Date: Aug 31, 2018 Source: The Daily Star Taming the tech monster: What to do about the digital ‘big five’ Guy Verhofstadt When Facebook CEO Mark Zuckerberg appeared before the European Parliament in May, he boasted that his company pays tens of thousands of moderators to scrutinize, review, and – if necessary – remove abusive Facebook posts. Apparently, these so-called cleaners, furnished by outsourcing firms in India and elsewhere, are the hidden power deciding what may and may not appear on the platform.Zuckerberg offered this information with the hopes of reassuring us, but his testimony had the opposite effect. The idea that multinational companies like Facebook now determine what people see online is both preposterous and dangerous. Such privatization of our civil liberties is unprecedented. The Catholic Church may have wielded near-absolute power over the availability of information during the Middle Ages, but at least its adherents recognized it as a moral authority. Zuckerberg is nothing of the kind. Owing to Facebook – and to social media generally – the speed with which news circulates has grown ever faster, and yet free and unbiased access to it has increasingly been attenuated. If you walk up to a sidewalk news kiosk, you will find “left-wing” satirical magazines like Private Eye and Charlie Hebdo displayed next to “capitalist” publications like the Wall Street Journal and the Financial Times. But if you look at your Facebook news feed, you will see almost only stories that reinforce your own political views. Of course, Zuckerberg claims that Facebook has “third-party fact checkers” who identify “news that is probably false,” and who can “pin something to the story and show people more [similar] content [from other news sources].” But one is left wondering who these fact checkers are, what criteria they use to determine a story’s veracity, and what algorithms they use to select alternative news sources. Coded DystopiaThe world that Zuckerberg has created is starting to look like a combination of George Orwell’s 1984 and Aldous Huxley’s Brave New World. In 1984, a central authority controls public discourse within a totalized system; in today’s digital world, it is controlled by one company with a near-monopoly over the distribution of news online. To be sure, Zuckerberg would say there are alternatives, such as Google and Twitter; but that is like a monopoly carmaker telling us that we can always wait for the bus or go by foot. Likewise, in Brave New World, science and technology determine human thoughts and behavior, rather than humans deciding on the direction of science and technology. And, as Jamie Bartlett of Demos shows in The People vs. Tech, the digital quantification of our daily lives is directly at odds with the functioning of democracy. In a world where algorithms determine all outcomes, politics no longer exists. But this problem goes beyond Facebook. All of the major Silicon Valley firms – including Alphabet Inc. (Google’s parent company), Apple and Amazon – have adopted business models with the potential to undermine democracy, and privacy along with it. The hoarding of personal data for the purpose of selling targeted advertisements is rendering democratic electorates increasingly vulnerable to populist and demagogic manipulation. ROBBER BARONS, THEN AND NOWThe only way to stop this disturbing trend is to revolutionize the internet itself, by giving it back to ordinary users – which is to say, citizens. One option, the journalist Nick Davies notes, is to nationalize giants like Google and Facebook. But that cure would be worse than the original illness. In countries such as China and Turkey, where social media are tightly controlled by the state, there is even more disinformation and censorship than under private monopolies. Moreover, the last thing we need is one big public social media giant. On the contrary, we need far more competition, so that citizens have more choices about where to store their data and under what conditions. Historically, ensuring fair and healthy competition has always been a good recipe for solving problems in a market economy. By 1900, John D. Rockefeller’s Standard Oil had become the gatekeeper to the energy market in the United States, which was bad for consumers and industry alike. So, in 1911, the U.S. government forced the company to split into 34 “Baby Standards. Some of its successor companies, such as Chevron and ExxonMobil, are still around. The breakup of Standard Oil set the stage for similar antitrust actions against IBM, Kodak, Microsoft, Alcoa, and other monopolies throughout the 20th century. In 1982, AT&T was forced to relinquish its control over the Bell System of local telephone operators across the U.S. and Canada, and the Bell System itself was broken up into numerous “Baby Bells.” It is to that sweeping act of government regulation that we owe much of today’s tech revolution. In other words, there is no historical reason to think that breaking up the digital giants would be bad for the economy. If anything, it could spur a new wave of innovation. So, why is there no momentum toward the kind of proportionate government action that we saw in the oil and telecom markets? RETHINKING ANTITRUSTFor Americans, there seems to be little interest in disrupting a hugely successful domestic industry; and for Europeans, there are no instruments to do so. Moreover, U.S. and European competition laws were created for the analogue industries of the 20th century, not for the digital economy of the 21st. In the U.S., prevailing antitrust policies were shaped in the 1970s and 1980s by figures like the conservative jurist Robert Bork and the economist Aaron Director of the University of Chicago. Bork and Director argued that economic efficiency, not a firm’s size or market position, should be the paramount goal of antitrust law. By their reasoning, antitrust actions are unwarranted if a monopoly or near-monopoly does not gouge consumers with higher prices. This principle now provides cover for Facebook, Google and Amazon, each of which delivers tremendous benefits to consumers. The problem is that because these tech giants’ “core business” tends to treat users as the product, not the customer, they have also acquired enormous amounts of personal data. Thus, whatever type of services these firms offer is largely irrelevant next to the real issue at hand: the concentration of control over personal information. For example, the problem with Facebook’s acquisitions of Instagram and WhatsApp is not that these firms were among its biggest competitors. It is that by purchasing them, Facebook was able to amass even more personal data, and thus proprietary insights into the lives, preferences, passions and desires of millions of people. As a result, Facebook now offers an unrivaled platform to advertisers and others hoping to profit through psychological manipulation. Its service is perfect for populist and illiberal politicians seeking to win power through fear and calumny, rather than on the merit of their ideas. The power that the tech giants derive from our personal data is no different than the power that Standard Oil and AT&T once wielded through monopoly control of oil supplies and telephone lines. If the U.S. will not take action against the personal-data monopolists – or if its current antitrust framework prevents it from doing so – then it is all the more important the European Union step up. While the EU has already taken bold steps in this direction by adopting the General Data Protection Regulation, we still are unprepared for the digital world of tomorrow, because we lack a digital single market. Today, if young software developers want to launch EU-wide apps, they have to get approval from 28 separate national regulators, while also securing contracts with more than 100 telecom operators. It is little wonder that the “big five” tech firms – Alphabet, Amazon, Apple, Facebook and Microsoft – are all American, and that none of the world’s 20 largest tech firms are European. Until it extends its single market for chocolate, beer, and cars to digital goods and services, Europe will continue to lag behind, and Silicon Valley will not have to worry about competition from the EU. But to extend the single market, Europeans must be ready to replace their national regulators with a single EU-level agency on par with the U.S. Federal Communications Commission. THE PROMISE OF DECENTRALIZATIONMore broadly, we need to start envisioning an entirely new kind of internet. The goal should be to build a decentralized system that is based not on server farms owned and controlled by California-based monopolies, but on the millions of computers and devices currently in use today. One model for decentralization is blockchain, a distributed digital ledger that publicly records transactions across many computers, and which requires a consensus for any new information to be added. In other words, blockchain verifies and secures data without the need for a big central intermediary such as a bank, registry, or government. Many of blockchain’s advantages are obvious. The technology restores trust in the exchange of data and makes hacking and manipulation exceedingly difficult. Because it bypasses traditional intermediaries, it has the potential to eliminate the transaction costs of documenting or executing contracts, financial transactions, property titles, land rights, and so forth. A decentralized internet would also enable individuals to control and even monetize their data, along with other digital creative products such as photography, videos, art and music. As their creations’ sole copyright holders, users would be in a position to transact directly with others, rather than surrendering some share of their earnings to a traditional platform. Of course, there is plenty of skepticism about blockchain, and particularly about blockchain-enabled cryptocurrencies like bitcoin. But the question comes down to whom you should trust. On one side are big incumbent institutions such as the banks that precipitated the 2008 financial crisis; on the other is a decentralized system in which innumerable partners check each other. In the latter case, there is no need for Big Brother or Facebook “cleaners” slaving away somewhere in India. Instead, an organic collective of users would exercise control, not unlike how Wikipedia operates already. Would a radically decentralized internet automatically eliminate the digital world’s dark side and put an end to money laundering and other criminal operations that use cryptocurrencies? Of course not. But it is worth remembering that cash is also used in all kinds of illicit transactions, and we don’t blame central banks for that. Given the status quo, blockchain could improve matters considerably, especially if it is complemented by quantum computers that empower public authorities and law-enforcement agencies to track abuses of encryption and illegal activities. EUROPE’S CHALLENGEThere is no time to lose. The world needs a new internet, and Europe, in particular, needs a new digital strategy – one that is not simply copy-pasted from the American model. One option could be to make blockchain the new standard for all digital activities within the EU. Ideally, government agencies and businesses would replace old bureaucratic ledgers and practices with secure decentralized technologies, and a new generation of digital businesses and competitive markets in personal data would emerge. To enable this to happen, the EU needs to launch two more investment programs on the level of the Galileo Global Satellite Navigation System: one for advancing developments in artificial intelligence, and another for quantum computing. Given the time it will take for these investments to bear fruit, the EU also needs to address the immediate challenges of the old internet age. Most urgently, we must protect our elections from foreign cybermeddling. That starts with identifying the foreign agents who are active on European social media platforms, as well as the extremist politicians with whom they are colluding. In the U.S., where Deputy Attorney General Rod Rosenstein appointed Robert Mueller as special counsel to investigate Russian interference in the 2016 presidential election, dozens of indictments have already been handed down. Europe needs to catch up, not least by establishing its own special prosecutor to investigate and stop Russian disinformation campaigns and other attacks on our democracies. Second, we need to update our election laws for the digital age. Most were written at a time when political campaigns relied on paper leaflets and billboard advertisements. Today, the battle for voters’ support is waged on the internet, and it has become easier than ever for malign actors to manipulate the process. Third, we must hold social media companies responsible for the political content published on their platforms. Every political advertisement should have a digital “imprint” disclosing clearly who paid for it. And platforms that do not comply should face much bigger fines than they have in recent years. But data-protection agencies also need to bring more intensive scrutiny to bear on fake-news distributors, bots and trolls, as well as the algorithms that allow them to reach larger audiences. To that end, the relevant agencies should appoint “accountability officials” charged with policing the major social media platforms, particularly before and during elections. Finally, we need to launch campaigns to educate the public on the use of privacy settings, ad blockers and other digital safeguards. That was one of the recommendations to come out of the British House of Commons’ Cambridge Analytica hearings earlier this year. It stands to reason that if we want to put the internet back in the hands of the people, they will need the digital literacy to manage it. Simply knowing how to create a Facebook account no longer suffices. Citizens in the 21st century also need at least a basic understanding of how the internet functions. All told, the digital strategy outlined here will require a transfer of power from Europe’s national governments to EU institutions. That is always a difficult proposition in European politics. But Europeans must come to terms with the fact that in the digital era, nation-states can no longer go it alone. After all, digital technologies know no political borders. On the contrary, their very power derives from their ability to transcend boundaries and collapse space and time. Only a unified Europe can match that power and help us move past our current age of digital dysfunction, and toward a new model. The real question is whether we are up to the challenge. Guy Verhofstadt, a former Belgian prime minister, is president of the Alliance of Liberals and Democrats for Europe group in the European Parliament. THE DAILY STAR publishes this commentary in collaboration with Project Syndicate © (www.project-syndicate.org).   A version of this article appeared in the print edition of The Daily Star on August 30, 2018, on page 7.