Online Regulations in England and Australia

Everyone in technology, even as far down the value chain as EDA and semiconductors, should understand the implications of how the technology they work on is being used upstream—in particular, how technology interacts with the social and legal environment. A big one (in the US) is what does "unreasonable search" mean in the smartphone/cloud era? Who gets to use strong encryption? What does it mean when the laws are different in every country, but so much technology is global in scope?

Since I'm British, I'm aware that last Monday the British Government released a white paper, an early-stage discussion document prior to regulation Online Harms (100-page PDF). I planned to write an update to my post last year "GDPR Is an Enormous Regulatory Own Goal" about it. In that post, I speculated that the EU would not pass legislation including article 13 that made content providers responsible for policing all content, with penalties for letting anything through. Regulations like this, that I think European politicians think is hobbling tech heavyweights (since none of them is European), actually entrench the heavyweights since they make it so expensive for everyone else.

Anyway, I was wrong, and the EU did pass the regulation including article 13. To make matters even more complicated, it is not a European law, just a directive, so each European country individually has to take the directive and implement the law in their own parliament (or equivalent), meaning that the details will be different all 28 countries (27 in the seemingly unlikely event Britain's politicians get their act together).

I was also aware of similar regulation just passed in Australia earlier this month, that makes absolutely everyone in the value chain responsible for "abhorrent or violent content". While castigating Facebook and YouTube for sensitive content is one thing, it also applies to any cloud providers if anyone uploaded it to a site hosted there, or to the ISP anyone used. Who knows if Intel or the company that made the phone used count as part of the value chain?

Before I got as far as writing this, Ben Thompson of Stratechery wrote a piece, A Regulatory Framework for the Internet where he talks about these recent developments:

GDPR has certainly increased the number of website click-throughs; it has also strengthened Facebook and especially Google’s competitive position exactly as predicted.

The European Copyright Directive, specifically Article 13, makes platforms liable for copyright violations, and while the European Parliament took care to state that this wasn’t a requirement for a content filter, there is no other viable solution. Content filters are not only extremely difficult and expensive to develop (Google has spent $100 million plus on ContentID), entrenching the largest players that have the resources to fund development and the leverage to pay for it, they will also necessarily be overly strict, limiting user expression.

Even more egregious than the Copyright Directive, amazingly enough, is Australia’s new law about “abhorrent violent material”... Companies are liable if such content is discovered on their service period — being told it exists is sufficient evidence of recklessness — and worse, every company in the stack is liable, from ISPs to cloud providers to social networks. That leaves no choice but to spy on all user traffic or, for small-and-medium-sized platforms outside of Australia, avoid the country altogether.

Going back to the British white paper, as Toby Young in The Spectator pointed out in a piece called iPlod: Sajid Javid’s new internet rules will have a chilling effect on free speech:

As Sajid Javid [the Home Secretary, maybe equivalent to the US head of homeland security] was proudly proclaiming that Britain would have the toughest internet laws in the world, it emerged that a British woman had been arrested on a trip to Dubai and faced up to two years in prison for describing her ex-husband’s new wife as a ‘horse’ on Facebook. So does the Home Secretary want the UK to have tougher internet laws than the United Arab Emirates?

The big problem with all of these laws in general, and the British one in particular, is that they are trying to define something very narrow: content that is objectionable but not already illegal. Usually, again like the British one, the regulations come with ridiculous penalties such as 4% of worldwide revenue. Google's revenue was $137B in 2018, so that would be over $5B. The title of the white paper is, as I said, Online Harms, but nowhere in the document is "harm" defined. There tends to be a bait-and-switch to this sort of regulation, too, where the examples provided are always outside that narrow window and already illegal. The document uses the term "unacceptable content" but never defines it. So it will be illegal to publish unacceptable content that might cause harm...without defining either unacceptable or harm. And note that "might"—it's not necessary that it actually caused harm. If you are Google, or especially anyone much smaller, the safe thing to do is err strongly on the side of caution.

But that's exactly the problem. As usual, the British proposal is one-sided: if something is left online that should have been taken down, then big penalties. But if something is taken down that was perfectly acceptable, not only are there no penalties, there's not even a way to appeal the decision.

We already have this problem with copyright where a claim of copyright infringement, even if false, is enough to get content taken down and people's livelihoods potentially destroyed. Here's a recent example from a couple of months ago, where a guy got his whole YouTube channel shut down due to a copyright claim by Sony, despite the fact that he had a license to the music in question. It got taken down anyway. This is not an especially important case, it's just something that there is going to be a lot more of as a result of laws like this. Video is 15 minutes long with some language.

That British white paper opens with:

The government wants the UK to be the safest place in the world to go online, and the best place to start and grow a digital business.

It seems like another own-goal to me, and if this gets passed into law with vague definitions and penalties, it is probably a safe bet entrepreneurs looking to start a digital business in the UK will do so with skepticism and perhaps opt out entirely. And as for that Australian law...Australia has fewer people than Nepal or Madagascar, so the easy solution is perhaps not to bother.

And wherever you are in the tech value chain, you should be watching what your technology is enabling.

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