The year ahead: what I'm watching (part two)

DIGITAL POLITICS IS LIKE A CITY BUS. You wait around for ages, and then two come along at once. I'm Mark Scott, and this is a bonus (inaugural) edition of the newsletter. You can find part one here.

I am nothing but fair and impartial in my analysis. And that also goes for the memes that I include at the top of each newsletter. On Monday, I grumbled about overly-expensive Oasis tickets. So it only seemed fair to give you some Blur on Tuesday.

Ok, enough with the 1990's British music references. Here's what is on my radar for the rest of 2024.

Let's get started.

Competition

PERSONAL DISCLAIMER: I AM NOT A FAN OF BREXIT. But one thing the UK's departure from the European Union has done is to give London a chance to tread a different regulatory path, including on tech.

That's why the country's Digital Markets, Competition and Consumers Act, or DMCC, is an interesting test case for what can happen when you blend European-style digital regulation with an Anglo-Saxon pinch of pragmatism.

The legislation, passed in the final days of the last British government in May, gives the country's competition regulator new powers to quell potential digital anticompetitive behavior before it harms consumers. But unlike what Brussels is doing (more on that below), London gives its enforcers greater leeway to police Big Tech giants.

That means the UK's Competition and Markets Authority will soon publish specific antitrust rules for companies with so-called 'Strategic Market Status.' The goal is to set clear definitions for what is, and is not, acceptable for firms, as they expand into new markets or gobble up smaller rivals.

In essence, British officials will be allowed to decide what constitutes potential anticompetitive behavior for, say, Google in markedly different ways than they will do so for Amazon. Such a bespoke approach would be illegal if attempted in the US. But this one-size-fits-no-one regulation is clearly different from how the EU approaches its comprehensive digital enforcement via the Digital Markets Act.

That neatly takes us, again, across the English channel where Brussels has swiftly opened investigations into the likes of Meta, Alphabet and Apple over how they are complying with its new digital antitrust rulebook. Each company has gone about handling the probes in interesting ways, with Meta and Alphabet more willing to play ball (despite significant pain points) compared to Apple.

Yet just like the bloc's new social media laws, much still needs to be figured out beyond deciding which firms are so-called 'gatekeepers.' Here's an example. Technically, the Digital Markets Act is supposed to allow for interoperability, or giving users the ability to send posts between, say, Apple's iMessage and Meta's WhatsApp. That has created massive security and privacy challenges that will not easily be overcome.

Another problem is the politics of enforcement. Traditionally, the European Commission's competition unit, known as DG Comp, has been viewed as the first among equals, jealously guarding its enforcement mandate. Yet under the new digital antitrust rules, the bloc's tech-focused unit, known as DG Connect, also has a say in how companies are policed. Publicly, officials say everyone is playing nice. But, behind the scenes, tensions are flaring up over which unit has the final say.

In the coming months, expect more high-profile investigations and, potentially, new charges, though the initial probes aren't expected to be completed until the first quarter of next year. If I was a betting man, though, I would put good money on a final foray by outgoing European competition chief, Margrethe Vestager, before she hangs up her enforcement hat in late October.

What could that look like? A potentially blockbuster fine (most likely against Apple) before the end of Vestager's decade-long tenure.

In the US, the series of Big Tech federal and state lawsuits will continue at pace, including what remedies Google will be forced to swallow after a federal judge recently ruled the search giant had abused its dominant position.

Still, where my attention has shifted to is the eagerness of US authorities (and their international counterparts) to find a way into the policy discussions around artificial intelligence.

Even before OpenAI released its ChatGPT service to the world in late 2022, AI was already dominated by a small stable of Big Tech firms that held significant global market share in compute power, cloud storage and other basic infrastructure required to run the most advanced models. Add into that mix a series of high-profile so-called 'acqui-hires' and strategic investments, and this emerging technology increasingly looks like a closed shop.

Still, I don't think it's going to be as easy as competition enforcers think to get antitrust charges to stick against Big Tech firms on AI.

For one, companies like Microsoft have shrewdly structured recent deals to avoid any form of exclusivity — a major red flag for competition authorities. For another, the current bottleneck in the likes of AI-focused semiconductors (<<cough>> Nvidia <<cough>>) will likely work itself out as buyers seek alternatives, including those built internally.

Chart of the Week 2.0

The academics mapped which countries were home to public GPU, or graphics processing units, cloud computing — a central component in creating AI systems.

They then divided the world into 'Compute North' that developed AI models; 'Compute South' that aided local deployment of such models; and 'Compute Desert' that had no access to such infrastructure.

Geopolitics

IT'S BECOME A CLICHE TO SUGGEST the online world is in open conflict with the offline world. But you just have to look at what has happened to Pavel Durov, Telegram's chief executive, in France and what Brazil has done to X, formerly Twitter, to get a good idea of where things are going.

After decades of a laissez-faire approach to the internet, governments have finally woken up to the need for greater control. That, as a principle, isn't a bad idea. But where some see the need to impose democratic accountability on technology, others eye an opportunity to spread a more authoritarian worldview.

Into that quagmire, enter: the United Nations. The recent UN Convention against Cybercrime, which allowed China and Russia to promote efforts to silence dissenting voices online, is a clear example of where the international body potentially has done more harm than good.

No one denies that digital policymaking should be more inclusive, especially to the needs of those in Global Majority countries. But by allowing all countries (some democracies, some not) an equal say about global internet governance, the UN is shifting into shaky political ground.

Case in point: the UN's AI Advisory Board, or group of well-meaning international experts, is being positioned as the first among equals when it comes to coordinating the international governance response to the emerging technology. For me, that would be a mistake as it allows more authoritarian regimes to potentially embed anti-democratic values into what is still a nascent policy area.

No one knows who's going to win the White House in November. But one thing is for sure: the EU-US Trade and Tech Council, in its current format, is no more. (Alas, no more trips to Luleå, Sweden.) That biannual meeting between European and US officials helped to rekindle the transatlantic tech and trade relationship after it had soured during Donald Trump's administration. But the question then becomes: what next?

Officials in both Washington and Brussels want to find ways to work with each other, but — again — a lot will depend on who wins the US election. Given how both Republicans and Democrats view China, though, we'll at least see more (muted) coordination on potential export bans and other trade-related tech issues after Ursula von der Leyen, the returning European Commission president, made her China hawk credentials crystal clear.

How US officials, from any political party, respond to Europe's ongoing digital enforcement (most notably on content moderation, competition and artificial intelligence) will also shape the transatlantic relationship.

There's a misconception, domestically, that American policymakers are out to get Big Tech. But, if you talk to non-US officials, you'll soon realize that parts of the federal government — when dealing with international counterparts — are very much wedded to promoting US business abroad. There's nothing wrong with that. It's just a reality.

On a more positive note, the AI policymaking world will turn to France early next year when the country's president, Emmanuel Macron, hosts the so-called "AI Action Summit." It's the successor to AI Safety summits, held in the UK and South Korea, respectively, though the French are keen to use the global gathering to showcase a Gallic (business-friendly) twist on artificial intelligence.

With the 2024 global year of elections now three-quarters over, policymakers must now figure out how much, if anything, did digital tricks and online interference affect voter outcomes. Let's leave aside the over-hyped threat from AI to focus on global digital disinformation campaigns from China, Russia and Iran.

These authoritarian regimes continue to target audiences, worldwide, though each prioritizes different aims. For Russia, it's all about Ukraine. For China, it's all about promoting the Chinese Communist Party. For Iran, it's all about attacking Israel and the US. The countries also approach audiences in developed countries significantly different than those from the Global Majority.

Yet for Western policymakers seeking insight from this year of elections, one thing is clear: the problem is domestic, not foreign. Authoritarian governments have minimal impact on actual voters compared to local (political) influencers, mostly because they lack the authenticity required to break through the sea of noise that is social media.

But that's not how many officials and politicians see it, and it has skewed the policy response to over-index on foreign threats instead of domestic harm. Again, this isn't about censoring online speech. But it's about recognizing the democratic threat from digital actors is overwhelming from within, not outside, a country's borders.