Box – Data sovereignty

By IT for Change [fn] Extracted from the Submission to UNCTAD's Intergovernmental Group of Experts on E-Commerce and the Digital Economy by members of the Research Network on Policy Frameworks for Digital Platforms – Moving from Openness to Inclusion, led by Anita Gurumurthy, Geneva, April 2018. The complete text is available at: [/fn]

In a platformizing economy, e-commerce platforms need to be understood not merely as marketplaces, but also as digital ecosystems that provide a new architecture for the economy. Platforms like Amazon orchestrate and control entire market ecosystems comprising providers, producers, suppliers and consumers/users. [fn] See: [/fn]

E-commerce companies bank on the data produced through their ecosystem for generating value, using such data to create the hold-all digital intelligence to completely transform the DNA of the market and attain a position of dominance. Amazon may have started out as an online book retailer, but it has become a ‘super platform’, a monopsony extending itself across and beyond its ecommerce portal to providing cloud services, a digital wallet, video on-demand service and devices. [fn] See:… [/fn]

Developing countries need to recognize that in the datafying economy, any step towards creating a level playing field for local platforms must foreground and tackle the question of data in digital trade regimes. The discourse of free data flows is premised upon the economic value of data and possibilities for innovation that a global data regime can give rise to. However, developing nations are the mining grounds for data, at worst, and the back offices or server farms for low-end data processing, at best. Even nations that have distinguished themselves as tech hubs often develop innovation products and services only to release intellectual control [fn] See: [/fn] and economic dividends to the tech giants of the global North. Thus, the free data flows discourse disregards the unequal footing [fn] See: [/fn] on which ‘intelligence rich’ and ‘intelligence poor’ nations compete.

Fostering local platforms is not about simplistic fixes that come from pre-digital thinking. Data sovereignty and control over data of critical sectors is vital for businesses and governments in the global South so that they can truly benefit from possibilities in e-commerce/ digital trade. Public support is necessary to catalyse and enable local market ecosystems in which small and marginal players can compete. This involves not only creating open and public data sets that are available for public and commercial uses, but also support in the form of public digital intelligence infrastructure.

Moreover, an agile legal and policy framework to curb platform excess is the need of the hour. The global South risks becoming an unregulated innovation playground for technology giants to experiment in if adequate and comprehensive policy measures are not developed that can govern their operations. Critical policy frontiers such as labour, consumer protection, privacy, foreign investments and other areas that directly impact the livelihood rights of citizens and platform users cannot be conceded to immediate short term gains that big platforms often usher in.

Dubious contracts, Terms of Service and privacy policies emanating from platforms should not do the heavy lifting for state developed well-rounded policy frameworks. Mandating that platform companies share some of the data they collect with public agencies in key sectors is important for curbing their anti-competitive practices and promoting the space for smaller local start-ups or innovators to use these data sets for coming up with their own innovative niche products.