November 22, 2020The Intersectiontechnologygeopolitics

Nations are hurting themselves in their big fight with Big Tech

In trying to see off the challenge from transnational tech platforms, nation-states are not only compromising their values, but also undermining their interests.

Mint This is from The Intersection column that appears every other Monday in Mint.

In a recent interview with The Atlantic magazine, Barack Obama described social media as the single biggest threat to our democracy”, arguing that these platforms had destroyed the common narrative necessary for democracy to function. He held tech companies partly responsible, contending that, The degree to which these companies are insisting that they are more like a phone company than they are like The Atlantic, I do not think is tenable.” In the ongoing debate on whether social media companies are platforms or publications, the former US president holds that these companies are making editorial choices, whether they’ve buried them in algorithms or not” and they can’t cite free speech to provide a platform for any view that is out there”. In his opinion, tackling this challenge to democracy would require both government regulation and changes in the way these companies operate.

Those with longer memories can be forgiven for seeing Obama’s comments as hypocritical and partisan—after all, his own meteoric ascent to the US presidency in 2008 came on the back of what we then called Web 2.0.” I personally recall being trolled by Obamaniacs ahead of that year’s US presidential election for pointing out that for all the hope and hype, he cannot walk on water. Yet, to be fair to him, few people in 2008 suspected that pervasive social media would so profoundly and so rapidly transform human society, starting with politics.

That social media threatens liberal democracy is only part of the overall picture. In fact, information networks pose a fundamental challenge to the idea of nation-states and to the world order that they constitute. At a structural level, highly networked societies share information in ways and at speeds that hierarchically-ordered states just cannot cope with. People can mobilize—for good and bad—in ways that authorities find hard to manage. Governments lack legal bases, administrative structures, operating procedures and competent human resources to coherently govern people with smartphones, mobile internet and a plethora of apps. At a cognitive level, social media affects how people perceive reality, form opinions, and make decisions. Given that both liberal democracy and free markets are based on the capability of individuals to make rational choices, what should we make of them now that we have come to realize that social media messes with their ability to do so?

The right tools to deal with the political challenge posed by trans-national technology platforms—“Big Tech” in short—are yet to be made, so governments are using the ones they have. Democracies are trying to fit the problem into an anti-trust frame. Lawmakers in the US are examining whether they should regulate Big Tech or simply break these firms up, as they did with AT&T in the 1980s. They want to break up platforms citing the phone company analogy, but at the same time treat them as publishers for the content they carry. The European Union, always trigger-happy on the antitrust front, is likely to embrace ex ante competition regulations. In India, politicians are throwing many of our abundant laws and regulations at Big Tech even as they think up new ones. Taking a page out of the playbook of their American counterparts, our legislators are trying to haul up tech company executives to testify before them. Everyone is grappling for answers. The paradox all democracies face is that it is impossible to check platform power without cutting into free speech and economic freedom that the former seek to protect and the latter actually provide.

Authoritarian states face the same fundamental challenge, but have their own ways of dealing with it. Censorship, propaganda and coercive maintenance of narrative dominance is their preset position. Over and above that, there are arbitrary actions that can be set in motion without explanation. As much as the Chinese government’s decision to pull the plug on Ant Group’s $35 billion initial public offer (IPO) last week is made out to be about prudent-albeit-late-in-the-day financial regulations, the move is in keeping with President Xi Jinping’s consistent practice of cutting down to size anything that could challenge the Communist Party’s—and his own—hold on power. China can perhaps carry such measures off for longer than other authoritarians, but at some point, its political economy will start biting. A lot of party leaders in Beijing might be smarting at personal losses—and lost opportunities for windfall gains—arising from the axed Ant IPO.

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That brings us to another point: In trying to see off the challenge from transnational tech platforms, nation-states are not only compromising their values, but also undermining their interests. Xi’s action against Ant is a blow to his own ambitions for China. If the US government breaks up Big Tech, it will have an impact on America’s global influence. India is weakened if it does not offer foreign companies a level playing field. The surge in populism and nationalism around the world creates an appearance that nation-states are striking back against three decades of globalism. Yet, if they use this power in ways that damage both their values and interests, the fate of nation-states is, well, written on the wall.

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