I am the Boss.

Platforms vs Nation States

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https://arubisht.substack.com/publish/post/142419925?r=1jwjh&utm_campaign=post&utm_medium=web

She had an enriching experience at the recently concluded Youth Forum Leadership Summit 2024 organised by US State Department in Columbo, Sri Lanka.

DTW

During the Week, two seemingly independent events brought back the debate around growing power/influence of digital platforms on our lives.

In the recent episode, Meta-owned Facebook and Instagram suffered a significant outage lasting over two hours due to a technical glitch. This disruption affected hundreds of thousands of users worldwide, leading to widespread reports of difficulties accessing the platforms. At its peak, more than 550,000 users reported disruptions for Facebook, with an additional 92,000 reports for Instagram, according to outage tracking website Downdetector.com. While Meta spokesperson Andy Stone confirmed the technical issue and subsequent resolution, specifics regarding the root cause remained undisclosed.

The outage triggered a wave of reactions across social media platforms, with the incident quickly becoming a trending topic. Notably, Elon Musk, CEO of X (formerly Twitter), capitalized on Meta's misfortune by humorously remarking on the stability of his own platform's servers. Despite concerns about potential cyber threats, the White House National Security Council assured that there was no evidence of malicious activity.

Meanwhile, in a separate development, Google's contentious billing policy regarding in-app payments sparked a showdown with Indian internet companies. Google had delisted several Indian apps from its Play Store on March 1, citing non-compliance with its billing regulations. However, following discussions with India's IT minister, Ashwini Vaishnaw, Google announced a temporary reinstatement of the apps while extending payment deadlines for service fees. This move was accompanied by a commitment to collaborate on resolving the impasse in a manner that respects the interests of all parties involved.

The standoff between Google and Indian app developers underscores broader tensions surrounding market dominance and regulatory oversight in the digital sphere. Concerns have been raised about the sustainability of Google's commission structure for in-app transactions and the potential impact on smaller players within the ecosystem. This incident reflects a growing recognition of the need to safeguard the interests of domestic businesses and promote a level playing field in the digital marketplace.

These two events serve as cautionary reminders of the immense influence wielded by digital platforms and their pivotal role in shaping modern society. As they continue to expand their reach and influence, ensuring transparency, accountability, and fair competition remains paramount for fostering a healthy and inclusive digital ecosystem. I would like to introduce the BOSS framework: Boundaries, Oversight, Standards, and Security. In navigating the intricate relationship between digital platforms and governments, these four pillars serve as essential guides. Let's delve into how each element shapes the dynamics of regulation and governance in the digital era.

1. Boundaries and Jurisdiction: In the digital age, the boundaries of traditional jurisdiction are increasingly blurred as digital platforms operate across multiple jurisdictions, often without physical presence in every country where they offer services. This raises complex questions about which laws and regulations apply to platform activities and how conflicts between different legal regimes can be resolved. Boundaries and jurisdiction refer to the delineation of legal authority over digital platforms, including issues related to sovereignty, territoriality, and extraterritoriality.

   In India, the boundaries and jurisdiction of digital platforms have become a contentious issue, particularly in cases where Indian platforms face adverse actions in foreign countries. For example, when Indian platforms like Paytm and ShareChat faced temporary bans from Google Play Store for alleged policy violations, it sparked debates about the extent of Google's authority to enforce its policies in India. Similarly, India's move to ban several Chinese-owned apps, citing national security concerns, raised questions about the jurisdictional reach of Indian regulations over foreign-owned platforms operating in India. On the global stage, tensions often arise between countries when native digital platforms face adverse actions in foreign jurisdictions. For instance, when Facebook-owned WhatsApp updated its privacy policy, it faced backlash from regulators and users in multiple countries, including India, Brazil, and the European Union. In response, regulators in these countries initiated investigations and enforcement actions, highlighting the challenges of enforcing national laws in the borderless digital realm. Similarly, when the European Union imposed fines on tech giants like Google for antitrust violations, it underscored the EU's assertion of jurisdiction over global platforms operating within its single market.

2. Oversight and Compliance: Effective oversight and compliance mechanisms are essential for ensuring that digital platforms adhere to regulatory requirements and uphold user rights and interests. Regulatory bodies play a crucial role in monitoring platform activities, investigating complaints, and enforcing compliance with applicable laws and regulations. We have the archaic Telecom Regulatory Authority of India (TRAI) oversee compliance with telecommunications regulations, including the quality of service provided by digital platforms offering voice and data services. TRAI conducts audits, issues directives, and imposes penalties on non-compliant platforms to ensure consumer protection and market integrity. Globally, the most active regulator is The Federal Trade Commission (FTC) in the United States which serves as a key regulatory authority responsible for overseeing platform activities and enforcing consumer protection laws.

   I have written about Lina Khan, chairwoman of Federal Trade Commission (FTC) approach towards Digital Platform regulations in an earlier post.

   Through investigations, enforcement actions, and consent decrees, the FTC holds platforms accountable for deceptive practices, anticompetitive behavior, and violations of privacy rights.

3. Stakeholder Engagement: Stakeholder engagement entails meaningful participation and collaboration among various actors, including government agencies, industry stakeholders, civil society organizations, and academia, in shaping platform governance and regulatory policies. Inclusive decision-making processes foster transparency, accountability, and legitimacy in regulatory interventions. The Ministry of Electronics and Information Technology (MeitY) in India engages stakeholders through public consultations, workshops, and advisory committees to solicit input on draft regulations and policy initiatives related to digital platforms. This participatory approach enables diverse perspectives to be considered in regulatory decision-making. The European Commission also conducts extensive stakeholder consultations as part of its policy-making process for digital platform regulation though many of the largest digital platforms including Apple and Alphabet do not like when smaller mostly European platforms are able to influence action from various EU bodies. Public consultations, expert workshops, and stakeholder dialogues provide opportunities for industry players, consumer groups, and other stakeholders to contribute insights and feedback on regulatory proposals, ensuring that policies reflect diverse interests and perspectives.

4. Safeguards and Protections: Safeguards and protections are essential mechanisms for safeguarding user rights, promoting trust and confidence in digital platforms, and mitigating potential harms arising from platform activities. Regulatory frameworks establish rules and standards to protect user data, ensure fair competition, combat misinformation, and enhance cybersecurity. In India, the Data Protection Bill in India aims to establish comprehensive data protection safeguards, including provisions for data localization, user consent, and data breach notification. By imposing obligations on platforms to protect user data and privacy, the bill enhances trust and accountability in the digital ecosystem. Globally, the EU's Digital Services Act (DSA) proposes a set of regulatory measures to enhance platform accountability, transparency, and user protection. These measures include requirements for content moderation, risk assessments, and transparency reporting, aimed at addressing systemic risks and ensuring a safer online environment for users across the EU.

In the escalating power struggle between digital platforms and nation-states, the BOSS framework offers a comprehensive lens. As digital platforms wield increasing influence over global affairs, tensions around boundaries, oversight, standards, and security intensify. The dynamic interplay between these entities underscores the need for robust governance frameworks to navigate the evolving landscape of the digital age. As we confront the complexities of this relationship, the BOSS framework illuminates pathways towards effective regulation and collaboration, ensuring that the balance of power remains in check for the benefit of society at large.

OTW

Over the Weekend, I finished reading the new book “The Everything Token“by Scott Duke Kominers. Those who follow my Managing Platform Businesses course offered at IBS Hyderabad, would recall that my course draws lot of insights from the Prof Scott’s course on Making Markets offered at Harvard Business School. The Everything Token written with Steve Kaczynski discusses the five core principles of successful NFT projects and presents the NFT Staircase- Ownership, Utility, Identity, Community and Evolution.

Talking about Web 3.0 is another new book Read Write Own- Building the Enxt Era of Internet by Chris Dixon. Is it a sheer coincidence that both these book come at the time when the waning interest into the crypto world is being rekindled by extraordinary rise of Bitcoin. Also, both the books come from partners at a16z, a leading proponent of web3.0 and related technologies.

Another highlight of the weekend was India’s 4-1 win over England in the test match series. It was an emphatic victory against a very determined English side but the experience and energy of Indian team was simply too much for the visitors.

Perhaps it is the recency effect but the DRS by Shoiab Bashir provided highlight of how English Team sleep-walked during the entire series- they did not know what had hit them!

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Shailendra