March 1, 2023
TikTok Ban would repeal free speech protections
A House Committee is set to vote on their attempt to ban TikTok. The bill empowers the president to impose sanctions on any entity that operates a “connected software application” subject to the influence of China, but tries to skirt the civil liberties protections built into the International Emergency Economic Powers Act by arbitrarily redefining social media data as “not information or informational materials.” This provision targets the Berman Amendments, which allowed films, books and music to flow freely between the U.S. and hostile foreign countries since the late 1980s. These amendments provided an important bulwark against governmental and military control of information service imports and provided the legal basis for overturning President Trump’s original attempt to ban TikTok in 2020. It is telling that the politicians trying to ban an app have to engage in Orwellian definitional manipulations, like “data is not information.”
Systemically Important in India
At a recent conference organized by the newly launched Centre for Internet and Digital Economy (IPCIDE) in New Delhi, an official at the Competition Commission of India, discussed competition regulation in India which has shifted from consumer welfare to focusing on the overall platform ecosystem, including innovation, choice, terms of trade for business partners afforded by these platforms. India is considering asymmetric regulation, special obligations for intermediaries identified as “gatekeepers” or “Systemically Important Digital Intermediaries (SIDI) to address the alleged “abuse arising from cohorts of intermediaries” who interface with and reap benefits from both sides of the two-sided markets. SIDIs were referenced in the recommendations of the Parliamentary Standing Committee on Finance some of which are being worked into the mysterious Digital India Act.
The concept is not new, a payment system operated by the RBI like the Real-time Gross Settlement (RTGS) is designated as ‘Systemically Important Payment System’ (SIPS) or Financial Market Infrastructures (FMIs). RTGS is classified as a FMI or SIPS on account of its importance as a “centralized payment system for high-value transactions”. The Immediate Payment System (IMPS) and the interoperable application layer Unified Payments Interface (UPI), often championed as India’s flagship digital payments infrastructure or digital public good. UPI transactions account for more than half of all digital payments in India (2021-2022) and have increased dramatically both in terms of volume (7.82 billion) and value (Rs 12.82 trillion). UPI is not just a strategic resource for India’s domestic payments market but also a driver of its growing global ambitions. India has signed memoranda of understanding (MoUs) with 13 countries that want to adopt UPI for digital payments and the use of UPI for cross-border funds transfers has been kicked-off. Residents in Singapore and India will now be able to transfer money instantly to each other via UPI and PayNow integration. Inbound travelers from G20 countries can use UPI to make payments and Indian travelers to the UK are able to make UPI payments through QR codes. Non-resident Indians in 10 countries can use UPI for fund transfers with their international number.
Despite their growing importance, neither the UPI nor the IMPS on which it runs has been designated as a SIPS or FMI. The National Payments Council of India (NPCI) a Section 8 Company which owns and operates the IMPS and UPI has been designated as a ‘system-wide important payment system (SWIPS)’ based on the “volumes handled by NPCI and the resultant increase in the extent of concentration of retail payments under NPCI” and given the criticality of its operations, disruption to which impacts use of payment and settlement services and the goal of financial inclusion. The criteria qualifying a payment system to be designated as SIPS or SWIPS appears to be ownership of the system. As this example illustrates, it is difficult to develop objective criteria for classifying intermediaries when the goal of regulation is ill-defined.
The PNIF’s Mandate is renewed
No, the PNIF Mandate is not the name for some obscure colonial land grant in the 1740s. It stands for the Policy Network on Internet Fragmentation, an outgrowth of the UN Internet Governance Forum. The PNIF is basically an email listserv run by some grantees funded by the UN bureaucracy to organize discussion of the fragmentation issue. Most of the participants in these discussions are IGF attendees and participants. Substantively, the PNIF has not generated any new ideas about the phenomenon of internet fragmentation. Work defining and describing the geopolitical tensions pulling the internet apart was done by politically engaged academics like Bill Drake and Milton Mueller years before this network was formed. But it is good to see formal recognition of the issue by the UN system because, as Mueller argued in his book, it is the push for ‘digital sovereignty’ which is causing the fragmentation. The UN has renewed the mandate (i.e., funded) the existence of the PNIF for another year. Long may it wave. Now if only this group could actually agree on anything substantive about policy!
UK Becoming a Digital Island?
Speaking of fragmentation, with the British Parliament poised to pass the Online Safety Bill, the nonprofit that runs messaging app Signal is publicly stating that it will leave the UK rather than change its current implementation of end to end encryption (E2EE). Signal is reputed to be among the most secure messaging protocols and attracts many of its users on that basis. Ars Technica quoted a phone interview with the CEO of Signal, Meredith Whittaker, saying that ““Signal will never, would never, 1,000 percent won’t participate, in any sort of adulteration of our technology that would undermine our privacy promises.” The Online Safety Bill, however, is supposed to apply to any service or website that has users in the UK, even if it is not based in the country.