G7 digital and tech ministers discuss AI, data flows, digital infrastructure, standards, and more

On 29-30 April 2023, G7 digital and tech ministers met in Takasaki, Japan, to discuss a wide range of digital policy topics, from data governance and artificial intelligence (AI), to digital infrastructure and competition. The outcomes of the meeting – which was also attended by representatives of India, Indonesia, Ukraine, the Economic Research Institute for ASEAN and East Asia, the International Telecommunication Union, the Organisation for Economic Co-operation and Development, UN, and the World Bank Group – include a ministerial declaration and several action plans and commitments to be endorsed at the upcoming G7 Hiroshima Summit.

During the meeting, G7 digital and tech ministers committed to strengthening cooperation on cross-border data flows, and operationalising Data Free Flow with Trust (DFFT) through an Institutional Arrangement for Partnership (IAP). IAP, expected to be launched in the coming months, is dedicated to ‘bringing governments and stakeholders together to operationalise DFFT through principles-based, solutions-oriented, evidence-based, multistakeholder, and cross-sectoral cooperation’. According to the ministers, focus areas for IAP should include data location, regulatory cooperation, trusted government access to data, and data sharing.

The ministers further noted the importance of enhancing the security and resilience of digital infrastructures. In this regard, they have committed to strengthening cooperation – within G7 and with like-minded partners – to support and enhance network resilience through measures such as ensuring and extending secure and resilient routes of submarine cables. Moreover, the group endorsed the G7 Vision of the future network in the Beyond 5G/6G era, and is committed to enhancing cooperation on research, development, and international standards setting towards building digital infrastructure for the 2030s and beyond. These commitments are also reflected in a G7 Action Plan for building a secure and resilient digital infrastructure

In addition to expressing a commitment to promoting an open, free, global, interoperable, reliable, and secure internet, G7 ministers condemned government-imposed internet shutdowns and network restrictions. When it comes to global digital governance processes, the ministers expressed support for the UN Internet Governance Forum (IGF) as the ‘leading multistakeholder forum for Internet policy discussions’ and have proposed that the upcoming Global Digital Compact reinforce, build on, and contribute to the success of the IGF and World Summit on the Information Society (WSIS) process. Also included in the internet governance section is a commitment to protecting democratic institutions and values from foreign threats, including foreign information manipulation and interference, disinformation and other forms of foreign malign activity. These issues are further detailed in an accompanying G7 Action Plan for open, free, global, interoperable, reliable, and secure internet

On matters related to emerging and disruptive technologies, the ministers acknowledged the need for ‘agile, more distributed, and multistakeholder governance and legal frameworks, designed for operationalising the principles of the rule of law, due process, democracy, and respect for human rights, while harnessing the opportunities for innovation’. They also called for the development of sustainable supply chains and agreed to continue discussions on developing collective approaches to immersive technologies such as the metaverse

With AI high on the meeting agenda, the ministers have stressed the importance of international discussions on AI governance and interoperability between AI governance frameworks, and expressed support for the development of tools for trustworthy AI (e.g. (non)regulatory frameworks, technical standards, assurance techniques) through multistakeholder international organisations. The role of technical standards in building trustworthy AI and in fostering interoperability across AI governance frameworks was highlighted both in the ministerial declaration and in the G7 Action Plan for promoting global interoperability between tools for trustworthy AI

When it comes to AI policies and regulations, the ministers noted that these should be human-centric, based on democratic values, risk-based, and forward-looking. The opportunities and challenges of generative AI technologies were also tackled, as ministers announced plans to convene future discussions on issues such as governance, safeguarding intellectual property rights, promoting transparency, and addressing disinformation. 

On matters of digital competition, the declaration highlights the importance of both using existing competition enforcement tools and developing and implementing new or updated competition policy or regulatory frameworks ‘to address issues caused by entrenched market power, promote competition, and stimulate innovation’. A summit related to digital competition for competition authorities and policymakers is planned for the fall of 2023.

UK Competition watchdog blocks Microsoft’s purchase of Activision Blizzard

The UK’s competition watchdog, the Competition and Markets Authority (CMA) has blocked Microsoft’s $68.7 bn acquisition of Activision Blizzard, citing concerns about the impact on the nascent field of cloud gaming.

According to CMA, the acquisition would have given Microsoft undue power to shape the cloud gaming industry. Microsoft holds an estimated 60-70% share of global cloud gaming services. Additionally, Microsoft has significant strengths in cloud gaming, owning the leading PC operating system (Windows), Xbox, and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming). With this deal, it would acquire important gaming content such as Call of Duty, Overwatch, and World of Warcraft, thus further solidifying its position in the market.

The Guardian reported that the decision is unusual as vertical mergers (between companies that are at different stages in the production process) are generally considered safer than horizontal ones (companies that sell similar products merge, as in this case).

For Microsoft to be able to finalise the acquisition of Activision Blizzard, regulatory bodies in the UK, the US, and the EU needed to give their approval. Currently, US and EU regulators have not yet decided whether or not they will approve the agreement. Meanwhile, both Microsoft and Activision intend to appeal the CMA’s decision. Activision Blizzard and Microsoft have further warned that the decision will discourage technology innovation and investment in the UK.

Australian Competition and Consumer Commission releases new report about competition and consumer laws for digital platforms

On 11 November 2022, the Australian Competition and Consumer Commission (ACCC) published the fifth report of its Digital Platform Services Inquiry.

Regarding consumer issues, the report recommends the submission of digital platforms to mandatory dispute resolution processes and more substantial requirements to fight against scams, harmful apps, and fake reviews, among others. There is also a recommendation for new laws that would require digital platforms to, among other issues, provide processes for reporting scams, harmful apps, and fake reviews, publish review verification processes, and ensure that consumers and small businesses can access appropriate dispute resolution.

The report also proposes mandatory codes of conduct for some digital platforms and services to address competition issues. Besides the consumer and competition recommendations, the report further highlights the ACCC’s support for prohibiting economy-wide unfair trading practices.