“Free flow of data: panacea or danger?” and “Concentration in internet services”

Event report

[Read more session reports from the WSIS Forum 2018]

Session 144 comprised two distinct sessions: Free flow of data: panacea or danger? And Concentration in Internet Services, with Dr Richard Hill, president of the Association for Proper Internet Governance, moderating both. Hill introduced the first panel by explaining that since the Internet is financed by advertising revenue, the free flow of data is a key element, as technology companies are providing services based on users giving them data. Hill also mentioned the way in which the EU, through its previous data privacy directive and currently the General Data Protection Regulation, and through its cross-border data flow agreements, like the one with the USA, is ahead of other jurisdictions. He argued that if ‘data is the new oil’, users are giving their oil away for free, rather than asking for royalties.

Dr Stephanie Borg Psaila, digital policy director at DiploFoundation, brought more data to the conversation, by discussing two studies from 2017, which show a lack of awareness or concern from users in terms of the trade-offs required to use free services provided by tech companies. Borg Psaila posited that based on the same studies users are disadvantaged, since they are faced with a lack of information about alternatives, and since many users believe that exchange of personal data is an inevitable trade-off. The process of giving data away freely has already been happening for several decades. Further, she argued, while the issue cannot be framed simply in terms of economics, the value of the free service is less than the value of the data, and suggested that clearer roles and responsibilities for all stakeholders, especially governments and the private sector, could better protect users.

Ms Sanya Reid Smith, legal advisor for the Third World Network, explained the issue from a global trade perspective. She focused first on the laws and regulations that countries have with respect to limiting the global free flow of data, such as health data in Australia, tax data in New Zealand, and government defence contracting in the USA. Smith then explained the provisions in some future trade agreements – based mostly on leaked information since negotiations are generally behind closed doors – and certain exceptions, such as privacy, necessity, and national security, that countries have to consider in order to put up barriers.

Audience questions ranged from proposals for new taxes on Internet companies, to potential alternatives. One participant argued that data by itself in bulk is not enough.

Hill opened the second panel by explaining how even with a decentralised Internet structure, at the level of services US companies still have a major of market concentration. Hill posits that while simply being a big company should not be a cause for concern, there have been examples of abuse of power from some companies like Amazon, Google, and Facebook, with the latter achieving dominance and allowing no legitimate choice.

Dr Michael Kende, senior advisor at Analysis Mason, focused on concentration in Internet services, its origins, and potential solutions, by highlighting the current state of affairs in technology, with seven of the top ten companies in terms of value being Internet companies. Kende explained that while the Internet can facilitate competition, with its low entry barriers, due to externalities, it can lead to high market share. He then argued that high market share in itself it is not necessarily bad, except when that market power leads to harm, which is difficult to assess in terms of consumers, or competitors, depending on the regulatory environment.

Dr Jovan Kurbalija, director of Diplo Foundation and head of the Geneva Internet Platform, voiced concerns not only about the substantive issues, but also about a lack of informed and balanced conversation surrounding these issues, as the monopolies are not only economic, but also cultural. He put the issue into historical context and showed how the next decades may be spent trying to figure out how to break away from entrenched monopolies. Kurbalija cited The Economist on the unfair advantages that these monopolies have and ways to deal with them, such as transparency of data assets, review of unrealistic purchase prices, and moving to tacit from intentional collusion in enforcement. According to Kurbalija, the current stage of tech backlash should not preclude a balanced view of the issues.

By David Morar