"We must prevent the balkanization of the Internet"

Michael Spence, the Nobel Prize winner in economics, has just signed an op-ed that warns us about what the Internet could become. As the entire global economy is inextricably linked to the Internet and digital technologies, the need for regulation is becoming more pressing every day. However, he warned against implementing fragmented, awkward, burdensome and inconsistent regulations that could have far-reaching consequences for prosperity.

 

L’he Facebook-Cambridge Analytica affair revealed to the world that tens of millions of Facebook profiles were collected to serve questionable political purposes. This case has produced a backlash against Mark Zuckerberg's platform in particular but also against internet giants in general. This data leakage case is just one aspect of the risks associated with the Internet, which is at the heart of the current digital revolution.

 

Indeed, most of the innovations that have reshaped the global economy over the past 25 years have been based on network connectivity. This has profoundly transformed the way we trade, inform, communicate, educate, supply and so on.

Network connectivity is also central to the machine learning technologies that make up modern Artificial Intelligence.

 

Over the past 15 years or so, the mobile Internet has reinforced this trend. The number of people connected to the Internet has increased dramatically, enabling them to participate more easily and quickly in the digital economy and to discover new fields of application. GPS navigation, carpooling platforms, mobile payment systems, connected objects... now have a considerable impact on people's daily life and work.

 

From the dawn of the Internet and until recently, there was a belief in an open Internet, built on standard protocols but with very little regulation. It was imagined that this would make the web serve the interests of users, communities, countries and the global economy better.

 

But major risks have emerged. Michael Spence points in particular to the monopoly of mega-platforms such as Facebook and Google; vulnerability to attacks on critical infrastructure, including financial market systems and electoral processes; and threats to privacy and security of data and intellectual property. In addition, fundamental questions have emerged about the impact of the Internet on political choices, social cohesion, citizen engagement and child development.

 

The author notes that as the Internet and digital technologies penetrate deeper into economies and societies, these risks and vulnerabilities become more acute. Until now, especially in the West, the only way to manage these risks has been to leave the initiative for self-regulation to the companies that provide these services. Today we are finding that this principle is not working. In many areas, such as the hunt for objectionable content, the major platforms are reluctant to regulate and are waiting for guidance from the courts or regulators. How many years did it take before Twitter began to take an interest in accounts inciting terrorism or racial hatred? A few accounts were closed down, but in small doses.

 

What seems inevitable, therefore, is that the world will be forced to move from an open Internet to one that is subject to greater control. But, for Michael Spence, this process carries its own risks.

 

International cooperation is called upon to help in this mission. But it must be said that this approach is unlikely to succeed in the current climate of protectionism and unilateralism. Michael Spence believes that even treaties banning cyberwarfare are unlikely to succeed. Even if states did succeed, non-state actors would continue to act to wreak havoc and destruction.

 

In this context, the author argues that " The new regulations will be initiated largely by individual states, which will have to answer difficult questions. Who is responsible for data security? Should the state have access to user data and for what purposes? Will users be able to remain anonymous online? "

 

It is the States that will implement, each for its own interests, regulatory arsenals. There is no doubt, then, that countries' responses to these questions will vary considerably according to differences in value, principle and governance structure. Michael Spence notes that in China, for example, authorities filter content deemed incompatible with state interests, whereas in the West, there is no entity with the legitimate power to filter content, except in extreme cases such as the use of hate speech or paedophilia. State interests take precedence over any other consideration, but in cases where a broad consensus could be reached. Everyone considered fake news or foreign interference in electoral processes to be unacceptable, but no agreement could be reached on appropriate remedies.

 

Thus the lack of consensus or cooperation may lead to the establishment of national digital borders. In this world according to the free Internet, everything would be turned upside down. Not only would the flow of data and information be impeded, but also trade, supply chains, and an impressive amount of services and daily practices that seemed "natural" to us today and that will become exceptional. This new world of digital frontiers already exists: in China, most of the major American technology platforms are out of bounds. On the other hand, the US government, under the pretext of a security risk, has prohibited the Chinese company Huawei from supplying network or mobile phone equipment to American companies. This American initiative is not being followed up in Europe, where Huawei is accepted as a major player on the continent.

But Europe itself, and alone, decides to regulate data protection and privacy strongly. It is the DPMR that will come into force in May. This regulation will inevitably hinder the flow of data needed for all machine learning and deep learning. But this constraint is not as strategic for Europeans as it could be for the Chinese or the Americans. Indeed, Europe does not have mega-platforms enabling it to develop machine learning technologies competitively.

 

For Michael Spence, " As the entire global economy is inextricably linked to the Internet and digital technologies, it is more important than ever to strengthen regulation. But if this regulation is fragmented, clumsy, burdensome or inconsistent, the consequences for economic integration - and therefore prosperity - could be serious. "

The Nobel laureate in economics then called on decision-makers not to try to agree on details, which would be an impossible task, but rather to define jointly a number of principles that would serve as a basis for future multilateral agreements. At the very least, if an open world economy is to be preserved, such agreements should, as a matter of priority, outlaw all misuse of data.

 

The article Preventing the Balkanization of the Internetco-authored by Michael Spence and Fred Hu was published in Project Syndicate.