Digital Platform Policy Highlights - Digest 16
Summer 2023 Edition: This post outlines how digital platforms adapt their features and policies to comply with new government regulations for the stability and image of their businesses.
This post is part four of a series documenting policy changes and feature improvements introduced by platforms in Summer 2023. This is a continuation of the earlier post on external regulations.
TL;DR → Policy Changes to address external regulations include:
The struggle by China’s AI chatbots due to strict regulations
Google increasing ad transparency and data access for European researchers
China’s AI chatbots lag behind due to strict regulations
Unlike in the West, no Chinese AI chatbots had been made available to the general public (till early September) because of China’s strict regulatory environment, which imposes rules, such as algorithm vetting and data security reviews. This story mirrors the general state of GenAI in China, which has been slower than expected. China’s stricter regulatory approach to its tech sector reflects Beijing’s concerns over the excesses and misbehavior of the industry, as well as its preference to promote “hard” technologies. Nevertheless, since AI can either be a game-changer or a can of worms for us humans, China Inc’s tardy starting is a real head-scratcher for Western competitors. (link)
TikTok opens its research tool to European researchers
Prodded by upcoming legislation from the EU, TikTok has made its research software available to researchers in Europe to study its content and algorithms. The new EU rules require online platforms to be more transparent and accountable for their content. Though there is less momentum for a complete TikTok ban in the EU than there is in the US, providing access to researchers could help improve TikTok’s reputation in the bloc. That has been a key priority for TikTok, as the platform has spent over $1.3 billion to fend off such a ban from taking place. This seems to be a smart move for TikTok to minimize the threat of hard regulations beforehand. (link)
Senegal bans TikTok over stability concerns
Senegal’s authorities cited TikTok’s use by people who spread “hateful and subversive messages” that threaten the country’s stability. The ban coincides with the government’s decision to restrict mobile internet services in the context of opposition protests. The ban follows a growing political tension in Senegal with worries about throttling dissent. The TikTok block incident highlights the complex and sensitive issues of regulations, touching on privacy and political interests, while emphasizing the power of digital platforms.(link)
Meta trying to offset revenue from EU after regulations
Meta’s proposed solution is to seek consent from all its European users before showing them ads based on their activity on its apps, such as Instagram and WhatsApp. This offer to end a dispute with privacy regulators over the legality of its behavioral advertising in the EU is a significant concession from Meta, which relies heavily on personalized ads for its revenue. Meta is also considering offering an ad-free subscription for Instagram and Facebook in the EU to offset the loss of personalized tracking. In my opinion, a subscription based social media site would be a win-win for everyone involved. (link1 and link2)
Iraq blocks and then unblocks Telegram
Iraq cited the use of Telegram by people who spread hateful and subversive messages that threaten the country’s stability. The ban came after the government also restricted mobile internet services amid opposition protests. Experts opined that the pro-Iran factions will be the hardest hit by the Telegram ban, as the app was a very popular medium for propaganda for those groups. Interestingly, within a few days, the ban was lifted after Telegram agreed to disclose the sources which revealed “sensitive data of officials and citizens”. Regulators banning and then lifting the ban after “compliance” seems like a quintessential action of testing the limits and overreach (link1 and link2)
TikTok moves to comply with new EU regulations
While regulators are still figuring out the right formula to “reign-in” the digital platforms, EU’s formula seems to be a combination of financial penalties, potential consumer lawsuits, and heightened oversight by state legislators. TikTok has announced new features for European users to comply with the upcoming EU’s Digital Services Act. The features include the option to report illegal content, turn off personalized recommendations and targeted ads, and opt out of algorithmic ranking systems. As these measures will only be rolled out in the EU, the privacy groups worry about the negative externalities.(link)
India passes new data protection law
Following the approval of the 2023 Digital Personal Data Protection Bill (DPDPB) by both houses of the Indian Parliament, it received the approval of the President of India in August 2023 and was subsequently enacted. The act aims to protect the privacy and data of Indian citizens and is a landmark legislation that will set the legal framework for data protection and privacy in India, the most populous country right now. While it has been criticized for provisions such as exempting government agencies from complying with the rules, the act is one of the earliest to formally regulate international platforms from transferring personal data of Indian citizens outside of India.(link)
PayPal pauses UK crypto sales to comply with new rules
PayPal stopped UK customers from buying cryptocurrencies through its platform from October onwards, to comply with new regulations on crypto promotions. Some clauses of this regulation includes requiring crypto firms to carry warnings about the risk and stopping “refer a friend” bonuses. PayPal has been pioneering cryptocurrency transactions by aggressively rolling out new options like stablecoins tied to the dollar. The UK pause could dampen PayPal’s ambitions, as the UK was the first international market (outside the US) the company launched its crypto services in. It is interesting how the trade-off between tighter external regulations to make crypto safer (e.g., thwart the flow of illicit funds) and digital payment innovations will play out over the next few years (link)
Google increases Ad transparency and data access for European researchers
Since the GDPR, Google has been transparent to its EU users via their transparency reports, ad disclosure and labeling, and user personalization controls on ads. To comply with the EU’s new Digital Services Act (DSA), Google will now provide more details on how ads are targeted, offer more data to researchers, and report on potential risks regarding content. Many other tech giants are also actively improving their transparency and disclosure after the DSA. TikTok, for example, also now provides similar access for researchers. It seems like Google must now brainstorm fresh strategies to maintain an advertising edge within the bounds of the law.(link)
Research help from Anantesh Mohapatra and John Mai (Thanks a ton, folks!)