IGF 2022 WS #396 Trade-off between Data Protection and Digital Competition

Organizer 1: Mohammad Ali Jauhar, Internet Society Youth Standing Group
Organizer 2: Veronica Piccolo, Internet Society Youth SG
Organizer 3: Shradha Pandey, Youth Special Interest Group ISOC
Organizer 4: Benjamin Chong Castillo, UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO
Organizer 5: Ruofei Wang, Internet Society; the London School of Economics

Speaker 1: Nidhi Singh, Government, Asia-Pacific Group
Speaker 2: Sofie Schönborn, Civil Society, Western European and Others Group (WEOG)
Speaker 3: Thierry Nathanael Kopia, Private Sector, African Group
Speaker 4: Matthew Prewitt, Civil Society, Western European and Others Group (WEOG)

Moderator

Shradha Pandey, Civil Society, Asia-Pacific Group

Online Moderator

Benjamin Chong Castillo, Civil Society, Latin American and Caribbean Group (GRULAC)

Rapporteur

Mohammad Ali Jauhar, Technical Community, Asia-Pacific Group

Format

Round Table - Circle - 90 Min

Policy Question(s)

1. Ensuring SMEs’ compliance with privacy regulations without costing significantly. Are there sufficient tools and mechanisms to provide incentives to SMEs that allow them to effectively compete in the data-driven market while complying with privacy regulations?

2. Reshaping inter-institutional synergies. What are the policy actions and institutional synergies needed to ensure data protection without stifling attention-based, data-driven competition?

3. Enabling interoperability to foster innovation and digital cooperation across sectors. Should interoperability be a fundamental criterion in the development of Privacy regulations to ensure cross-sectorial competitive dynamics, enable SMEs access to good-quality data, while granting maximum user autonomy?

Connection with previous Messages: This session builds on the IGF 2021 messages developed from the main track “Emerging Regulations: Market Structure, Content Data and Consumer Rights and Protection”, and specifically the followings:
Suggested underlying principles to guide policy approaches towards strengthened market competition and consumer protection include: (a) transparency; (b) global taxonomy of service providers; (c) emphasis on rights application; (d) proportionality; (e) acknowledging the complexity of platforms, content and behaviours and jurisdictions; (f) harmonization - ensuring that the Internet remains a global, unified platform that enables the exercise of human rights.
There is a necessity to strengthen the multistakeholder approach, in order to be truly inclusive and to develop effective policies that respond to the needs of citizens, build trust and meet the demands of the rapidly changing global digital environment. The most powerful stakeholders - governments and private companies - are responsible for ensuring that civil society actors are able to meaningfully contribute to these processes.

We are building upon the above message to strengthen market competition and ensure maximum empowerment of consumers through a multi stakeholder dialogue and engagement.

SDGs

8. Decent Work and Economic Growth
8.1
8.2
8.3
9. Industry, Innovation and Infrastructure
9.1
9.b
17. Partnerships for the Goals
17.10
17.13
17.16
17.6


Targets: Our proposal is linked to targets of various Sustainable Development Goals, as detailed below:
8 - Decent Work and Economic Growth.
The proposal is focused on promoting innovation and entrepreneurship, in order to contribute to the development of public policies that drive inclusive and sustainable economic growth with special focus on SMEs, without losing sight of the respect and promotion of human rights in the digital environment. We recognise that data is the gold of our time, equitable access to it would foster innovation to solve today's most pressing problems and create jobs through a welcoming scene of startups and small and medium-sized enterprises undergoing digital transformation. Exclusive access to data, by only a few companies, promotes monopolistic behaviour and we fear that such a situation will lead to stifling innovation and entrepreneurship as well as breaking the healthy and sustainable economy, violating even the human rights of consumers by not having a real choice, and the rights of small and medium-sized enterprises by not being able to compete on equal terms against large corporations.

9.-Industries, Innovation and Infrastructure.
The vertiginous advance of technology related to industrialisation brings various challenges that are largely overcome by innovation in the development of business processes. However, technological development and access to certain infrastructures can lead to market exclusion and monopoly of the "internet giants". Our proposal is linked to the creation of an enabling environment in which, through multi-stakeholder participation, incentives for industrial diversification and fair competition in the framework of data processing and the technological processes used for this purpose can be achieved through the use of tools such as interoperability.

17.- Partnerships for the goals.
This proposal is also aimed at finding a balance between the legal framework for privacy and market competition, without losing sight of the human rights of consumers in the digital environment, through the coherence of public policies that guarantee equitable, non-discriminatory and technological cooperation between the different business sectors and the establishment of mechanisms that enable the facilitation of technology, the promotion of innovation and autonomous entrepreneurship, in order to achieve sustainable development goals.

Description:

From the perspective of the protection of human rights in the digital environment, privacy regulations such as GDPR, NPDP, PIPEDA, etc., provide a comprehensive way to ensure user data privacy, by offering regulations protection tools that can be exercised by the data subject.
On the other hand, from a market perspective, such regulations pose a two-fold issue for SMEs and cross-rectorial economic cooperation and access.

First, privacy may be seen as a cost. In order to create a digital product that respects the principle of privacy by design (i.e., when data protection is built in from the earliest design stage) and privacy by default (i.e., when individuals are able to choose how much personal data they wish to share), companies have to consistently invest, which may result in a roadblock for startups and SMEs in the data-driven services market.

Secondly, and more importantly, data-driven markets are multi-sided markets, where advertisers pay tech platforms to target end-users in the most efficient way. On the other hand, end-users benefit from services at no cost, but 'pay' in attention. In other terms, the core value of digital services and products is customisation, and that implies that Big techs have to develop more invasive tools and access more data. On the contrary, by settling for less invasive tools they may end up providing sloppyer services or products, for they are dumbed down and irretrievably loses their distinctiveness. In this context, synergy should be found between market oversight and consumer data protection. A case of inter-institutional cooperation may be taken from the UK experience, where regulatory synergies between data protection and digital competition have been enhanced through the collaboration between the Information Commissioner’s Office and the Competition Markets Authority in protecting users’ data while addressing unfair competition in digital markets.

Last, but not the least, startups and new ventures do not usually have the access to good quality data, which is mostly silo-ed with Big tech firms. Privacy regulations somehow make this silo-ing effect more pronounced. To ensure innovation and healthy market competition, we need to ensure the access to quality data to startups. Enforcing interoperability will empower user’s by not getting locked in with a particular service, and in turn, it will increase market competition. The EU proposal on Data Act of 23 February 2022 (COM(2022) 68 final) is a step in the right direction and can be a good baseline to pursue better regulations to alleviate the privacy and competition tradeoff.

The trade-off between Privacy and competition is very complex and offers many opportunities for advancing digital policies but so far, this topic has remained stifled in academic circles and legislative procedures, whereas it deserves to be the subject of a broader debate involving all affected stakeholders.

Expected Outcomes

The first outcome of this session is to give a multistakeholder, cross-continental view into a topic longer discussed in scholarly circles alone. This session wants to explore new paths for policy development at the crossroad between data protection regulation and market functioning.

The second outcome will be to trigger a process of discussions, capturing the interest of the Internet governance community and putting them on a network with industry and policy experts, Scholars and young enthusiasts to encourage research, multi-stakeholder dialogue and collaboration in the area of data-driven markets.

The third expected outcome is the publication of a comprehensive report about the tradeoff between privacy laws and market competition through the lens of the multistakeholder model. We want to achieve this by having discussions on the topic in different NRIs and other similar avenues to gather a diverse set of thoughts and ideas pertaining to different regions and hopefully, we will have a very productive discussion that will give us a way to move forward during and after the IGF 2022.

Hybrid Format: We will have 1 onsite moderator directing the session and giving the floor to the speakers both on site and online. In the slots for opinions and questions from the public/audience, for each of the questions, the onsite moderator will be attentive to the physical queue and will ask the online moderator in the case of hands raised or written comments, in which case the questions will be allowed in a round-robin basis (that is, starting with the online hands and written chats, and then following the physical queue, and so on). The online moderator has the main task of maintaining the order of the raised hands and written chat, reading the questions and giving the floor to online audience speakers. That way we will achieve an equal foot between the online and on-site audience.

The session will facilitate a roundtable discussion where participants are able to ask questions and leave comments both online and onsite. For this purpose, the session will feature both online and onsite moderators who will have regular communication to keep the participants equally engaged. While the onsite moderator will hear the participants’ questions, physically attending the session, the online moderator will be keeping an eye on the questions and comments that are shared online and bring these into the discussion by communicating it to the onsite moderator. There will be a third party application for polling (such as Mentimeter) which could be accessed by both on-site and online participants. This way, the speakers and organizers will have the pulse of the audience in real time and it will shape the discussions moving forward.

Online Participation



Usage of IGF Official Tool.