in the dustbin of creative political EU integration.

Originally published here.

We don’t need content quotas

Streaming platforms and consumers should make their own decisions…

A number of countries and regions are already applying entertainment content quotas. This means that a certain percentage of audiovisual content on broadcasting channels needs to be local. This rule already exists in France, for radio broadcasters.

For private radio stations, there are rules on the broadcasting of French-language songs. It states that: “the substantial proportion of musical works in French or interpreted in a regional language used in France must reach a minimum of 40% of French songs, at least half of which must come from new talent or new productions, broadcast during significant listening hours by each of the radio broadcasting services authorised by the Conseil supérieur de l’audiovisuel, for the part of its programmes composed of variety music. ” 

Since July 2016, the law has been supplemented by new provisions:

Firstly, the addition of a third ad hoc derogatory regime for so-called “musical discovery” radio stations: at least 15% of new French-language productions or new French-language talent Secondly, the introduction of a malus aimed at excluding some of the broadcasts of the ten most scheduled French-language titles, those that account for more than 50% of total French-language broadcasts, from the calculation of compliance with the obligations to broadcast French-language songs. Lastly, the creation of a bonus allowing the overall quotas for French-language songs to be adjusted downwards by up to five points, subject to compliance with several cumulative conditions relating in particular to substantial and quantified commitments to promote diversity in music programming.

It really needs the French to make a radio station so downright bureaucratic, and its music awfully controlled. Like French music or not, I cannot for the life of me understand a system in which the government comes into your station and decides of which origin your audio-content needs to be. It isn’t just dystopian, it’s downright authoritarian.

Mexico is currently debating new rules that would require a national content quota of 15% (“content or video generated by an individual or corporation with a majority of funding of Mexican origin”). The fact that the EU also deals with an audiovisual content quota for local content is inspirational to other countries. Developed countries having a rule often allows legitimacy to nationalistic rules in other regions. The term “nationalistic” is carefully chosen here, because in essence the government is making broadcasters discriminate on purpose.

On what basis could anyone in the European Union argue that consuming European audiovisual content is in any way preferable to a movie from South Africa or a song from Malaysia? Is this the European equivalent of supporting cultural diversity, supporting audiovisual access for our expat communities, and assisting content creators in developing nations?

Yes, the United States indeed dominates the streaming markets with its films and its music. The question is whether we — or any other country for that matter — is right in believing that boosting our cultural sector happens if we force broadcasters to favour our content by law. The EU is the most significant consumer region on the planet; if anything, it should be easier for our content providers to satisfy the need for local music and films.

Celebrating our cultural diversity is not a bad thing. While it is great when local artists make it on the big screen, or land their hit in the charts, it is not a tragedy if they do not. Art is not a national possession, it is an internationally cherished part of our lives. Government ought not appropriate it.

Originally published here.

The fallacy of content quotas

I’ve become somewhat of a streaming junkie during this pandemic, following up on the criticism that my pop-culture knowledge is sub-optimal. Now subscribed to three services at once, I watch both popular movies and TV shows from the U.S. and niche local productions buried in the dark corners of Netflix. On these platforms, content curation is everything. The algorithm feeds me with matching shows and the search bar helps me identify titles most fitting for what I’m into.

Though I’m satisfied, some regulators are unhappy with the amount of local artistic content on these platforms. “In order to increase cultural diversity and promote European content, the new legislation proposes that 30% of content of TV channels and VOD platforms would have to be European,” said a European Parliament press release from 2018. But putting “Europe first” on Spotify and Netflix is problematic for a number of reasons.

On the one hand, legislators intervene with broadcasting companies’ freedom to pick their own content. At present,  they choose which content they deem most interesting and valuable for their customer base. It’s difficult to imagine that streaming services would find no value in making local content, given that they are competing with TV broadcasters who cater to this market. Added to that, calling these content quotas “supportive” of the cultural sector is a misnomer because it is unlikely actually to support local productions.

Take Netflix as a case study. American users have access to 100% of Netflix titles, which makes intuitive sense. However, through a mix of copyright rules that enable geo-blocking and content quotas, European Netflix subscribers get a rotten deal. Of all EU member states, Lithuania gets access to the largest share with 52% of titles. With only 11%, Portugal gets the worst experience for subscribers. The idea that content quotas will automatically boost local film production is utopian — it is just as likely that streaming services will reduce the overall available titles to match the quota without needing to spend additional funds.

Politically, the move is deeply un-European. These quotas – which also exist on national levels – have been introduced and reformed by mainstream political parties. Still, it’d hardly be controversial to claim that had Marine Le Pen suggested them, while having French flags in the background, we’d think very differently of this policy. It would be labelled nationalistic, and rightfully so.

For some reason, EU legislators escape this judgement because now it’s being executed on a continent-wide level. But on what basis could anyone in the European Union argue that consuming European audiovisual content is in any way preferable to a movie from South Africa or a song from Malaysia? Is this the European equivalent of supporting cultural diversity, supporting audiovisual access for our expat communities, and assisting content creators in developing nations?

Yes, the United States indeed dominates the streaming markets with its films and its music. The question is whether we — or any other country for that matter — is right in believing that boosting our cultural sector happens if we force broadcasters to favour our content by law. The EU is the most significant consumer region on the planet; if anything, it should be easier for our content providers to satisfy the need for local music and films.

Most of all, European legislation is all too often the domino that creates a chain reaction. Mexico is currently debating new rules that would require a national content quota of 15% (“content or video generated by an individual or corporation with a majority of funding of Mexican origin”). However, this initiative overlooks the fact mentioned above; that the EU is the largest consumer region in the world.

The synergies obtained from an economic bloc the size of the EU are not the same from an individual market. And even if the EU regulation allows the production from over 40 countries to be considered for the quota – the chain reaction amplifies the insidious effects of the legislation rather than promote the so-called cultural benefits. In the end, consumers will be left with less diversity of content as producers would reduce their catalogues only to comply with the regulation.

Content quotas reduce consumer streaming experience, they unfairly discriminate against foreign productions, and they do not achieve the goals they were set out to achieve. If we were empowered to rate public policies on an IMDb equivalent platform, this would get a 0.0/10.

Originally published here.

Facebook, Australia and the pitfalls of online regulation

“Facebook has re-friended Australia.” Those were the words of Australian Treasurer Josh Frydenberg to a gaggle of reporters in Canberra this week, in an ever-so-slightly smug declaration of victory in the regulatory battle between his government and the embattled social media giant.

His statement came after Facebook, having kicked up an almighty storm – and generated a great deal of bad press for itself in the process – eventually gave in and backed down from its sudden ban of all news content for Australian users. It followed Google’s example and entered into negotiations with Rupert Murdoch’s News Corp, among others, begrudgingly agreeing to pay to host their content on its platform, as mandated by the new Australian law.

This situation is profoundly troubling. The core of the dispute is the new law spelling out how tech giants like Facebook and Google, which host external news links on their platforms, must negotiate with the providers of that content.

Anybody can see that the idea of government-mandated negotiation doesn’t make much logical sense. If two consenting parties have a mutually-beneficial agreement where one facilitates the sharing of the other’s content, where is the role of the government to step in and demand that money changes hands?

It’s not clear what problem the Australian Government believes is being solved here. It has intervened in the market arbitrarily, making one side very happy and the other very miserable. But to what end? Worryingly, this appears to be just the latest front in a troubling new trend of governments arbitrarily meddling in an industry where innovation and productivity are booming. Sadly, governments are often inclined to do this.

California, for instance, recently won the right in court to implement its harsh net neutrality rules, the first state to come close to replicating the ill-fated far-reaching Obama-era law. Meanwhile, the European Union has declared its intention to keep tabs on big tech with a raft of new policy ideas, including annual check-ins with the European Commission about what steps companies are taking to “tackle illegal and harmful content”.

There is no easy answer to the question of how we should go about regulating the online market. The UK Government is at something of a crossroads in this area. It is currently consulting on the parameters of its new Digital Markets Unit (DMU) with the existing Competition and Markets Authority (CMA).

When considering the role of the DMU, the British Government would do well to learn from the mistakes of others from around the world and seek to prioritise the interests of consumers, rather than coming down rigidly on one side of the fence and cowing to the demands of one enormous lobbying operation or another, as the Australian Government appears to have done.

The DMU, in the words of its architects and proponents, will be “a pro-competition regime”, which will mean that “consumers will be given more choice and control over how their data is used and small businesses will be able to better promote their products online”. Those stated aims – making life easier for users and paving the way for the Steve Jobs of tomorrow – seem wholly positive.

But the Government briefing also says that the DMU will implement “a new statutory code of conduct” in order to “help rebalance the relationship between publishers and online platforms”. It is too early to say whether our Government is planning to go down the same road as Australia’s, but that rhetoric sounds ominous, to say the least.

There is certainly a vacancy for the DMU to fill, but the underdog it should be propping up is not Rupert Murdoch. There is a difficult balance to be struck between maintaining an environment where the existing tech giants are able to continue innovating and elevating our standard of living, while also fostering a truly competitive environment by removing obstacles for their smaller – but growing – competitors, along with new start-ups. That is the fine line the Government must tread.

Originally published here.

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Dowden’s latest task? Regulating the internet. Here’s what Australia can teach us about that challenge.

Culture secretary Oliver Dowden finds himself burdened with an almighty task: regulating the internet. His new ‘Digital Markets Unit’, set to form part of the existing Competitions and Markets Authority, will be the quango in charge of regulating the social media giants. Dowden, like the rest of us, is now trying to discern what can be learned by rummaging through the rubble left behind by the regulatory punch-up between Facebook and the Australian government over a new law forcing online platforms to pay news companies in order to host links to their content.

Google acquiesced immediately, agreeing to government-mandated negotiations with news producers. But Facebook looked ready to put up a fight, following through on its threat to axe all news content from its Australian services. It wasn’t long, though, before Mark Zuckerberg backed down, unblocked the Facebook pages of Australian newspapers and, through gritted teeth, agreed to set up a direct debit to Rupert Murdoch.

The drama down under has been met with a mixed response around the world, but it is broadly consistent with the trend of governments shifting towards more and more harmful and intrusive interference in the technology sector, directly undermining consumers’ interests and lining Murdoch’s pockets. The EU, for one, is keen to get stuck in, disregarding the status quo and unveiling its ambitious plan to keep tabs on the tech giants.

In the US, the situation is rather different. Some conspiracy theorists – the type who continue to believe that Donald Trump is the rightful president of the United States – like to allege that the infamous Section 230, the item of US legislation which effectively regulates social media there, was crafted in cahoots with big tech lobbyists as a favour to bigwigs at Facebook, Google, Twitter, and so on. In reality, Section 230 was passed as part of the Communications Decency Act in 1996, long before any of those companies existed.

Wildly overhyped by many as a grand DC-Silicon Valley conspiracy to shut down the right’s online presence, Section 230 is actually very short and very simple. It is, in fact, just 26 words long: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Not only is this a good starting point from which to go about regulating the internet – it is the only workable starting point. If the opposite were true – if platforms were treated as publishers and held liable for the content posted by their users – competition would suffer immensely. Incumbent giants like Facebook would have no problem employing a small army of content moderators to insulate themselves, solidifying their position at the top of the food chain. Meanwhile, smaller companies – the Zuckerbergs of tomorrow – would be unable to keep up, resulting in a grinding halt to innovation and competition.

Another unintended consequence – a clear theme when it comes to undue government meddling in complex matters – would be that vibrant online spaces would quickly become unusable as companies scramble to moderate platforms to within an inch of their lives in order to inoculate themselves against legal peril.

Even with the protections currently in place, it is plain how awful platforms are at moderating content. There are thousands of examples of well-intentioned moderation gone wrong. In January, the Entrepreneurs Network’s Sam Dumitriu found himself plonked in Twitter jail for a tweet containing the words “vaccine” and “microchip” in an attempt to call out a NIMBY’s faulty logic. Abandoning the fundamental Section 230 provision would only make this problem much, much worse by forcing platforms to moderate much more aggressively than they already do.

Centralisation of policy in this area fails consistently whether it comes from governments or the private sector because it is necessarily arbitrary and prone to human error. When Facebook tried to block Australian news outlets, it also accidentally barred the UK-based output of Sky News and the Telegraph, both of which have Australian namesakes. State-sanctioned centralisation of policy, though, is all the more dangerous, especially now that governments seem content to tear up the rulebook and run riot over the norms of the industry almost at random, resulting in interventions which are both ineffectual and harmful.

The Australian intervention in the market is so arbitrary that it could easily have been the other way around: forcing News Corp to pay Facebook for the privilege of having its content shared freely by people all over the world. Perhaps the policy would even make more sense that way round. If someone was offering news outlets a promotional package with a reach comparable to Facebook’s usership, the value of that package on the ad market would be enormous.

Making people pay to have their links shared makes no sense at all. Never in the history of the internet has anybody had to pay to share a link. In fact, the way the internet works is precisely the opposite: individuals and companies regularly fork out large sums of money in order to put their links on more people’s screens.

If you’d said to a newspaper editor twenty years ago that they would soon have free access to virtual networks where worldwide promotion of their content would be powered by organic sharing, they would have leapt for joy. A regulator coming along and decreeing that the provider of that free service now owes money to the newspaper editor is patently ludicrous.

That is not to say, however, that there is no role for a regulator to play. But whether or not the Digital Markets Unit will manage to avoid the minefield of over-regulation remains to be seen. As things stand, there is a very real danger that we might slip down that road. Matt Hancock enthusiastically endorsed the Australian government’s approach, and Oliver Dowden has reportedly been chatting with his counterparts down under about this topic.

The humdrum of discourse over this policy area was already growing, but the Australia-Facebook debacle has ignited it. The stars have aligned such that 2021 is the long-awaited point when the world’s governments finally attempt to reckon with the tech behemoths. From the US to Brussels, from Australia to the Baltics, the amount of attention being paid to this issue is booming.

As UK government policy begins to take shape, expect to see fronts forming between different factions within the Conservative Party on this issue. When it comes to material consequences in Britain, it is not yet clear what all this will mean. The Digital Markets Unit could yet be a hero or a villain.

Originally published here.

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Knee-jerk reactions are no way to regulate big tech

Regulation enthusiasts around the world have set their sights on big tech.

In the UK, the outlet for this newfound appetite to rein in Silicon Valley is a brand new quango called the Digital Markets Unit [DMU], set to form part of the existing Competition and Markets Authority [CMA]. Specifics about the DMU’s remit are hard to come by, but the Government says it intends to foster a ‘pro-competition regime’ as it adapts the regulatory landscape to the challenges of big tech.

Oliver Dowden, the Secretary of State for Culture, Media and Sport and the minister holding the levers of power behind the DMU, is keeping his cards close to his chest. His stance remains murky, for instance, on the recent regulatory punch-up between Facebook and the Australian government. State powers down under emerged victorious after Mark Zuckerberg agreed to fork out new fees in order to host news links on Facebook.

Dowden has reportedly been chatting to his Australian counterparts – and has sent cryptic messages to the t-shirt-wearing gurus across the Atlantic (and Nick Clegg) – but has yet to come down on either side of the fence or offer any substantial hints about whether or not Britain might follow in Australia’s footsteps.

Others in Westminster appear much keener on an agenda of active hostility towards the American tech giants. Matt Hancock has already said he wants to see the UK mimic Australia’s hamstringing of social media companies by forcing them to pay news producers, calling himself a ‘great admirer’ of countries which have done so successfully.

Meanwhile, Rishi Sunak is already planning his next move. In the manner of Sacha Baron Cohen’s Dictator in a 100-metre sprint firing a gun at runners as they pull out ahead, Sunak has set his sights on the uber-successful technology industry, and wants to slow that success down by taxing it.

Not only does Sunak want to penalise tech giants for their successful business models with a new tax, he is also planning to use this year’s G7 summit in sandy Cornwall to lobby his international counterparts to do the same, with US treasury secretary Janet Yellen first in line to hear his pitch, which has the support of the Prime Minister. Companies like Amazon are already taxed for their digital services in the UK, but the chancellor views the current system as a stopgap until a global tech tax can be implemented.

This dramatic influx of punitive policies is set to do much more harm than good. Some new regulation may well be needed in this area – but there is an urgent danger that the Government will hurriedly execute a raft of headline-hungry policies which will do immeasurable damage in the longer term.

Poorly thought-out attempts to ‘level the playing field’ between old and new forms of commerce is not the area where post-Brexit Britain should be chasing a world-leading status. Instead, let’s set an example for what a modern, free economy which regulates big tech without being hostile towards it can look like. It’s not too late to keep the Digital Markets Unit’s in-house red tape production line from getting out of hand.

Originally published here.

The impending war with big tech

The last few weeks have seen a substantial ramping up of rhetoric from Westminster towards big tech. Facebook’s dramatic show of power against – and subsequent capitulation to – the Australian government over its new law obliging it to pay news outlets to host their content made for gripping viewing, and it has since become clear that senior ministers across the British government were tuning in to the action.

Matt Hancock came bursting out of the blocks to declare himself a ‘great admirer’ of countries which have proposed laws forcing tech giants to pay for journalism. Rishi Sunak has been bigging-up this year’s G7 summit, which will be held in Cornwall. From the way he is talking, it sounds like he is preparing to lead an army of finance ministers from around the world into battle with Silicon Valley.

Meanwhile, Oliver Dowden, the cabinet minister with responsibility for media and technology, indicated that he has been chatting to his Australian counterparts to learn more about the thinking behind their policymaking process. He followed that up with a series of stark and very public warnings to the businesses themselves,promising to “keep a close eye” on Facebook and Twitter, voicing his “grave concern” over the way big tech companies are operating and threatening sanctions if they step out of line.

This one-way war of words comes against the backdrop of a menacing new regulatory body slowly looming into view. The Digital Markets Unit, a quango which is set to form part of the existing Competition and Markets Authority (CMA), will be the chief weapon in the government’s armoury. As things stand, we know very little about what it is intended to achieve.

Big tech in its current form is a young industry, still struggling with teething problems as it learns how to handle owning all the information in the world. There are plenty of areas where Facebook, Google, Amazon and countless others are arguably falling short in their practices, from users’ privacy to threats to journalists, which Dowden and others have picked up on.

But the natural instinct of state actors to step in has the potential to be cataclysmically damaging. The government is running out of patience with the free market and seems poised to intervene. Countless times, haphazard central policy has quashed innovation and sent private money tumbling out of the country. Against the backdrop of the forthcoming corporation tax rise, there is a fine balance to strike between effective regulation and excessive state interference.

The nature of government interventions is that they block innovation, and therefore progress. Superfluous regulation is like a dazed donkey milling about in the middle of the road, bringing the traffic to a halt. Of course, the donkey is then given a charity collection bucket and the power to oblige passers-by to contribute a slice of their income for the privilege of driving society forwards, generating unfathomable wealth and providing us all with access to free services which have improved our quality of life beyond measure.

As the government ponders the appropriate parameters of the new Digital Markets Unit and seeks to place arbitrary limits on what big tech companies can do for the first time in the history of their existence, it should consider users’ interests first. There is a strong case to be made for shoring up the rights of individuals and cracking down more harshly on abuse and other worrying trends. But let’s not fall into the same trap as our cousins Down Under in making online services more expensive to use and passing those costs down to consumers.

As the much-fabled ‘post-Brexit Global Britain’ begins to take shape, we have a valuable opportunity to set an example for the rest of the world on how to go about regulating the technology giants. The standards we will have to meet to do that are not terribly high. In essence, all the government needs to do is avoid the vast, swinging, ham-fisted meddling which has so often characterised attempts at regulation in the past and Britain can become something of a world leader in this field.

Originally published here.

Will new EU digital regulations lead us to innovation or stagnation?

A recent event organised by the Consumer Choice Center looked at the role the Digital Services and Markets Acts will play in shaping Europe’s digital innovation future.

In December 2020, the European Commission presented the Digital Services Act (DSA) and Digital Markets Act (DMA). Both are aimed at regulating digital platforms, however, it remains unclear whether they will succeed in boosting innovation in the EU and ensuring fair rules of the game for all participants.

In particular, the DMA puts in place a series of ex-ante restrictions telling tech platforms how to behave and introduces a new “competition tool”. Although noble in its intentions, the worry is that the Act might fail to strike a balance between the need to incentivise European SMEs to innovate while preserving our freedom to choose services delivered by so-called “Big Tech” without excessive burdens.

On 3 March, the Consumer Choice Center hosted a high-level debate on the future of digital innovation in Europe and the role the said acts will play in shaping it. Below are some of the main points raised by our panellists.

“We need to ensure that the DMA doesn’t turn into an anti-American notion. The DMA must not be a protectionist tool used against companies from certain countries, and this is something I will keep an eye on as we move forward with the digital market reform. Digital innovation requires us to stay open, and this is only possible if we cooperate internationally, especially with our democratic partners such as the US. Small players will benefit from this too. However, safeguarding fair competition is pivotal, and that has to be at the centre of our DMA efforts,” said Svenja Hahn, a Member of the European Parliament for Germany (Renew Europe Group).

Eglė Markevičiūtė, Vice Minister at the Ministry of the Economy and Innovation of the Republic of Lithuania, joined the event in her personal capacity to comment on how to improve the alignment on data protection when it comes to the DSA and DMA. “There really is a need for greater flexibility on the enforcement and specific obligations when moving towards a set of criteria that would be applicable over a wide range of platforms and service providers. The goal is not to restrain big online platforms as a source of potential danger but to ensure that consumers as well as small and medium enterprises are protected,” she said.

“Digital innovation requires us to stay open, and this is only possible if we cooperate internationally, especially with our democratic partners such as the US” Svenja Hahn (DE, RE)

“I think the Commission sets out in the DMA to allow platforms to unlock their full potential by harmonising national rules so as to allow end users and business users alike to reap the full benefits of the platform economy and the digital economy at large. What is needed at the EU level is to ensure that harmonisation. To achieve that, I think you have to use objectives and administered rules as you can’t use very subjective or ambiguous standards,” added Kay Jebelli of the Computer & Communications Industry Association (CCIA).

“In the United States we tend to look at things around antitrust or competition using the consumer welfare standard which is basically the question of who’s being harmed. Europe, on the contrary, follows a more precautionary principle that can be summed up as ‘can we get ahead of what we think potential harm might be’, and the American mindset tends to be like ‘why do you want to regulate inefficiency into the system’,” said Shane Tews, a visiting fellow at the American Enterprise Institute.

With the world of technology constantly evolving, it is crucial that the European Union is able to keep up with latest developments, thereby providing European consumers with a wide array of choices.

Originally published here

Pentingnya Perlindungan Hak Kekayaan Intelektual untuk Revolusi Digital

Revolusi digital saat ini merupakan fenomena yang tidak bisa kita pisahkan dari kehidupan kita sehari-hari, khususnya kita yang hidup di kota-kota besar di seluruh dunia. Berbagai teknologi yang dihasilkan oleh revolusi digital, khususnya di bidang teknologi informasi, seperti internet dan smartphone, telah kesehariaan jutaan orang di seluruh dunia untuk melakukan pekerjaan dan kegiatan mereka.

Melalui jaringan internet dan smartphone misalnya kita bisa melakukan berbagai kegiatan sehari-hari dengan lebih mudah, seperti memesan transportasi, penginapan, makanan, hingga mencari navigasi ketika bepergian. Tidak hanya itu, berkat semakin berkembangnya jaringan internet dan teknologi gadget, kita juga semakin mudah dalam mencari pengetahuan, dan bisa mengakses informasi dari seluruh dunia dengan cepat dan terjangkau.

Tidak bisa dipungkiri, perkembangan teknologi yang sangat pesat ini merupakan hal yang tidak diperkirakan oleh banyak orang berdekade-dekade yang lalu. Di masa lalu, hampir semua orang tidak membayangkan bahwa di masa depan, kita bisa memiliki alat multifungsi yang tidak bisa dipisahkan dari keseharian kita, untuk melakukan kegiatan sehari-hari, hingga mengakses informasi dari seluruh dunia.

Perkembangan teknologi secara global, merupakan sesuatu yang tidak bisa kita hentikan. Kemajuan teknologi, termasuk juga revolusi digital, adalah sesuatu yang akan terus berjalan dan berkembang dengan pesat dari tahun ke tahun. Oleh karena itu, agar tidak tertinggal, kita harus mampu bersaing melalui pengembangan ilmu pengetahuan dan meningkatkan inovasi.

Meningkatkan inovasi tentu merupakan sesuatu yang tidak bisa diabaikan agar kita mampu tetap bersaing dan tidak tertinggal dalam bidang revolusi digital. Tanpa adanya inovasi, tentu kita akan semakin tertinggal, dan tidak akan mampu bersaing di dunia yang semakin bergantung pada perkembangan teknologi.

Untuk itu, adanya seperangkat hukum dan kebijakan yang mendorong inovasi untuk meningkatkan daya saing di era digital adalah hal yang sangat penting. Salah satu dari kebijakan tersebut adalah perlindungan terhadap hak kekayaan intelektual, untuk mendorong inovasi yang dilakukan oleh para inovator dan orang-orang yang memiliki kreativitas yang tinggi, yang mencakup berbagai jenis, seperti hak cipta, paten, dan merek (computerweekly.com, 18/4/2018).

Perlindungan hak kekayaan intelektual tentu merupakan hal yang sangat penting, terlebih lagi di era digital seperti saat ini. Kemajuan teknologi telah semakin memberi kemudahan bagi setiap orang untuk membajak dan mencuri hasil karya orang lain untuk keuntungannya sendiri. Hal ini tentu akan sangat merugikan para inovator dan orang-orang yang menjadi pembuat karya tersebut, karena mereka tidak mampu mengambil manfaat dari karya yang mereka buat.

Tanpa adanya perlindungan hak kekayaan intelektual, insentif seseorang untuk berkreasi dan berinovasi tentu akan semakin berkurang. Dengan demikian, maka kemajuan dan perkembangan teknologi akan semakin terhambat, dan tidak mustahil justru akan membawa kemunduran.

Pentingnya perlindungan hak kekayaan intelektual di era digital ini juga merupakan hal yang disampaikan dan diadvokasi oleh banyak pihak, termasuk pejabat tinggi di Indonesia. Salah tsatu pejabat tinggi yang menyatakan hal tersebut adalah Menteri Hukum dan HAM.
Menteri Hukum dan Hak Asasi Manusia, Yasonna Laoly, dalam sesi kuliah umum virtual Pekan Kekayaan Intelektual Universitas Indonesia, menyatakan bahwa “Peran kekayaan intelektual dalam era baru Revolusi Industri 4.0 memiliki posisi yang sangat penting. Kekayaan intelektual sebagai fondasi dari ekonomi kreatif diharapkan dapat menjadi competitive advantage sekaligus pendorong perekonomian nasional,” (AntaraNews.com, 27/11/2020).

Pernyataan yang dikeluarkan oleh Menteri Hukum dan HAM ini tentu merupakan sesuatu yang sangat positif dan harus kita apresiasi. Sebagaimana yang kita ketahui, secara umum, perlindungan hak kekayaan intelektual, khususnya yang berkaitan dengan produk-produk digital, masih belum terlalu kuat di Indonesia.

Bila kita pergi ke toko-toko atau pusat perbelanjaan misalnya, dengan mudah kita bisa mendapatkan berbagai produk digital bajakan dengan harga yang sangat murah, Diharapkan, melalui pernyataan yang dikeluarkan oleh Menteri Hukum dan Hak Asasi Manusia tersebut , Pemerintah Indonesia dapat semakin memperbaiki perlindungan hak kekayaan intelektual di negara kita, untuk meningkatkan daya saing Indonesia di era revolusi digital saat ini.

Sebagai penutup, pengetahuan dan ide-ide baru yang kreatif merupakan sumber daya yang tidak ternilai bagi ekonomi global di era digital seperti saat ini. Bila kita tidak mampu mengembangkan pengetahuan dan menemukan ide-ide baru yang kreatif, maka kita tidak akan mampu beradaptasi dan bersaing di era revolusi digital saat ini. Untuk itu, adanya seperangkat hukum yang mencegah terjadinya pencurian ide-ide kreatif dalam bentuk hak kekayaan intelektual adalah hal yang sangat penting.

Originally published here.

Twitter Ban shows that the free market works

Big tech’s conservative purge will lead to stricter regulations.

Earlier this month, Twitter banned the personal account of Donald J. Trump (@realdonaldtrump) and at the same time limited the official White House account, leaving the President of the United States unable to directly communicate with the nation and its voters on the platform. 

For many conservatives, the move to ban Trump from Twitter after the Capitol riots on January 7, was an assault on freedom of speech and since then, many leaders around the world have also condemned how Twitter handled the situation. 

German Chancellor Angela Merkel was critical of Twitter for blocking President Donald Trump’s account, considering the ban a threat to free speech. The European commissioner Thierry Breton saw Twitter’s decision as a total break from the past, calling it “the 9/11 moment of social media” in an op-ed published by Politico. Acting Australian Prime Minister Michael McCormack said blocking Trump amounts to censorship. And the French Junior Minister for European Union Affairs Clement Beaune said to Bloomberg that “This should be decided by citizens, not by a CEO.”

Other social media platforms such as Facebook, Instagram, Snapchat, TikTok, and YouTube followed Twitter’s lead and now Trump is banned from virtually every major platform out there, mostly indefinitely. Those who approve of Twitter’s ban of Donald Trump and the purge of thousands of conservative accounts on the platform, like to invoke the mantra that if conservatives think they have been “shut down”, they should also find comfort in the fact that the free market will provide an alternative and competition. However, it’s not that simple.

Social media platforms enjoy a great privilege that not many other companies or sectors do. They make their own rules under their Terms of Service and have total control of their platforms. This extreme power makes it hard for users and companies who feel that they have been unfairly treated to have a diligent due process review of their claims. With nowhere to go to have their voices heard, one last line of defence still stands and stronger than ever: the market.

After the ban of Donald Trump’s accounts, which had over 80 million followers on Twitter, some consumers started to ditch the social media platforms and services that they believe were censoring and targeting conservative speech. Many well known political accounts, such as James Woods reportedly lost over 7 thousand followers in 48 hours and the Heritage Foundation, a conservative think tank, lost 45,000 followers. Even more centrist political accounts as Dave Rubin reported a drop of over 35 thousand followers on Twitter. Republican lawmakers also lost thousands of followers. According to USA Today, about 42% of the accounts – 213 – had fewer followers on Jan. 13 than they did on Jan. 6. The vast majority of those accounts –200 – belonged to Republicans. As a result, the next week, Twitter stocks plummeted more than 10%. Facebook fell 4% to $256.84, Alphabet stock was down 2.2% to $1,766.72, and Amazon stock dropped 2.2%, to $3,114.21.

The market reacted this way because large tech companies are alienating users by directly excluding accounts and because people are simply leaving the platforms all together for alternatives such as Gab and Rumble. Parler was a popular alternative for Twitter but was wiped off the internet last week after both Apple and Google remove the app from their stores and Amazon decided not to host the website on their AWS servers. 

Most of today’s social media platforms are free because they collect data about their users every day, from location to website searches, even fingerprinting all your devices. Those pieces of information are sold to advertisers who cater to your interests.  As we have written, this practice is both innovative and helps support the social media networks we use. However, the business model is not sustainable if tech companies are not able to gather updated information about their users, or worse, if the consumers the advertisers are looking to reach are not on their platforms anymore. 

Twitter CEO Jack Dorsey, whose company’s share plumed the most this week, seems to have realized this the hard way. His strategy may have backlashed as now, millions of conservative consumers are out on the internet, without a home, and desperately looking for a new place to be heard and speak freely. He acknowledged last week that banning Trump from Twitter “sets a precedent I feel is dangerous: the power an individual or corporation has over a part of the global public conversation.”

Tech companies should be aware that even though they enjoy a privileged position now, this might not last for long. The European Commission, for example, has introduced two proposals that would place more restraints on digital giants. The first, is the Digital Markets Act, the centerpiece of Europe’s digital plans aimed at boosting online competition in a world dominated by Silicon Valley. The second is the Digital Services Act aimed to limit the spread of illegal content and goods online, making online platforms responsible for the spread of such content. Other countries might also try to regulate digital services in a way that would be prejudicial to tech companies and most importantly, to consumer choice. Poland, for instance, plans to make censoring of social media accounts illegal: “algorithms or the owners of corporate giants should not decide which views are right and which are not,” wrote the prime minister, Mateusz Morawiecki on Facebook last week.

For now, a free market is still the most powerful way in which consumers can have a voice and make their choices clear. This might change in the future, but it’s comforting to know that even when governments fail, consumers and private companies can count on the power of supply and demand. And if you ask me, I wouldn’t change it for anything else.

Follow me on Twitter or LinkedIn

Originally published here.

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