Europe postures with standards leadership still on the line

European standards organization ETSI has released a report demanding the continent take a leadership role for standards and regulation in the global digital economy.

While some might question whether the sluggish Brussels bureaucrats can get up to speed quick enough, there is hope; regulators around the world all share the same track-record when it comes to the painfully slow progress of creating regulatory and legal frameworks.

The report, commissioned at the request of ETSI, was authored over the first-half of 2019 and demands Europe take the lead on creating the standards necessary for a healthy and progressive digital economy.

“Our competitors are very serious about taking the lead in digital transformation,” said Carl Bildt, Co-Chair European Council on Foreign Relations.

“It is important that EU lawmakers put standardization at the centre of EU digital and industrial strategy. Otherwise Europe will become a rule taker, forever playing catch-up in the innovation, production and delivery of new digital products and services.”

Although many would want to see a collaborative, geographically-neutral, approach to standardising the digital economy, this is unlikely to happen. As Bildt highlights above, someone will take a leadership position, standards will gain acceptance, before other regions will have to adopt the rules.

The question which remains is whether Europe, the US or China will have the greatest influence on global standards. In fact, ETSI questions whether Europe is keeping pace with leaders today or whether its influence is waning already. Unfortunately, with the platform economy gaining more traction each day, this is one area which should not be considered a strength of the bloc.

46% of platforms with a revenue above $1 billion are based in the US and 35% in Asia, while Europe only accounts for 18%. These platforms often drive their own ecosystems and have largely been self-regulating to date. This is going to change in the future, though to give European organizations a chance at capturing growth, the European Commission might have to lead the charge to create open-standards. The contrary approach might only offer the established players greater momentum and influence.

This is perhaps the risk which is emerging currently. The idea of globalisation and open-standards are not new, though there is evidence certain markets are heading towards a more isolationist mindset and regime.

Although it is easy to point the finger at aggressive political leaders elsewhere, the report demands Europe look intrinsically also. The European Commission has to take a strong leadership position across the bloc, as with 28 members states there is risk of fragmentation. It only has to be slight variances to start, but this could snowball into greater complications. The digital tax conundrum is an example of what can go wrong over an extended period of time.

This report might be more of a generalist statement to encourage a proactive mindset from European bureaucrats, though there are plenty of examples of governments, public sector administrations and private industry trying to control the tone.

Looking at the ever more influential world of artificial intelligence, the number of feasibility, standards and ethics boards is quite staggering. All of these initiatives will want to create rules and frameworks to govern the operation and progression of AI, though only one can be adopted as the global standard. Regional variances are of course feasible, but this should not be deemed healthy.

In the UK, the Government created its AI Council. The European Commission has released various white papers exploring how AI should be governed. The White House’s National Science and Technology Council Committee on Technology is also exploring the world of AI. Facebook has even created its own independent advisory panel to aid the creation of standards and regulation.

Should Europe want to control the global standards process, it will come up against some stiff competition. The power and influence of the US should not be underestimated, it is home to some of the worlds’ most recognisable and profitable brands after all, while China has a track-record of flooding working groups at standards organizations. This will have a noticeable impact on the final outcome.

That said, the success of GDPR will offer hope.

Europe’s General Data Protection Regulation might have caused headaches all around the world, but it has set the tone on the approach to privacy, management of data and the influence of the consumer. Since its introduction, several other countries, India and Japan being two examples, have been inspired by GDPR to introduce similar regulation, while there have been calls in the US to do the same also.

This piece of regulation was critical to ensure the European principles of privacy are maintained moving forward. This is a win, but there are still battles to be had when it comes to AI, security, encryption, cross-border data flow and access to data.

Standardisation might not be the most exciting topic to discuss in the TMT world, though taking a leadership position can offer advantages to the companies who call that region home. A thorough and innovative regulatory regime can open-up new markets, ensure competition is healthy throughout the ecosystem and drive national economies at scale.

The regulatory landscape is set to undergo somewhat of a shift over the coming months and years, though which region will take the lead is still hanging in the balance.

Presidential hopeful criticizes lack of tech knowledge in US Government

Senator Elizabeth Warren has launched a Twitter tirade to blast Government officials who are seeking regulatory advice from those who will be subject to the stricter regulation.

Although understanding the consequences of new regulation from those who would be deemed most impacted in a sensible way to operate, it does appear Warren believes there is too much reliance on outside sources.

Critics of government agencies and regulatory officials will be quick to raise a glass. For some, the competency of bureaucrats is woefully lacking when it comes to understanding the nuances of the technology industry. This is perhaps understandable, the segment moves at a remarkable pace after all, however it does create the difficult regulatory landscape where companies are free to duck and dive through the grey areas of inaction, inadequacy or a lack of progress.

“I’ve got a plan to end lobbying as we know it — but strengthening Congress’ independence requires us to do more,” Warren said on Twitter. “We must invest in resources to allow members of Congress to make informed decisions without relying on self-interested outside sources.

“My plan revives and modernizes the Office of Technology Assessment, shores up congressional support agencies, and transitions congressional staff to competitive salaries — so we can have competent public policy that actually holds big corporations accountable.”

Warren has hit the nail on the head when it comes to understanding why the chasm between the technology industry and the rules governing it is so wide; those who understand how the industry works, go work for the private sector. This is down to the salaries which are being paid, and also the work itself. Do the best and brightest in the work want to work drafting rules and red-tape, or would they rather work on creating cutting edge technologies and services?

Pumping more cash into these agencies and organizations will not solve the problem of a skills shortage, but it will address one of the difficulties.

To be fair to Warren, she is addressing a problem which plagues politics; the influence of interest groups. This is not an issue restricted to Washington, though as the US is home to some of the worlds’ most influential technology companies, it is perhaps more apparent in the country than anywhere else.

With the issue of net neutrality, the telcos threw cash at the lobbyists. And when it comes to the break-up of Big Tech, Silicon Valley began signing cheques which would make eyes water. Over the course of 2018, Google spent $21.7 million on lobbyists, AT&T spend $18.5 million, Amazon $14.4 million, Facebook $12.6 million and Comcast $15.6 million. These figures are only lobbyist spend in the US, and it is also worth bearing in mind associations would have their own spend as well.

The lobby industry is a powerful one in the US, this is not something which will change unless there is a significant upheaval, though politicians and officials could be less susceptible to it. This is where Warren is making a very valid point.

Industry should be consulted on up-coming regulatory evolution, this is only reasonable as regulation is not supposed to destroy business models, however it is important those asking the questions should have a comprehensive understanding. It will (theoretically) stop officials being misled, over- or under-compensating and aids future proofed regulation.

This will be a monumental challenge for Warren and her team, though it is a lot more achievable than previous claims make by the Presidential hopeful.

In announcing her plans to charge towards the White House, Warren also declared war on Silicon Valley. In an age where politicians are making big promises, Warren raised the stakes by suggesting the break-up of Big Tech.

Dissecting these companies is a daunting task, but it is also one which a few might question the logic of. Yes, the internet giants need to be held more accountable through regulation and greater scrutiny on acquisitions which could lead to a less competitive marketplace, however these are the companies which are driving the US economic dominance on the world stage. Weakening the positions of these companies could very well undermine the pursuit of success and open the door for competitors in other nations to mount a challenge.

However, with the announcement made via Twitter, the US Government would certainly be in a better position if more ably-minded, tech enthusiasts were on the payroll. Many criticise the sluggish nature and short-sightedness of governments, irrelevant to their nationality or location, and Warren is proposing a model to reassert the capability of the Government.

Another question which you have to ask is where the money to fund these salaries is going to come from? Either some departments are deprived, taxes are further straining, monies are borrowed, or industry is asked to contribute. The latter is the most likely, though this would give another reason for industry to line the pockets of the lobbyists.

In truth, this suggestion is a nightmare for the residents of Silicon Valley. These companies have benefitted unimaginably from the regulatory chasm, seeking profits through the introduction of new business models which traditional industry could not dream of.

Ironically, the suggestion of tackling lobbyists will probably make the whisperers and nudgers even richer.

Europe set to join the facial recognition debate

With more authorities demonstrating they cannot be trusted to act responsibly or transparently, the European Commission is reportedly on the verge of putting the reigns on facial recognition.

According to reports in The Financial Times, the European Commission is considering imposing new rules which would extend consumer rights to include facial recognition technologies. The move is part of a greater upheaval to address the ethical and responsible use of artificial intelligence in today’s digital society.

Across the world, police forces and intelligence agencies are imposing technologies which pose a significant risk of abuse without public consultation or processes to create accountability or justification. There are of course certain nations who do not care about privacy rights of citizens, though when you see the technology being implemented for surveillance purposes in the likes of the US, UK and Sweden, states where such rights are supposedly sacred, the line starts to be blurry.

The reasoning behind the implementation of facial recognition in surveillance networks is irrelevant; without public consultation and transparency, these police forces, agencies, public sector authorities and private companies are completely disregarding the citizens right to privacy.

These citizens might well support such initiatives, electing for greater security or consumer benefits over the right to privacy, but they have the right to be asked.

What is worth noting, is that this technology can be a driver for positive change in the world when implemented and managed correctly. Facial scanners are speeding up the immigration process in airports, while Telia is trialling a payment system using facial recognition in Finland. When deployed with consideration and the right processes, there are many benefits to be realised.

The European Commission has not confirmed or denied the reports to Telecoms.com, though it did reaffirm its on-going position on artificial intelligence during a press conference yesterday.

“In June, the high-level expert group on artificial intelligence, which was appointed by the Commission, presented the first policy recommendations and ethics guidelines on AI,” spokesperson Natasha Bertaud said during the afternoon briefing. “These are currently being tested and going forward the Commission will decide on any future steps in-light of this process which remains on-going.”

The Commission does not comment on leaked documents and memos, though reading between the lines, it is on the agenda. One of the points the 52-person expert group will address over the coming months is building trust in artificial intelligence, while one of the seven principles presented for consultation concerns privacy.

On the privacy side, parties implementing these technologies must ensure data ‘will not be used to unlawfully or unfairly discriminate’, as well as setting systems in place to dictate who can access the data. We suspect that in the rush to trial and deploy technology such as facial recognition, few systems and processes to drive accountability and justification have been put in place.

Although these points do not necessarily cover the right for the citizen to decide, tracking and profiling are areas where the group has recommended the European Commission consider adding more regulation to protect against abuses and irresponsible deployment or management of the technology.

Once again, the grey areas are being exploited.

As there are only so many bodies in the European Commission or working for national regulators, and technology is advancing so quickly, there is often a void in the rules governing the newly emerging segments. Artificial intelligence, surveillance and facial recognition certainly fall into this chasm, creating a digital wild-west landscape where those who do not understand the ‘law of unintended consequence’ play around with new toys.

In the UK, it was unveiled several private property owners and museums were using the technology for surveillance without telling consumers. Even more worryingly, some of this data has been shared with police forces. Information Commissioner Elizabeth Denham has already stated her agency will be looking into the deployments and will attempt to rectify the situation.

Prior to this revelation, a report from the Human Rights, Big Data & Technology Project attacked a trial from the London Metropolitan Police Force, suggesting it could be found to be illegal should it be challenged in court. The South Wales Police Force has also found itself in hot water after it was found its own trials saw only an 8% success rate.

Over in Sweden, the data protection regulator used powers granted by GDPR to fine a school which had been using facial recognition to monitor attendance of pupils. The school claimed they had received consent from the students, but as they are in a dependent position, this was not deemed satisfactory. The school was also found to have substandard processes when handling the data.

Finally, in the US, Facebook is going to find itself in court once again, this time over the implementation of facial recognition software in 2010. A class-action lawsuit has been brought against the social media giant, suggesting the use of the technology was non-compliant under the Illinois Biometric Information Privacy Act.

This is one example where law makers have been very effective in getting ahead of trends. The law in question was enacted in 2008 and demanded companies gain consent before any facial recognition technologies are introduced. This is an Act which should be applauded for its foresight.

The speed in which progress is being made with facial recognition in the surveillance world is incredibly worrying. Private and public parties have an obligation to consider the impact on the human right to privacy, though much distaste has been shown to these principles in recent months. Perhaps it is more ignorance, short-sightedness or a lack of competence, but without rules to govern this segment, the unintended consequences could be compounded years down the line.

Another point worth noting is the gathering momentum to stop the wrongful implementation of facial recognition. Aside from Big Brother Watch raising concerns in the UK, the City of San Francisco is attempting to implement an approval function for police forces, while Google is facing an internal rebellion. Last week, it emerged several hundred employees had signed a petition refusing to work on any projects which would aid the government in tracking citizens through facial recognition surveillance.

Although the European Commission has not confirmed or denied the report, we suspect (or at the very least hope) work is being taken on to address this area. Facial recognition needs rules, or we will find ourselves in a very difficult position, similar to today.

A lack of action surrounding fake news, online bullying, cybersecurity, supply chain diversity and resilience, or the consolidation of power in the hands of a few has created some difficult situations around the world. Now the Commission and national governments are finding it difficult to claw back the progress of technology. This is one area where the European Commission desperately needs to get ahead of the technology industry; the risk and consequence of abuse is far too great.