Final echoes of the US Senate committee’s questions of Facebook last week will only fade in the UN Security Council where, in a few years, Member States will adopt a treaty on regulation of the Internet Economy. By opening wide the door to questions on privacy, revenue, security and purpose, Congress showed its well-placed concern and signaled that others can too. Companies must either prepare themselves for the consequences, which follows the predictable arc of most revolutions, or collaborate to try to change the almost inevitable.
The Congressional line of questioning will now be repeated — earnestly, tragically, and sometimes farcically — by governments around the world. That has already begun, and portends a patchwork of individual national solutions: a prohibition on fake news in Malaysia, a proposed transaction tax in Europe, a tax on social media use in Uganda. These will confront the Internet Economy with the risk of wildly balkanised rules and regulations that will limit access, curtail content and commerce, and disconnect millions of daily users.
Rule of the Moderates
Internet companies will react and take the fight to the front lines — many already have. They will (rightly) play for time launching inquiries, listening tours, and testing models of self-regulation. Sheryl Sandberg will wear out two Gulfstream 550s as she makes the case for her firm from Brussels to Bujumbura where, with cohorts of economists, content creators and local stakeholders, she will ably prove again the economic worth and multiplier effect that Internet companies enable. Along the way, she will re-confirm the conviction of many politicians in the local wealth that companies such as hers create. In this way, and for a while, governments will be cowed or convinced that the greatest tool of economic growth yet developed is something not to be handled too roughly. Some will be branded bad actors (as some will be most certainly be), others proclaimed outliers or — a banal moniker that can nonetheless tease the very food from little mouths — unwelcoming investment destinations. For a time, Internet companies will be able to demonstrate that the net cost of regulating them is great, but that the benefits of under-regulation are greater.
Reign of Terror
Then, as surely as Josh Bolton will unfriend Mike Pompeo, governments that were told they were mistaken in their views will box Internet companies into a checkmate. These questions are too big for Uganda to answer on its own? Regulatory balkanisation is a risk to your business model? Then let us reach for an international standard. This is achieved within the UN General Assembly and associated bodies where some tough questions will get answered: how much regulation is too little, how shall I protect my culture, when do I limit citizen access to these addictive tools, and what revenue-transfer model is too lax? And so, after years of waiting to be asked to dance, the General Assembly will launch itself on a wide and graceful reel that will come to a breathy end at the treaty table.
Reign of Virtue
There, in the multilateral environment, where malign actors will let the International Community take the lead in creating standards for regulation of the Internet and cloud, and (why not, while we’re at it?) artificial intelligence, Internet companies will be obliged to negotiate the most favourable terms under which to operate worldwide because that choice will look better than 200 different national codes. Also in that room, defensive now, and showing signs of exasperation, the United States will once again speak eloquently in defence of the Internet companies — their hapless teen years long behind them — after which the delegate from Uganda will click on a forbidden 2018 YouTube link of Senator Chuck Grassley, now in peaceful retirement in Des Moines, and remind the United States who showed them the way.
Author: Greg Francis, Managing Director at Access Partnership