Global Digital Platforms And Geopolitics

The overwhelming rise in the might of technology companies is a matter of universal concern – as much from the competition law and business policy angle as from the viewpoint of sovereign security. Already Apple, Alphabet and Microsoft have acquired prodigious market valuations (almost USD 3 trillion each) – any two taken together are substantially bigger in market cap than the Indian GDP. Financial heft enables dabbling in geopolitics using their technology enabled prowess. With the dramatic advent of Artificial Intelligence as a tech-tool and force multiplier, these companies, already in the vanguard of the AI juggernaut, are poised to play an even more commanding public role on the global stage. No doubt, these companies will benefit disproportionately. Crucially, some nations will be better positioned to harness their global impact. Should that influence regulatory outlook?

The latest debate before the Delhi High Court on whether Whatsapp’s propriety encryption systems and citizens’ freedom of expression stand compromised when government asks them to trace the origin of certain messages, is indeed a pertinent one. The question of public accountability and citizen privacy is especially relevant for citizens, as much as it is for the government. A balance needs to be struck, but the issues are more complex.

It is indeed a fact that digital companies like Facebook, Apple, Google, Whatsapp, LinkedIn, X and Instagram and even retail outfits like Amazon, Paypal, LinkedIn etc. can exercise tremendous public clout – they can guillotine anybody at any time from using their platform. This bestows huge global leverage to them – deregistration of an individual or firm can have severely adverse private, social and even financial implications on their universal credibility, credit-worthiness and mass-appeal. That is these apps’ geopolitical strength. A social network called Gab was dropped by the domain name registering platform GoDaddy because of its views – immediately thereafter others like Stripe, Medium and PayPal blocked it in succession – leading to its obliteration. The long debate over the role of Facebook in facilitating the Russians in the election of Donald Trump and then his much-hyped expulsion from X (then Twitter) illustrates the power of the digital companies over institutions, politicians, and the world at large.

If digital companies can exercise such power, should it not be natural for governments too to  have the right to exercise some control over them? Given the extraordinary network effects of technology, unless there is direct obtrusion, the only governments that have any control over digital platforms are those that have amenity power over them – those in whose geography they have their corporate headquarters and where their top management resides, making them vulnerable to physical apprehension. That also provides such governments an extra edge over other governments and their citizens. China can, when it is necessary to do so strategically, find subtle ways to influence American citizens who are hooked to Tik-Tok. Likewise, the American government can, if it so chooses, strategically influence global users of Facebook and Whatsapp.

China has been single-minded in its approach in dealing with this issue. Not deterred by Facebook’s global user base of over three billion users and several placatory visits of Mark Zuckerberg to Beijing, it has banned Facebook. Chinese authorities blocked Twitter (now X) and Google services as early as in July 2009 after the riots in Xinjiang – essentially to control communications between activists. Significantly, it has, meanwhile, encouraged domestic technology players to increase their spread and heft – Alibaba, JD.com, Baidu, Sina Weibo along with messaging platforms like Tencent QQ and WeChat, and YouTube equivalents like Tik Tok, Tudou and Youku.

It is because of this geopolitical imperative that the United States has passed a legislation seeking that Tik Tok should either be divested and sold off to non-Chinese interests within twelve months or it will be banned. Young Americans are reported to spend twice as much time on Tik Tok as on Instagram and five times as much on Facebook, making Tik Tok enormously powerful and an important playground for peddling of influence. If it is sold, who will the buyers be? They are likely to be from amongst already entrenched American digital companies like Microsoft, Apple, Meta etc. Irrespective of the outcome of the legal battle that will ensue (Donald Trump’s attempt to block the app was overturned by the judiciary in 2020), this is, on the face of it, high-handedness of a sovereign state over a digital platform. It defies the basic and touted principles of a free-market economy by forcing a company to sell off to an American buyer and freedom of speech (as embodied in America’s First Amendment.) The Chinese government, on its part, has described Tik Tok’s recommendation algorithm (for videos, books, fashion etc.) as a sensitive, private technology, much like Whatsapp’s communications about its encryption algorithms. Not surprisingly, the Five Eyes members have already banned Tik Tok on government devices.

Whatsapp is justified in arguing that end-to-end encryption keeps communications safe. This is crucial for journalists, doctors, lawyers and all those who require confidentiality. It also protects against hackers and malware. The ideal situation would be for governments to build their native capabilities that can crack the encryption algorithms when necessary without asking for blanket derogations. But that is an uphill task in this cat-and-mouse game. The issue that governments must reckon with is that there may be select sovereign entities to whom this privilege is being clandestinely granted – who may be able to milk this prodigious facility and data when the need arises – for their asymmetric geostrategic advantage.

China is no longer a congenial market for Tesla and Apple. It is a prohibited territory for many American apps from the tech giants. Now, with the latest decision about Tik Tok, the United States is an unfriendly territory for Chinese apps. It is evident that sovereign approach towards global digital platforms is increasingly pragmatic – guided less by principles of corporate, ethical or legal propriety and more by a country’s own geopolitical concerns.

How can we be certain that Whatsapp, while vehemently denying that facility to India, is not giving a more favoured treatment in de-encryption rights to another country, say the United States? And what if Whatsapp leaves India? There will be general user discomfort for a short while. But, it’s not that business will get affected for long. The world of digital technology and its network effects is such that given a vacuum new platforms will emerge and rapidly flourish. India has hitherto been able to deal decisively with China’s Tik Tok. Perhaps, not succumbing to Whatsapp’s tantrums might even be a mark of geopolitical even-handedness.

Raghav Chandra

Guest Author Former Secretary Government of India