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US Trade Policy Shift on Big Tech Offers Hope Despite Huge Fights Ahead
The implications of the U.S. withdrawal of support for extreme Big Tech trade provisions for developing countries
and people across the world.
Dec 05, 2023
On October 24, the U.S. government withdrew support for a set of proposals for digital trade rules in talks at the World Trade Organization (WTO) that the U.S. itself had proposed in 2019.
With regard to negotiations on digital trade, or “e-commerce,” the Office of the U.S. Trade Representative stated: “many countries, including the United States, are examining their approaches to data and source code, and the impact of trade rules in these areas. In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations.” However, variations on the proposed rules continue to be supported by other WTO members, as can be seen in the most recent leaked text, and it remains to be seen where the U.S. will sit in relation to those.
The proposals, developed and backed by Big Tech lobbying groups, were intended to limit governments’ ability to regulate cross-border transfers of data, as well as governments’ regulation of source code and algorithms, a source of significant public debate in many countries around the world.
Although Big Tech includes the largest corporations in world history, the industry is subject to far less regulation than other economic sectors.
The Biden administration’s step back from outdated Big Tech proposals in trade agreements is a huge symbolic win for workers and small businesses, as well as for fairness, democracy, and development around the world. It’s a major win for the civil society groups that form part of the Our World Is Not for Sale (OWINFS) global network that has campaigned against these rules since they were first proposed in other trade agreements as far back as 2015.
The U.S. first proposed these Big Tech rules when public opinion was largely unaware of the dangers of Big Tech corporations controlling our data, monopolizing key technologies, and preventing effective regulation of the digital environment.
Today, much of the world is far more aware of the damage caused by Big Tech as it monopolizes vast swathes of our economy to lock out fair competition for small businesses, profits from discrimination and surveillance, undermines civil rights, and foments extremism and disinformation. Using its vast economic power, it intervenes in policy-making processes to evade regulation, thereby weakening our democracies. Big Tech hoards, steals, and illegally collects data, the key economic resource today, thereby exacerbating inequities between industry owners and the rest of us. It also invades our privacy and makes us and our children less safe online. It violates workers’ rights in order to maximize profits.
All of these issues, and more, are subjects of contemporary debate, as well as multiple lawsuits, indictments, and financial penalties, in the U.S. and around the world.
For nearly a decade, Big Tech has tried to secure binding new global disciplines to constrain regulation on these issues and preempt appropriate governance through democratic channels. Although Big Tech includes the largest corporations in world history, the industry is subject to far less regulation than other economic sectors.
Big Tech’s proposals on source code are illustrative. The use of artificial intelligence (AI) has increased exponentially in recent years. AI involves using large data sets to train computers to make decisions using the data provided to them, based on instructions from algorithms written into the source code.
However, algorithmic systems can exacerbate racial, gender, and labor discrimination; facilitate corporate evasion of regulatory oversight; and be used to prevent competition. Yet Big Tech is pursuing proposals that would bar governments from having access to the source code for algorithms in order to regulate it. Companies use AI to decide more and more business practices, many of which, it turns out, often violate competition rules, privacy, or civil or labor rights. Thus, Big Tech wants to lock source code up in permanent, binding “trade” agreements to ensure that governments can’t regulate most of their business practices!
Proponents argue that these source code provisions are needed to protect against forced technology transfer (usually referencing China). But this is not considered a real issue in most of the countries party to digital trade deals. Source codes are already protected by intellectual property law, including copyright and, in some cases, patents, as well as trade secrets. The proposed bans on source code disclosures would have represented an additional layer of protection for algorithms embedded in source code, affecting a broad swathe of human activity in which hardly any other counterbalancing human, social, economic, or cultural rights would have been affirmed.
Extensive further reasons why exceptions to the source code text in these agreements are insufficient — in the US, the European Union (EU), and around the world — can be found in the report, “The European Union’s Digital Trade Rules: Undermining European Policy to Rein in Big Tech.” For example, experts have noted that for algorithmic systems, “white box” testing (with access to the source code) is far superior to “black box” testing (without it). True public oversight would require scrutiny, and thus access to the source code, by academics, media, critical engineers, and trade unions, and not only by the regulators and judicial adjudicators currently recognized in the proposed provisions.
In a debate in the European Parliament with this author, the head of services and digital trade for the European Commission, Sylvia Baule, tried to claim that the “general exceptions” in the WTO — the model for those in the digital trade provisions — would be sufficient to protect the public interest. However, these provisions have been successful in defending public interests in trade cases only 2 out of 48 times in the WTO’s history, which Baule sheepishly acknowledged was “not 100 percent.” In addition, enforcement of public interest laws, labor rights, and civil rights such as privacy must not be subject to review by a trade tribunal, which prioritizes trade considerations over human and fundamental rights.
Finally, the exceptions contemplate, however insufficiently, only some known risks inherent to AI systems. As new risks and social harms become known, it will be even more important for governments to maintain the power to regulate algorithmic systems, including their source codes, to ensure that human rights are upheld and that harms to society are reduced.
[Countries] need to use the public’s data for the public’s interest, such as for addressing climate change or resolving global pandemics — rather than having it monopolized for the private profit of a handful of Big Tech corporations.
Allowing Big Tech monopolies to establish rules enabling them to transfer data around the world without regulation would also further tilt the playing field against workers, consumers, citizens, small businesses, and developing countries generally, thereby locking in unequal access to the greatest source of wealth creation in the future: data. Countries need to be able to use their data for digital industrialization, based on decent job creation. They also need to use the public’s data for the public’s interest, such as for addressing climate change or resolving global pandemics — rather than having it monopolized for the private profit of a handful of Big Tech corporations.
When these risks are considered, together with the myriad harms to society and development potential becoming more well-known each day (and detailed in “Digital Trade Rules: A disastrous new constitution for the global economy written by and for Big Tech”), it is difficult to avoid a conclusion: there is no compelling justification for, and in fact an abundance of arguments against, including provisions that bar governments from requiring the disclosure of source code, and from regulating data flows, in “trade” agreements.
Other provisions would also be harmful for development, according to the United Nations Conference on Trade and Development’s “Joint Statement Initiative on E-Commerce (JSI): Economic and Fiscal Implications for the South,” and much other research available at the OWINFS site here.
Nevertheless, Big Tech has thrown a predictable temper tantrum since the announcement, deluging the press with outlandish claims that this prudent and cautious change will somehow benefit China (it won’t) or that it’s harmful to workers (it isn’t, and Big Tech wouldn’t care anyway).
None of these claims have merit. Yet their lobbying offensive demonstrates clearly how much Big Tech stood to gain economically from the provisions.
The EU, Japan, Australia, Canada, and other countries pushing these proposals should also hit the “pause” button. Their national industries were never set to gain from them; rather it would have been the local divisions of Google, Apple, Facebook, Amazon, and the like, which formed the core of the lobbying pressure for the provisions around the world.
Developing countries being pressured to join these agreements can take this opportunity to strengthen their resolve. The Africa Group’s rejection of these proposals at the WTO in December 2017 set an important precedent. The majority of developing countries have stayed out of the so-called Joint Statement Initiative (JSI) by a breakaway group that led to negotiations on digital trade without a mandate from the WTO. This is despite an ongoing pressure campaign which includes the egregious use of “development aid” funds to lobby countries to join.
A few dozen developing countries have joined the JSI. Nigeria has proposed an exception that would allow them not to comply with the most problematic rules, but there’s no real chance it will be accepted. The change in the U.S. position is an important sign that the tide is turning against these rules, even in countries that have championed them. This new context provides a signal for countries to withdraw from participation. Many countries are also being pressured to accept the same provisions through bilateral or regional trade agreements, and these should also be rejected. And the US position could change again.
Preventing “trade” policy from imposing regulatory handcuffs on the digital economy is the first step toward using digitalization in the public interest, including for digital industrialization.
The change in the U.S. position is an important sign that the tide is turning...
Next, countries should fill that policy space with appropriate regulations. These would include rules to, for example, prevent monopolies and promote start-ups; prevent discrimination; ensure that civil rights, such as privacy and labor rights, are enforced in the digital sphere, and assess fair taxation; among others. For developing countries, technology transfer and a genuine commitment to supporting digital industrialization are top priorities.
Legal, policy, and programmatic developments in the EU, and some developing countries such as India, already go beyond the data flows and source code-related provisions proposed in the JSI. As their digitalization progresses, all countries will have to employ policies inconsistent with these provisions, as the U.S. — otherwise the home of digital laissez faire — has now realized.
In a few months’ time, WTO members will have to make a decision on another digital trade issue. More than 25 years ago, the U.S. snuck an agreement into the WTO to ban customs duties on electronic transmissions. But there is abundant evidence that Amazon, Netflix, Apple, and Microsoft can afford normal trade taxes on electronic books, movies, music, and software, while still making huge profits selling these products around the world. This agreement has been extended over and over. These taxes could be essential revenue sources for developing countries to build their digital infrastructures, not to mention for public services, climate resilience, and other key needs. A tax holiday for the most profitable of Big Tech corporations does nothing for workers or small businesses, in the United States or around the world. Now, developed country members of the WTO must drop their insistence on extending it yet again.
Instead, the moratorium on customs duties on electronic transmissions should be allowed to expire at the upcoming 13th Ministerial Conference of the WTO in Abu Dhabi in February 2024. This will be the next test of the “worker-centeredness” of the trade policy of the U.S., the EU, and other countries.
Only with proper policy space — by keeping rules preventing effective regulation of the digital economy out of trade agreements — will citizens worldwide have a chance to rein in Big Tech.
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'Focus on Structural Power': Lawmakers Told to Press Big Tech CEOs on 'Toxic' Business Model
"Tech CEOs want to talk about their content policies and moderation efforts—because they know their core business models are indefensible."
Mar 25, 2021
With the CEOs of Twitter, Google, and Facebook set to testify Thursday on the role social media plays in promoting the kinds of misinformation and far-right extremism that sparked the deadly Capitol attack, anti-monopoly experts are urging members of Congress not to allow the executives to divert attention away from their fundamentally nefarious business model that thrives on the spread of dangerous lies.
"False or radicalizing content is not an unfortunate byproduct of the business model. It's core to these corporations' ad-based revenue models."
--Fight Corporate Monopolies
"The tech CEOs want to talk about their content policies and moderation efforts--because they know their core business models are indefensible and toxic," Morgan Harper, senior advisor at Fight Corporate Monopolies, said ahead of the House technology subcommittee hearing, which is scheduled to begin at 12:00 pm ET.
"If lawmakers are serious about fixing these problems," Harper added, "they must focus on structural power and resist the distractions. Anything less would be a massive failure."
Watch the hearing live:
Amid intensifying scrutiny from lawmakers and growing support for forceful antitrust and regulatory action, Facebook, Twitter, and Google in recent months have taken steps purportedly aimed at stemming the flow of misinformation about the coronavirus pandemic, Covid-19 vaccines, elections, and more.
In the aftermath of the January 6 insurrection--fueled by lies that circulated widely on social media--Facebook and Twitter banned former President Donald Trump for being the chief architect and amplifier of those lies.
But Fight Corporate Monopolies and other advocacy groups argue that such self-regulation--by design--does nothing to address the fact the Facebook, Google, and Twitter's profits depend to a significant degree on cultivating outrageous falsehoods and using invasive surveillance advertising to ensure they spread to receptive audiences.
"False or radicalizing content is not an unfortunate byproduct of the business model. It's core to these corporations' ad-based revenue models," said Fight Corporate Monopolies. "Facebook and Google's YouTube generate a substantial portion of their revenue by selling user data to advertisers--which means any social media obsession becomes a profit hub."
Tech CEOs, the group warned, "want to talk about modest regulatory reforms that would allow them to continue operating in largely the same ways they do today. We have seen this misdirection before, after YouTube and Facebook supercharged a conspiracy theory claiming George Floyd's death was faked to reach 1.3 million viewers."
Amnesty Tech's acting deputy director Joe Westby offered a similar critique, noting that "the business model of Big Tech firms like Google and Facebook depends on capturing people's attention to generate ad revenue--to that end, the algorithms that determine what we see on Facebook's newsfeed or Google's YouTube frequently amplify discrimination and inflammatory content."
"These companies appeal to our emotions of fear and anger to keep us staring at our screens," said Westby. "This can have a devastating effect at a population scale, fueling polarization, division, or serious human rights consequences."
Zephyr Teachout, a law professor at Fordham University, expressed hope that House panelists will ask Facebook CEO Mark Zuckerberg "how much money the company made off of QAnon," the far-right conspiracy theory whose adherents played a considerable role in the violent siege of the Capitol earlier this year.
Emma Ruby-Sachs, executive director of SumOfUs, said in a statement Thursday that Facebook, Google, and Twitter's "inability to deal with the violence, hate, and disinformation they promote on their platforms shows that these companies are failing to regulate themselves."
Ahead of the House subcommittee hearing, activists with SumOfUs gathered near the U.S. Capitol and displayed cutouts of tech executives dressed as insurrectionists to stress the role their platforms played in the violent January 6 attack.
"It's no shocker that Facebook failed to tell us about how its technology is being used to manipulate voters and spread harmful misinformation. How many times are we going to be fooled by these profit-hungry monopolies before Congress finally acts?" said Ruby-Sachs. "Letting Facebook decide how it should be regulated is like letting a criminal decide their own sentence."
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