Small States Can Lead the Regulation Debate

In the face of global demands for data regulation, small states like the UAE, with agile governments and strong technology sectors, are poised to lead.

This article was originally published in The National under the headline “A path to sensible tech regulation runs through smaller countries” on January 28, 2020.

By Mary Ames, January 28, 2020

Source: Phipatbig/Shutterstock

Will 2020 be the year of regulation in the technology industry? All signs point to yes, but what this will entail is anyone’s guess. 

The challenge, however, is clear. Silicon Valley technology giants such as Google and Facebook have expanded into virtually every corner of our lives with little or no oversight from government regulators in the United States and beyond. 

After a series of global data scandals, demands for better data protections are impossible to ignore. The recent revelation by the New York Times that a facial recognition start-up in New York was selling access to a database of more than three billion images gleaned from public social media accounts to US law enforcement has pushed the issue into sharp focus from Berlin to San Francisco. 

Regulating Big Tech is not a straightforward process, therefore we need to be experimenting with many different approaches. Instead of relying on super-powers such as the US to draft complex data regulations, we should look to smaller countries that have growing technology ecosystems. The US state of California, which is the world’s fifth-largest economy by itself, recently enacted sweeping data protections that have impacted users across the US.

As a veritable “small country” itself, California is proving that sensible data protections enacted in one locality can have a global impact. Due to their size and the nimble nature of their legislative environments, smaller countries such as the UAE, Singapore and Estonia can provide similarly valuable guidance for this complex challenge. 

So how can lawmakers move quickly to deploy sensible regulation? Cleaning up a sector that counts its main players as among the biggest global companies by market capitalisation - Microsoft, Amazon, Google, Facebook - will be treacherous to be sure. Their interests are some of the most powerful forces in the world, and they are often in direct conflict with their users’ expectations of privacy and fair treatment.

But there are three ingredients that could protect the interests of technology consumers while ensuring innovation - the lifeblood of these companies - can flourish. You need an educated public that is actively using the latest platforms and thus understands the challenges at play. You need lawmakers who are in touch with the rapid changes taking place in the sector. Finally, you need government institutions that are supportive of technology and able to make regulatory decisions in a swift manner, so as to keep pace with the fast-moving sector. These ingredients can be found in small states with budding knowledge economies. 

There are three components to this regulation puzzle: people, governments and private companies. People are demanding action from their governments but what is happening from the private sector point of view? Fully aware that significant regulations are coming, Big Tech wants to ensure they have a hand in creating the rules that govern them and, more importantly, protect their business interests. 

Governments need to take more decisive action in protecting the rights of consumers while ensuring innovation continues unhindered. This is especially true for data-heavy sectors such as artificial intelligence (AI), which is one of the most important technologies driving innovation across industries. But Western regulatory environments are mostly slow, cumbersome and often out of touch with the rapid changes taking place in technology. 

Writing in the Financial Times on the eve of the World Economic Forum in Davos this week, Google CEO Sundar Pichai essentially asked for his company to be regulated. Mr Pichai was specifically referencing AI but his argument can be applied to the regulation debate as a whole. “Companies such as ours cannot just build promising new technology and let market forces decide how it will be used,” he wrote. “It is equally incumbent on us to make sure that technology is harnessed for good and available to everyone.”

Not all companies are as bullish about being regulated as Google appears on the surface to be. Responding to a proposal by the European Union to temporarily ban facial recognition technology in public spaces, Microsoft’s president Brad Smith compared the action to “using a meat cleaver instead of a scalpel”. 

There is no single way to regulate modern technology. We have never faced such powerful private companies that have data on virtually all aspects of our lives. Sensible regulation will arise out of a process of trial and error, which is exactly why smaller countries can lead in this area. We need to experiment to find the measures that will safeguard consumers while not stifling innovation. Such a goal is in everyone’s interest. 

So, what should be done? Pass measures that designate data as a public good and give the government a greater role in demanding that private companies adhere to better standards of data protection. Small states can and should lead the way.