In the months before the coronavirus outbreak, numerous governments around the world enthusiastically jumped on the “regulate tech” train. Digital tax proposals, content regulation requirements, national digital spending mandates, as well as new privacy and data governance rules were viewed by many as essential to respond to the increasing power and influence of digital giants such as Google, Facebook, Netflix, and Amazon.
My Globe and Mail op-ed notes the pandemic has not only sparked a massive shift in economic and health policy priorities, but it is also likely to reorient our views of the tech sector. Companies that only months ago were regarded as a threat are now integral to the delivery of medical equipment, critical to the continuing function of workplaces in a work-from-home world, and the platforms for online education for millions of students. Billions of people rely on the sector for entertainment, communication with friends and family, and as the gateway to health information.
The companies’ response to the pandemic has also cast some of their previous policy positions into a new light. Platforms such as Facebook have long shied away from proactively removing content, yet it has proven capable of responding to coronavirus misinformation without a legal obligation to do so. Similarly, Google has been widely criticized for its approach to privacy, but it has joined with Apple to develop decentralized contact tracing application standards that are more privacy protective than some governmental proposals.
Where does that leave the future of tech regulation?
When we emerge on the other side of the pandemic, technology companies are likely to be even more powerful, amplifying the importance of regulation but with a recalibration of policy priorities.
For example, earlier this year, Canadian Heritage Minister Steven Guilbeault embraced a report that envisioned extensive regulation of Internet-based services in support of Canadian content. The policies ignored record-breaking film and television production in Canada, arguing instead that mandatory rules to support Canadian content production was needed. With billions in production spending lost to the current lockdown, the future emphasis will surely be on getting the sector up and running again with as many productions employing as many Canadians as possible, not inserting new Internet regulations that will increase costs and threaten investment.
While treating Internet companies as ATMs for pet policy objectives no longer makes sense, there are three tech regulation issues that will take on enhanced importance.
First, aggressive enforcement of competition laws will become essential to ensure a fair marketplace in which digital giants are blocked from leveraging their power at the expense of smaller entrants. Recent reports indicating that Amazon accessed sales data from third-party marketplace sellers to help develop its own private label alternatives demonstrates the competition risks associated with a dominant online sales platform. As reliance on large technology companies increases, so too does the need for vigilant attention to competition regulations.
Second, as governments grapple with ballooning deficits and search for additional tax revenues, addressing longstanding concerns over global corporate tax policies for technology companies is a must. Some have focused on digital sales taxes (British Columbia was set to implement a digital sales tax in July but has now postponed the plan), but those taxes are paid by cash-strapped consumers with companies merely collecting and remitting the proceeds.
Corporate taxes on earnings offer far more revenue potential and would address concerns that technology companies are well positioned to structure their operations to minimize corporate tax obligations. Canada is not alone in this regard, but it should encourage swift action to develop international standards to enable more equitable allocation of tech tax revenues.
Third, restoring trust in our institutions and information sources will be crucial. Large data sets involving search terms, temperature checks, and cellphone mobility have demonstrated the value of aggregated, privacy-protected data by providing advance knowledge of virus outbreaks or compliance with stay-at-home orders. Further, the response to coronavirus misinformation – while incomplete – demonstrates that Internet platforms can play a role in curbing online harms without threatening online free speech.
Data governance rules and standards for Internet platform responsibility are needed that enable the benefits that come from technologies while addressing harms and risks to ensure broader public trust. The previous polarized debate frequently placed all the blame at the feet of Internet platforms or none at all. Finding a middle ground for the benefit of the public and the technology sector will require both sides to adopt a more collaborative, less combative approach as we work toward a new normal for tech regulation.