Intergovernmental Group of Experts on E-commerce and the Digital Economy (Third Session)

Session: 27

3 Apr 2019 - 10:00 to 13:00

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Report

[Read more session reports and live updates from the UNCTAD E-commerce Week]

Ms Shamika N. Sirimanne (Director, Division on Technology and Logistics (DTL), the UN Conference on Trade and Development (UNCTAD)) opened the session by stating that in today’s discussions there are still gaps with regard to access to data, how we can generate thought leadership, and how we align the trends of data growth with inclusive prosperity. The relation between data and digitalisation for sustainable development goals (SDGs) will be addressed in-depth during the session Commission on Science and Technology for Development (CSTD) that will be held 13–17 May 2019 in Geneva, Switzerland.

She then considered that we can increasingly appreciate the value of data for the economy as we daily witness examples of how data can be monetised. She explained that the current challenges of a ‘data-driven economy’ are threefold. First, the current regulatory framework for data protection is highly fragmented. She underlined the potential of data flows for the growth of the digital economy, and in particular for the work of small and medium-sized enterprises (SMEs), and thus warned against overly restrictive regulations. The existing challenge lies in the compatibility among these different legislations. A current trend is represented by some countries (such as Brazil, Thailand, India and Japan) that strive to adapt national legislations to the EU’s General Data Protection Regulation (GDPR) as European countries are their main economic partners.

Second, there is the need to develop internationally agreed-upon data protection rules to create a coherent legal environment. She referred to a study by UNCTAD (Data Protection regulation and International Data Flows, 2016) where eight main principles granting data protection could serve as a starting point for discussion.

Third, security should also be taken into consideration. UNCTAD’s CyberlawTracker portal maps data protection and privacy legislations worldwide. To grant effective protection of an individual’s data, four pieces of legislation need to exist: privacy, cybersecurity, consumer protection, and e-transaction rules.

She then stressed the importance of cross-community dialogue, in particular between trade experts (who have broad knowledge of commerce issues) and internet governance experts (who fully understand the intricacy of the interplay between commerce and technology).

She concluded her presentation with two considerations on platforms and taxation. Existing online platforms have monopolistic tendencies and e-commerce will increasingly be a platform-based economy. She thus urged competition authorities to revisit competition policies as data will increasingly play a role in the determination of market power. She also considered that digitalisation can weaken the traditional concept of taxation as companies can make profits in places where they are neither physically based nor commercially present.

The session continued with statements from various country representatives. Some interventions focused on the importance of bridging the digital divide and the access to electricity as ‘discussions over data and Artificial Intelligence cannot be dealt with without basic access to the Internet and stable energy supply’. Such statements were further complemented by the call to develop tailored capacity building programmes that particularly help developing countries to harness digitalisation and bridge the data divide. In this regard, UNCTAD’s ‘e-Trade for all’ initiative was praised as a positive example of fostering partnerships and multistakeholder discussions.

Other speakers drew attention to  competition and taxation issues raised by the Chair and called for additional regulation in three areas: the ownership and pricing of data (since ‘data is the basic raw material for e-commerce’), the cross-border flow of data, and taxation.

Mr Nandan Nilekani (Chairman of the Board, Infosys) considered different approaches to data. In the case of the United States, the main goal is the monetisation of data, and the existing legal framework allows states not to be directly responsible for what is hosted on US platforms. In Europe, the model is more protective of consumers through privacy regulations (such as the GDPR) and it ensures the rule of governments. In the case of China, mobile Internet has become the main paradigm and the concept of Internet sovereignty has been introduced. China has created a local firewall that supports local businesses (such as Tencent and Alibaba) and it is currently a leader in digital payments thanks to WeChat and Alibaba’s services.

Lastly, India’s model is closer to China’s with one difference – the government is trying to develop a data empowerment architecture where data (derived from the footprint created by the use of mobile data) can facilitate the lives of Indian citizens. This is the case, for example, with the Aadhar system where each citizen receives a singular ID (authenticated with biometric data) which then allows data portability across different government’s platforms.

Mr Sebastian Rovira (Economic Affairs Officer, Economic Commission for Latin America and the Caribbean (UNECLAC)) illustrated the regional dialogue mechanisms in place to discuss the digital economy. He said that e-trade has become increasingly important not only globally, but also regionally. However, there are still barriers to cross-border data flows such as local storage, local processing, and illegal flows of data, with the consideration that intra-regional flows are still highly underutilised. Goods are often flowing intra-regionally, but especially in Latin America, cross-border flows, and e-commerce in particular, have not yet fully picked up on these dynamics. To overcome these challenges, human capital, regulators, infrastructure for logistics, and payment methods need to be improved.

Ms Malavika Jayaram (Executive Director, Digital Asia Hub) started by considering that there is a tendency to look at people as data points (i.e., data rich), but these images give the false impression that these people are actually somehow benefitting from this richness when actually they are not. Moreover, she affirmed that we should stop looking at data as an ‘arms race’ but start looking at privacy as a competitive advantage. She then considered the problem connected to the use of data in the case of artificial intelligence (AI) where most of the datasets are not necessarily diverse, mostly come from Western countries, and leave large parts of the population out of the picture. Hence, there is more work to be done towards inclusivity.

 

By Marco Lotti

 

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