Reliance could end up with digital monopoly in India

Significance Through the sale, Reliance mobilised INR1.52trn (USD20.3bn) and became a zero-net-debt company with cash to spare. This marks an inflection point in the conglomerate’s history and could transform India’s digital economy. Impacts There is little public evidence that Reliance can offer complete stand-alone 5G telecommunications. Reliance is well-placed to lead the Indian 5G market. Commercialisation of Indian customers' user data will continue to outpace rules governing their privacy and safety. The new data protection bill is designed to give the government extensive access to raw data on citizens for ‘national security’.

Subject Reform of data policies. Significance The central government is developing a new regulatory regime for data protection. The main elements likely in the regulatory push are elaborated in ‘The Personal Data Protection Bill, 2018’ (PDP bill) and the accompanying report entitled ‘A Free and Fair Digital Economy’ submitted to the government in July by the Justice BN Srikrishna committee of experts. Impacts The proposals, if implemented, would increase the state’s surveillance capabilities. New rules would also force large domestic firms to share their data, somewhat encouraging smaller entrants. The government will struggle to limit the spread of fake news and misinformation, even where these trigger violence.


Significance Such programmes contribute not only to Indonesia’s efforts to boost the cyber readiness of its booming digital economy, but are also designed to maintain China's friendly relations with South-east Asia’s largest economy amid the intensifying technology tensions between China and the United States. Impacts The Personal Data Protection Law would need to clarify key provisions and concepts to be effective. The BSSN’s extensive powers will fuel civil society concerns about excessive state surveillance. Turning down Chinese technology suppliers carries cost and wider economic ramifications for Jakarta.


Subject Live streaming and short video in China. Significance Live streaming and ‘short video’ apps have fast become mainstream in China. The international growth of Chinese-owned short-video app TikTok has generated fears in the United States that its data policies and censorship constitute a national security threat. Impacts China’s array of internet regulations make it easy for the government to find fault with a firm whose actions it disapproves of. Future laws in China will directly govern the use of the algorithms tech firms use to monitor and censor content. US politicians will be increasingly aware, and wary, of Chinese tech firms that collect data on US citizens.


Subject China's forthcoming cybersecurity legislation. Significance Public consultation has just opened on a new draft cybersecurity law. The draft's definition of 'security' includes not only technical elements but also regime survival and social stability. Impacts Operators of 'critical information infrastructure' will have to localise their user data within the territory of China. The law could provide a legal basis for retaliating against efforts to circumvent the Great Firewall. The government will support China's IT sector, considering technological independence necessary for national security. The law will place new obligations on businesses regarding protection of data privacy.


Subject Draft policy for e-commerce. Significance Estimates of the value of the Indian e-commerce sector vary between around 20 billion and 30 billion dollars, in a total IT and digital economy valued at more than 400 billion dollars. Those figures are projected to rise to 150-200 billion by 2024-25. As the volume of digital and e-commerce transactions in India’s still-nascent digital economy expands, the government is mulling regulations aimed at maximising benefits to domestic industry and economy. Impacts Government access to retail data would heighten concerns about state surveillance but may also help design better public services. Firms such as Amazon oppose protectionism but are likely to be wooed by the size and potential of India's market. Local-content requirements on inventory-based Indian retailers would boost local suppliers and employment.


Significance Modelled on Nasdaq, the Shanghai Sci-Tech Innovation Board is another step in China’s ambitions to become a global leader in the digital economy. Impacts The government will retain an active role in managing listings on the board to maintain political control and protect investors. The board will enable reduction of direct subsidies to the tech industry, addressing one source of Western complaints. Moral hazard and loose corporate discipline create a risk of incidents of fraud and mismanagement, which cannot be fully mitigated.


Subject India’s data ecosystem and reform outlook. Significance Prime Minister Narendra Modi’s second government is expected to revive its effort to enforce a new data protection framework. The draft 2018 Personal Data Protection (PDP) bill, deferred due to the April-May general elections, will be tabled afresh when the new parliament convenes from July. Impacts Policy push for data localisation and relatively open access to competing firms will not be reversed. This will be welcomed by large domestic corporates, while alientating foreign ‘big tech’. Cybersecurity of data stored by local corporates and the government will remain poor.


Subject Delays regarding the Philippines's third telecoms major. Significance The Mislatel consortium of China Telecom and local Philippine firms, which in November 2018 provisionally won the Philippines’s third major telecoms licence, last month delayed the start of its commercial operations to early 2021 from late 2020. The delay is partly due to legislative holdups, as Congress has been preoccupied with next month’s midterm elections. The presidential election is due in 2022. Impacts How the post-midterm Congress deals with the licence transfer will be an early test of its support for President Rodrigo Duterte. Congress delaying its approval beyond this July would be a negative indicator for prospective foreign investors in Philippine industry. The government will dismiss concerns over possible threats to national security from Chinese telecoms companies.


Significance The employment market is dominated by online platforms, not just job search apps, but transport and services platforms that link gig workers to customers. Indeed, the government expects the digital economy to play a key role China’s 14th Five Year Plan (2021-25) in terms of driving growth, consumption and employment. Impacts Employment for women in the digital economy will be disproportionately low-paid. Young workers will face relatively higher rates of unemployment and under-employment. Workers in the digital economy will organise themselves to defend their interests but risk arrest and detention.


Significance The government, meanwhile, is alert for potential threats to national security. Impacts Manufacturers of wearable devices will likely experience greater demand. The metaverse may become a platform for government propaganda and social programmes such as education and healthcare. Beijing will pioneer regulatory approaches that, if successful, may be imitated elsewhere.


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