Digital Platform Policy Highlights - Digest 11
Bans, compliances, fines and regulations: The usual fare for Tech Platforms in April.
This post is part two of a series documenting policy changes and feature improvements introduced by digital platforms in April 2023.
TL;DR → This digest covers policy changes to comply with or in anticipation of external regulation. These include:
Twitter’s compliance of governmental request to block tweets
Formation of Misinformation Combat Alliance, a self-regulatory organization (SRO)
India’s NCPI issuing interoperability guidelines for the payment apps
Binance responding to the U.S. regulatory bodies
Montana’s TikTok Ban and the implications on App Stores
Montana’s legislature is showing TikTok the door, having passed a bill that would ban the app from operating in the state. Clearly, the bill reflects the growing tension between the U.S. and China over technology and data security. Another curious aspect of this move is how it will be enforced; No U.S. state has ever successfully banned apps from being downloaded on major app stores. The Montana law would impose a daily fine of $10,000 on app stores if they offer TikTok in Montana. Will this be enough to offset the money that App Stores earn by taking a cut from TikTok’s in-app revenues? (link)
China swiftly drafts rules to control the Chatbots
As noted in an earlier post, the Chinese Communist Party has already restricted access to AI chatbots. The Party has swiftly moved to draft rules, requiring AI chatbots to follow the Party’s censorship and propaganda guidelines to avoid content that harms national interests or social stability. How companies implement these rules is an interesting question. One approach could be to restrict the sources used for training the models, but that might reduce the training corpus and compromise the quality of data. Another approach could be to institute stronger guardrails post training, but this would underestimate users’ ingenuity in “jailbreaking” the guardrails and elicit forbidden responses (link)
Twitter complies with the Indian Government’s Request
Quickly responding to India’s request, Twitter blocked over 120 accounts of journalists, politicians and activists who expressed with a fugitive-now-detailed separatist leader. This is a significant shift from Twitter’s previous stance of legally challenging such demands. The reason for this change could be India’s Information Technology Rules 2021, which threatens to strip away legal protection as an intermediary for non-complying platforms. This could also be the new Twitter leadership deciding that fight is not worth it: after all, India is its 3rd largest market (after the U.S. and Japan) and consequently accounts for the 2nd highest content removal requests (after Japan) (link)
Twitter globally restricts tweet complying to the Governmental Request
In what seems to be the first instance of a global restriction, Twitter restricted a tweet from a freelance journalist that seemed critical of India’s Home Minister. Upon a legal request from the Indian government, Twitter labeled the tweet as “potentially sensitive content”. This is an unusual move by Twitter, which usually only restricts the local reach of tweets that violate local laws or regulations. One of the reasons could be the amended Information Technology Rules, 2021, which has measures to stop the flow of misinformation about the government and ensure that the Internet is safe and trusted (link)
Misinformation Combat Alliance, a self-regulatory organization (SRO)
The SRO, called Fact-Checkers Certification Council of India (FCCI) has been founded in India by Google, Facebook, Twitter, Microsoft, ShareChat, Koo, Alt News, Boom Live, Factly and Fact Crescendo and are expected to be joined by others like Snap soon. The FCCI has a stated aim of promoting high standards and best practices among fact-checkers and combat misinformation. It will be governed by an independent board of directors and an ethics committee and will follow the principles of the International Fact-Checking Network (IFCN). Responding to the Government’s regulatory move with a self-regulatory policy approach seems like a smart decision (link)
Google fined $32 million by South Korea for blocking the rival app store
The Korea Fair Trade Commission said that between June 2016 and April 2018, Google blocked video game makers from releasing their products on One Store, a rival platform in Korea. The KFTC claims that this practice hurt the revenue and value of One Store. Google denies the allegations and intends to legally challenge the decision. Korea also passed a law banning app stores from imposing their own payment systems on developers. Similar regulatory efforts are underway in other regions, such as Japan, the Netherlands, India, Australia, and the EU, as they seek to ensure fair trade. How platforms respond to these challenges and adapt their policies accordingly is an interesting space to watch (link)
India’s NPCI issues interoperability guidelines for UPI apps and merchants
The National Payments Corporation of India (NPCI) has issued new guidelines to ensure that users can pay or send money using any UPI app of their choice, regardless of who provides the QR code or UPI service for the merchant or the receiver. The guidelines come into effect on September 30, 2023, and will apply to all UPI apps and payment providers, such as PhonePe, Google Pay, and Paytm, as well as merchants who accept UPI payments. These guidelines are in line with the government’s mantra of “interoperability” as a way to promote fair competition and convenience for new generation of platform consumers (link)
TikTok fined $15.9 million by the UK for child privacy violations
The UK’s data protection authority found that TikTok allowed up to 1.4 million children under 13 to use the app without parental consent in 2020. The app was found to violate regulations meant to address fears that social media use among young children can negatively impact their mental health. This is not the first penalty TikTok has incurred for invading the privacy of its young users. The FTC fined it for a similar offense in 2019. With privacy protections getting tougher around the world, the number of future fines for TikTok is hard to predict. However, the key question is whether TikTok will be deterred from such violations by a mere $15.9 million fine (link)
Binance scrambles under the U.S. regulatory scrutiny
Binance, the world’s largest crypto exchange, faces a legal onslaught from U.S. authorities (both the DOJ and the SEC) who are investigating it for money laundering and its business practices. The exchange is ramping up its compliance efforts, hiring new compliance officials and vowing to cooperate with federal agencies to combat money laundering. The fall of FTX has attracted the attention of regulators to the crypto industry, so Binance won’t get off easy. It is intriguing to see how Binance will manage its platform governance and user experience as it tries to comply with regulations, while also protecting its users’ data and security (link)
Research help from Anantesh Mohapatra and Yiran Liu (Thanks a ton, folks!)