Let us begin with your initial thoughts on what we mean when we talk about a social contract in the age of data?
To begin with, when we’re talking about technology — and I’m going to analyze this from the perspective of digital trade and the rules that are currently being proposed under digital “trade” agreements — the first question really is, what is it good for? Is technology there for us to become subservient to it? For us to become data production automatons in the service of private capital? Or, should technology be harnessed to improve our lives, solve climate change, create jobs, and reduce inequality? The way technology is used, whether in service of public good or private capital, depends on the rules that are set in its development. These rules depend on who is actually in charge of the rule-making. This ties in with the topic, i.e., the evolution of technology is itself closely bound with our norms and social contract.
We urgently need a lot of new rules to govern the digital sector. To take a couple of obvious examples, we need new rules on antitrust to break up monopolies; we need new rules on taxation to make sure companies pay their fair share; we need new labor rules to include all the workers navigating the gig economy.
But instead, what’s happening right now is that Big Tech is attempting to consolidate its business model by formalizing it through trade agreements. Five of the six largest corporations in the history of the world are all US-based Big Tech corporations. Their use of trade agreements, far less democratic than other channels, would allow them to organize the international economy in the future to distribute income upwards — to them. There are two types of rules they’re looking at: 1) rights to trade exercised by corporations, and b) restrictions on regulating trade that apply to governments.
Can you give us a sense of the current situation on digital trade and international agreements?
Digital chapters already exist in a lot of trade agreements. There was, for example, the recent Trade in Services Agreement that was successfully derailed by the Our World is Not for Sale network working with the Public Services International (PSI) trade unions from around the world. Unfortunately, digital trade provisions have already been incorporated into a number of trade agreements such as the Trans-Pacific Partnership Agreement (TPP) and the United States–Mexico–Canada Agreement (USMCA).
The other major concern is the ongoing effort to initiate e-commerce negotiations at the World Trade Organization (WTO). This was started by the United States, unfortunately under the Obama administration, when they hired a corporate lobbyist to develop a new set of trade rules for the United States to propose. The proponents have been pushing to get 164 member countries to agree to a new round of negotiations within the WTO for a binding agreement. Developing countries, led by African nations, India, and several others, made a heroic effort in 2017 and succeeded in stopping this. However, it did not end there. Since then, more than 80 countries — including some developing nations — have been participating in plurilateral negotiations in the WTO.
I would like to clarify here that, despite the name, what is at stake here is not e-commerce. That is a major misconception. This is not just about buying and selling things online. What these negotiations are really about is locking in Big Tech’s business model, which formalizes, for instance, exploitation of workers. Ultimately, Big Tech companies want access to an infinite supply of cheap labor stripped of their rights. The business model of Uber, for instance, is designed to pay taxi drivers less than they were earning in the market before. Besides, the model exists by pretending that drivers are contractors instead of employees. Big Tech’s agenda then is to universalize regulatory strictures that will enable this.
You pointed out that these negotiations are not about e-commerce. Could you expand on this, and talk a little more about how the current discourse around digital trade rules obfuscates the true stakes involved?
As the public continues to be harmed by wealthy corporations that monopolize control and power over technology, legislators and the public are seeing the need to ‘rein in Big Tech’. At the same time, Big Tech ― aided by governments of developed countries ― is seeking to handcuff legislators and regulators around the world and restrict regulation that is in the public interest through secretive ‘trade’ negotiations to create binding rules for the global digital economy. Under the guise of talks on e-commerce, the US has introduced proposals in the WTO that would foreclose the domestic policy space by directly forbidding many of the goals and policy tools now being considered by legislators and regulators around the world.
The digital economy rules were first drafted by lawyers of US-based Big Tech firms and represent their interests. They attempt to consolidate the power of digital monopolies, undermining the effortsto rein in anticompetitive behavior. The rules would permanently legalize Big Tech’s control over the most valuable resource, data, through its privatization and corporatization. Additionally, the policies would open up new channels for Big Tech to undermine legislators and regulators’ efforts to exercise sovereign oversight over the digital economy.
Put together, these proposals would further accelerate the imbalance between workers and corporations when it comes to capital. The corporations pushing these negotiations are some of the worst labor violators. Big Tech is also using trade agreements to consolidate tax evasion and avoidance strategies, shifting the burden of public budgets onto workers’ backs even more. The rules include bans on evidence-based pro-development policies.
Other provisions would protect Big Tech corporations from being held accountable by those who face discrimination and violence facilitated by these platforms. Global efforts to keep our democracies safe and curb disinformation, which undermines public health, would be curtailed. People’s lives and well-being would be endangered by provisions that would undermine the global struggle against catastrophic climate change. In addition, consumer product safety and the financial security of online transactions would be seriously impaired. The proposed rules would, thus, negatively impact the privacy and security of people across the world.
With so much at stake, Big Tech companies refuse to discuss these issues publicly. Instead, they want consumers and developing country negotiators to think that the negotiations at the WTO are simply meant to facilitate e-commerce or the buying and selling of products online. This gives false hope to people from developing countries who are made to believe that their exports will magically increase simply by adopting the rules. In reality, none of the real logistical and financial constraints under which small businesses in developing countries operate would be ameliorated in any way by the proposed rules. Rather, the rules were designed to vastly expand the already massive advantages held by transnational corporations (TNCs) over domestic markets globally.
You said almost 80 countries have already begun to participate in the current set of negotiations? What do you think is compelling even developing countries to enter into these talks despite the implicit dangers for their respective economies?
Outrageously, the development agencies of many developed countries including the UK, Germany, and Switzerland are financing the participation of many developing country negotiators in the talks. Also, the previous Director-General of the WTO Roberto Azevêdo, his successor Ngozi Okonjo-Iweala, and the immediate past Secretary-General of the UN Conference on Trade and Development (UNCTAD) have directly encouraged developing countries to participate in the talks, against their own economic and political interests. It is possible, of course, that some countries are attending the negotiations to learn more about the issues being negotiated without intending to endorse a final deal, but these countries are incorrectly counted as participating. Besides, we have to admit that many developing country negotiators have been trained at Northern/Western institutions and may actually believe that there could be some benefit in these rules for their citizens, or at least their wealthy constituents.
Can you say a little more about the kind of business models these trade deals are trying to lock in? What are the key interests driving them?
The first point to realize is that most of these businesses currently operate outside laws. One of the reasons Airbnb is cheaper than hotels is because they don’t have to abide by the various regulations that hotels are bound to. These include making hotel rooms accessible for people with disabilities, having certain health and safety guidelines for their properties, and so forth. Moreover, these digital corporations operate by evading taxes. Amazon, for instance, is really famous for not paying taxes. It does not have to charge taxes on the sale of books while bookstores do. This gives the company an unfair competitive advantage, which helped it become colossal.
Secondly, these platforms want to be free from legal responsibilities for any harm their platforms cause. If Facebook’s platform is used to foment violence against Rohingya Muslims, for instance, the company will say, ‘It is not our fault.. we can’t be held responsible’, and to a large extent, they have managed to keep doing this. On the flip side, they also want rights to access markets; so they don’t just want to be in your country, they want the right to be there. Under the proposed rules, the government could not prevent them from offering whatever goods and services they want. And most importantly, they want control over the data of consumers, workers, and everything else.
Given these vested interests, can you elaborate on the kind of provisions that are being proposed at these multilateral forums?
There are numerous, so I’ll focus on a couple which I think do a good job of illustrating the inherent dangers. One of these rules essentially gives foreign TNCs more rights to collect and transfer data out of a country without local access. It’s clear that the thrust is against allowing national jurisdictions a role in regulating the activities of these companies. Similarly, there are also other restrictions on government. In general, the proposed rules would ban governments from enacting significant regulatory measures in the public interest. Some of these rules have great relevance for the social contract and their impact on women. One such proposal seeks to prevent states from taxing digital trade. Another bars governments from being able to require disclosure of source code and algorithms. Yet another would ban governments from being able to hold intermediary service providers — that’s the platforms — liable for harms caused on their platforms.
The biggest goal of corporations is to ensure that the harvester(s) or collector(s) of data also owns the data and can transfer it wherever they want. So the user or consumer — who in this case is the producer of the data — doesn’t have any rights to it, and the country where this data is being produced doesn’t have any rights over the data either.
We have to take a step back to consider that the goal of these proposed rules is to give Big Tech corporations more power and profit in the world. That’s why their lawyers wrote them; that’s why the US trade representative is taking them on. But if we allow our governments to accept these rules as binding, there will undoubtedly be a huge transfer of political power from governments, people, and workers to corporations. If we read into these rules a little further, it becomes clear that the biggest goal of corporations is to ensure that the harvester(s) or collector(s) of data also owns the data and can transfer it wherever they want. So the user or consumer — who in this case is the producer of the data — doesn’t have any rights to it, and the country where this data is being produced doesn’t have any rights over the data either. This strips developing nations of their most important economic asset, which is data. That also strips workers and consumers of their own data, which they generate. This would especially impact women workers, caregivers, and micro, medium, and small enterprises (MSMEs). These rules really speak to the social contract and the government’s obligations to ensure the economic prosperity of its citizens.
You alluded to the strong link between the manner in which these proposed trade rules disrupt state infrastructures and capacities, the social contract, and how they impact women. Can you elaborate on this point a little?
There are several ways in which TNCs are seeking to use trade agreements to evade paying taxes. First, they are trying to impose tariffs (trade taxes) on not only electronic transmissions but also anything bought online internationally. This will really harm local producers compared to online businesses.
Second, the proposals seek to bar governments from requiring the disclosure of source code, including for tax software. Countries like the US review tax software source code to ensure that TNCs are not cheating on tax assessments. In this context, these companies want to do away with requirements to hold data locally, use local servers, and have a local presence, all of which are essential for countries to be able to assess taxes, ensure compliance, and hold countries accountable when they violate domestic tax rules.
Third, the proposals would enable corporations to engage in fraudulent ‘trade mispricing’ even further by allowing them to avoid paying corporate taxes. This would not only slash the contributions of corporations to the state but also, in turn, erode budgets for social services including health care, education, elder and childcare, infrastructure etc.
Allowing the largest TNCs to legalize tax evasion would deplete state revenues that are essential to fulfil the social contract. This would further disadvantage women who already face the disproportionate burden of caregiving for elders, children, and partners. Already, the Covid-19 pandemic has imposed additional burdens of social reproduction on women. These would be exacerbated under the proposed rules. Governments are now starting to recognize the importance of taxing the digital sector in order to support the expansion of social care infrastructure. This is key to the recovery of economic well-being in the aftermath of the Covid crisis.
Fourth, there’s a little known provision that would eliminate the ability of governments to require the disclosure of source code and algorithms. This is especially problematic for people of color, all marginalized groups, and particularly women, because of the way that algorithms exacerbate discrimination. If we can’t require that the source code of those algorithms be disclosed, that takes away an essential tool from our toolbox in holding Big Tech accountable for discriminatory practices.
The final provision I want to mention is that these corporations are looking to make sure that they can operate and make money in your countries but avoid all legal liability for anything that happens on their platforms. Such a law already exists in the United States in the form of Section 230 of the Communications Decency Act. Let me explain what the law says through an example. Sex trafficking in the US is a crime and newspapers are barred from carrying ads of women being trafficked. However, if the same images are posted online, the platforms can excuse themselves by saying, ‘It wasn’t me, it was a third party, so it’s not my responsibility’. And it is Section 230 that allows them to do that. In fact, there has been a huge expansion in online sex trafficking precisely because of this rule.
With ‘deep fakes’, this problem is now getting worse. People are using new artificial intelligence (AI) tools to put women’ s faces onto nude pornographic images and circulating them online. The platforms have complete immunity due to Section 230, leaving very little recourse for victims. There’s a whole lot more to explore here but this gives you a snapshot of what some of the nasty implications of the absence of legal liabilities for platforms would be.
In the face of all of this, what can activists, civil society actors, and others concerned about digital justice do to counter these developments?
Firstly, know that there are alternatives. Data can be constructed legally as a public good, and there is a lot of good thinking already happening on this front. The idea is to formulate policy in a manner where data can be used to strengthen the social contract and improve services for all citizens.
The other alternative is digital industrial development. Instead of giving all the data generated in the country to the world’s biggest corporations and getting nothing in return, governments can use the data to create jobs and more opportunities for workers and small innovative entrepreneurs.
If you are part of these negotiations, ask your government to get the heck out! Why would you be participating in something that’s so antithetical to development and sovereignty? For those in countries that are already part of it, get out.
Finally, we have to talk about opportunities for strategic intervention: what can we do? If you are part of these negotiations, ask your government to get the heck out! Why would you be participating in something that’s so antithetical to development and sovereignty? For those in countries that are already part of it, get out. If you’re not part of it, strengthen that resolve of your government not to join the talks. This is a big issue in the WTO, and it’ s going to be a big issue in the upcoming UNCTAD 15.
Finally then, if an alternative, a framework of international rules were to be conceived along the lines you suggested, what sort of digital trade policies would count as progressive? What would be the implicit social contract forged here?
Right now, the harvesters of data are trying to use ‘trade’ rules to enact a new right that allows them to claim all rights over data. We need new rules — and they may be more appropriate at the national, and not international level — that give communities, workers, producers, and states claims over the economic value of data produced by them.
Obviously, digital firms should pay their fair share of taxes for using taxpayer-funded infrastructures such as electricity, roads, broadband, and even the education system. We need an international agreement, negotiated under the auspices of the United Nations (not the OECD), on fair taxation of digital firms. This agreement should acknowledge the incredible value of the data being produced by communities and workers and in the Global South, and use these data resources to improve the social care infrastructure in the communities and states that generate them.
In addition, a just framework of international rules can help facilitate proper regulation of the digital sector. This would include an appropriate pro-competition antitrust policy ensuring that private corporations do not become so extravagantly powerful vis-a-vis workers. It would also include labor rights for workers around the world.
Furthermore, there should be proper public oversight of source code. We need proactive rules to prevent discrimination in the digital sphere; it should also include specific provisions for preventing gender, racial, disability-related, and other types of discrimination embedded within the current algorithms, which exacerbate negative impacts on marginalized women. The idea that purveyors of algorithms should have to document in advance that their products do not discriminate against marginalized groups has been suggested by Cathy O’Neil in her book, Weapons of Math Destruction.
Working together, we can make technology serve humanity instead of corporate profit. We don’t have to allow these rules to be formalized. They are not set in stone. Big Tech is trying to set them before everybody realizes the value of data, the importance of maintaining democracy and sovereignty in our countries, and how corporations usurping the control over data through binding agreements would drastically undermine that forever.
This is the first interview from our special issue on A New Social Contract for the Data Age.