Innovations for people? Cutting-edge practices of tech-based service providers need closer scrutiny and regulation


By CKG Nair & MS Sahoo

The Uber Files detail past episodes (2013-17), highlighting the delay even the media are facing in getting this information out to the public. Crypto exchanges are on the radar of several investigative agencies, including India’s Law Enforcement Branch, over allegations of facilitating money laundering. The common thread running through all of these episodes is how high tech players use/abuse technology to evade or circumvent laws and the radars of regulatory/investigative agencies. Technology-based service providers have been world leaders for nearly two decades thanks to the Internet revolution. First came the search engines: Yahoo, Google and Bing. Despite the claim that the Internet is a “public good”, Google has quickly become a search engine with a monopoly market share of 92% today. Later, along with mobile apps, many other service providers emerged including e-commerce, social media, ride-sharing services, delivery services, etc.

“Push a button, take a ride,” Uber said ten years ago. Now, one can get many other services from them, including food delivery. People can get anything delivered with just a few clicks through Amazon and other delivery services. With just a few more clicks, one can get a loan through loan apps or even from banks and finance companies. Social media networks instantly connect the user to everyone on the planet and Metaverse entities take you wherever you want in any form (avatars).

High technology has also conquered the world of finance. Knowledge of algorithms can help create virtual currencies such as crypto; in addition to being able to indulge in a host of other activities with him. Non-fungible tokens (NFTs) have made digital currency or art items irresistible to social climbers. New age entrepreneurs work very hard and fast to make life on Earth and beyond enjoyable and comfortable by instantly satisfying most of our desires. Poor economics principles like “demand is desire backed by purchasing power” were thrown out the window along with several innovations on purchasing power itself.

So what’s the problem? Should we all enjoy life? This is where the tech masters literally take us all for a spin – customers, employees, aggregators and agents, all of which add tremendous value to networks – are simply used as assessment tools to inflate the value of the brands. Customer queries and complaints are left to AI-based bots with pretty names to answer/solve. (Yesterday, when the first author used a credit card to renew Amazon Prime’s annual subscription for one year, the renewal for the next five years was automatically activated without even any message asking for permission. So much for the customer choice and protection). High-tech entities using boundary tools for breaching are a whole new ball game. In addition to lifting the technological veil (source code and similar rights are fiercely guarded secrets) being prohibited (like lifting the corporate veil), the use of technology to thwart regulators and other agencies makes these practices too difficult to understand, let alone reveal.

Violations and penalties are nothing new to Uber. Good Jobs First’s tracking of violations shows that since 2000, Uber Technologies (as the current parent company) has been penalized $304 million by various authorities, in addition to license restrictions/cancellations in some jurisdictions. The main violations relate to privacy, consumer protection, wages and hours, and employment discrimination, all fundamentally affecting the lives of users/people.

Big tech companies have been sanctioned in several jurisdictions for anti-competitive practices using advanced technologies such as service bundling, data manipulation, etc. In 2019, the European Commission fined Google €1.49 billion for violating antitrust laws through abusive practices. How can big tech-based services and networks lag far behind in behavior and even political manipulation? Google, Microsoft, Amazon, Facebook and LinkedIn have all faced stiff penalties for multiple violations of privacy laws, consumer protections, employment discrimination, all against the rights of people deemed fundamental. for their existence. (For more details, see the tracker at https://violationtracker.goodjobsfirst.org/).

Although these fines look large, they are rather insignificant for the offenders themselves in terms of revenue and profit. So “pay if you get caught and move faster using sharper technologies and practices” seems to be their business model. Name and shame have long ceased to be a solution in a world of “casino capitalism”, where money/wealth is everything.

Sharp business practices have been on the radar of regulators in most jurisdictions. Competition, market, communications, and financial services regulators, among others, have tried to level up to prevent and punish such wrongdoing. However, coded and enshrined business practices based on cutting-edge technology are either not fully understood by regulators or are simply ignored under the guise of innovation and business freedom. Moreover, given the global reach of these operators, action by national authorities could only have a limited impact. These entities have become too large and too complex to be regulated. This is not just the case with Uber, which is just the tip of the iceberg. It is the continued use of cutting-edge, technology-based business practices to the detriment of users, consumers, and employees, as well as the circumvention of regulations and laws that must be addressed. States and their agencies need to upgrade drastically and quickly, even to catch up. Otherwise, corporations that use technology as villains will continue to rampage, costing people and nations dearly.

The author is respectively Director, National Institute of Securities Markets and Distinguished Professor, NLU, Delhi. Views are personal.

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