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What is Tech Regulation in the first place…?
In the world that is powered by technology, the market is being dominated by only a few biggies in the game, for example, Google as a search engine, Facebook in social media, and so on. But, is this good or bad for the users who use these technologies…? Well, it depends on the situation. It may be useful in some cases like the users need not search for an alternative, the option would be too obvious. But, in most cases, it could be not so good, for example, the impact of Google search results on the General Elections of America, which eventually led to the election of Donald Trump as The President.
Why Tech Regulation is relevant?
Too much dominance for a single company in a field can be a threat, no matter how promising the company is. Today’sToday’s world is full of such dominant companies in various areas starting from tech giants like Google, Facebook, etc., You might be thinking that the users are entirely conscious and happy in using these applications and how could they be a threat to them…?
After all, the issue with YouTube isn’t that it consists of a lot of exciting videos —it is that it uses suggestions and search filters that lead viewers into extreme and hateful bubbles. Similarly, The problem with Facebook isn’t that they have provided a place where all your friends can be found—it is that it tries to “maximize engagement” by poisoning your interactions with hoax or inflammatory material.
In a monopolized market, sellers get to bargain by fiat. But interoperability—from ad-blocking to switching app stores—is a means by which customers can assay real counteroffers.
So, to avoid these kinds of problems, the governments usually include some rules and regulations on these tech giants to prevent them from crossing the limits. This is known as Tech Regulation. So, we can say that Tech Regulation is some regulation steps taken by the government to keep the tech giants within limits.
But does this solve the problem?
The answer is Yes and No. It works well and good in most cases. But, sometimes regulating bug technologies can even make them stronger. So, controlling big tech may not be the only solution to this problem.
Tech regulation in India
India has come a long way in terms of high technology since the first industrial revolution. With technology increasing, the need for the rule and regulations on technology also grew significantly. Let us see some of the acts that were included in the constitution of India over the years to regulate the rapidly developing technology.
- Information Technology Act: IT Act is the first and foremost legislation introduced by the government of India dealing with electronic communications in India. IT act mainly regulates the provision of online services & transactions and provides the regulatory and legal framework for these electronic transactions. This act also contains some severe penalties for various kinds of cybercrimes, while granting safe harbors to the intermediaries. The Information Technology act empowers the government to formulate regulations governing cybersecurity, intermediary liability, e-governance, and privacy, besides other issues.
- Interception, Monitoring & Decryption Rules: These rules prescribe the conditions and procedures under which the government can be able to access the content of electronic communications to prevent the commission of certain offenses, in the interest of national security, or for investigation purposes.
- Monitoring and Collecting Traffic Data Rules: These rules are related to the collection of metadata—information about the source, destination, route, duration, timestamp, etc.— of electronic communications to investigate the incidents of cybersecurity, and contain safeguards to ensure that collection or monitoring does not take place without authorization.
- The Indian Penal Code: This could be used to prevent data theft. The offenses of embezzlement and misappropriation technically apply only to movable property under the Indian Penal code. Still, the term “movable property” is defined to include corporeal property of every description except land or property that is permanently attached to the earth. So, The Indian Penal code can be stated as a technology regulation act as well because it can be used to prevent data theft.
- Website Blocking Rules: These rules mainly describe the procedure to be followed to block access to certain online information, including the process by which any individual can send a report/complaint to take down certain inappropriate content.
- Copyright Rules and the Copyright Act provide a comprehensive framework for copyright law in India, including assignment mechanisms and licensing, administration of copyright societies, grounds for infringement, registrations, and exceptions to copyright
Blockchain and Cryptocurrency regulation in India
In recent years, cryptocurrency has taken the financial world by storm. It is headed predominantly by Bitcoin, which is the reason behind the phenomenal rise in the price of the cryptocurrency. Now, these currencies allow the transactions to take place with the coins that are not related to any single country. So, this means their existence is entirely online, and their values are based on speculation. In a sentence, they are decentralized, meaning no country or central bank controls their supply or price.
Today, there are over a thousand cryptocurrencies in existence. Not just the individuals, big firms and industries are also getting into the cryptocurrency business. Recently, Tech giant Facebook proposed to launch a new global cryptocurrency called Libra. However, the rapid growth and use of cryptocurrency do not come without risks. The biggest fear is that it can be used for laundering criminal proceeds that may or may not have started as cryptocurrency in the first place. So, owing to these risks, the government-appointed panel has recommended a complete ban on cryptocurrencies in India.
The inter-ministerial committee has suggested outlawing private cryptocurrencies like Bitcoin in India. Also, they’ve suggested declaring any activities related to virtual currencies as a criminal act. The report lays down that all the private cryptocurrencies except the ones issued by the state to be banned in the country.
In November 2017, the government constituted an inter-ministerial committee to look into the legalities of cryptocurrencies and blockchain technologies in India. The high-level panel is formed under the chairmanship of the economic affairs secretary. In their report, the committee recommended a ban on private cryptocurrencies citing the risks and volatility in their prices. The group also drafted a law – “Banning of cryptocurrency & regulation of official digital currency bill, 2019.” that mandates a fine and jail up to ten years for offenses connected to cryptocurrencies. A repeat offense as per the draft law shall be punishable with imprisonment up to five years, extending to ten years with fine. The fine could be three times the loss or harm by the person or three times the gain made by the person or up to Rs. 25 crores.
In other observations, the inter-ministerial committee noted with grave concern, the mushrooming of invariably issued abroad and numerous people in India investing in them. The report said that all these cryptocurrencies had been created entirely by private enterprises. For them, there is no underlying intrinsic value of these private cryptocurrencies. They lack other known attributes of a currency, including the absence of nominal value. The report notes that since private cryptocurrencies cannot features of money/currency, they cannot replace fiat currencies.
A review of Global best practices shows that private cryptocurrencies have not been recognized as legal tender in any jurisdiction. The committee also recommends that all exchanges, people, traders, and other financial system participants should be prohibited from dealing with cryptocurrencies.
But as harsh as the committee has been on the private cryptocurrencies, it has highlighted the benefits of the underlying technology, The Distributed Leisure Technology, i.e., DLT and Blockchain. The committee has asked RBI to examine the utility of DLT-based systems to enable faster and secure payments, especially for cross border payments. It has recommended DLT-based systems for banks and other financial firms for loan tracking, collateral management, fraud detection, claims management in insurance, and reconciliation systems for security purposes. Similarly, DLT can also help remove errors, frauds in the land market if the technology is used in maintaining land records.
Does regulating big tech make them stronger?
As India is still in its early stages of Tech Regulation, let us consider a case study of Technology Regulation in America.
It is hard to find people cheering for a world that is being dominated by a few giants in every field. It is even harder to find people who think that Big Tech stands any chance of being toppled. Both the left and the right clamor for a break-up of the biggest web platforms, notably in countries like America—from the trust-busting manifesto pledge by Elizabeth Warren, a Democratic senator, to the followers of Alex Jones, a right-wing commentator, who was recently banned from several social networking sites.
Monopoly break-ups are the most disused weapons of antitrust. Like stone pyramids, they seem a relic of history, a lost art from a fallen civilization. Yet they are tough to do politically. So if break-ups belong to the past, how can society tame Big Tech? The question has fresh salience as America’sAmerica’s Department of Justice and Federal Trade Commission divvy up which agency will handle possible antitrust investigations of companies like Apple, Google, Facebook, and Amazon.
Without political faith in break-ups, modern trustbusters are operating on the assumption that Tech giants will dominate in perpetuity—and placing upon the responsibilities the state-like duties to police immoral user activities, from instigating terrorist violence to violating copyright. Yet this comes up with a new problem: complying with these rules and regulations would be so costly that only a handful of (mostly American) companies could afford it. This ceases any hope of a big incumbent being displaced by a budding competitor.
The past 12 months have seen a series of new internet regulations that, ironically, have done more to enshrine Tech giants’ dominance than the years of lax antitrust enforcement that preceded them. This will undoubtedly have adverse consequences for safety, freedom for expression, and privacy.
Bringing state-like duties for the big tech platforms into existence imposes short-term pain on their capitalists in exchange for long-term gain. Shearing off a few hundred million dollars off a company’s annual earnings to pay for consent is a bargain in exchange for a society in which they need not worry a rival growing big enough to compete with them. Google, as a search engine, can stop looking over its shoulder for another company that will do to it what it did to Yahoo, and Facebook can stop watching for some other social networking site ready to cast it in the role of MySpace in the next social media upheaval.
These responsibilities can only be performed by the most prominent companies, which all-but forecloses on the possibility of breaking up Big Tech. Once it has been knighted to serve as an arm of the state, Big Tech cannot be cut down to size if it is to perform those duties.
So, in America, the regulations on Big Tech made them stronger instead of ceasing their dominance in their respective fields. This is not only the case of America but also applicable to developing countries like India, which means that the Tech Regulation steps that are to be taken in India need to be well-thought through.
In a nutshell, India has just begun to take minor steps towards tech regulation, and there are a lot of challenges to be overcome in the future. Also, India needs to learn a lot from the developed countries like USA, Russia, and Japan and maybe adopt some of the regulations if required.