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A “centralized Internet” will be damaging for India and other emerging markets

I came across an important article today, a long read by Roger McNamee, an early Facebook investor and mentor to Mark Zuckerberg. The article shed crucial light on the inherent problems with social Internet platforms like Facebook and Google and brought into focus some of the issues I believe will need to be addressed in India but also the broader emerging market context.

McNamee spends significant time analyzing the deleterious effects of the manipulation of Facebook on users in the context of the Brexit referendum as well as the US Presidential Elections in 2016. Both produced shock results but more importantly, had much more widespread outcomes in terms of the political economy of Europe and the United States. While Brexit represents a break from the European project and will fundamentally rewire the landscape of Western Europe, the US election produced an unexpected winner and predictably disruptive trends in domestic and international policy.

McNamee’s analysis of the algorithm driven “filter bubbles” on Facebook is particularly revealing. To maximize advertising revenues, platforms like Facebook and Google will always tend to maximize attention-grabbing headlines and search results in customized feeds to users. As users choose to like and share this content with their social network, the iterative process driven the algorithm will serve to magnify the pre-existing biases of users and continue to serve up similar content, creating a multiplier effect that serves to harden opinions and stances, effectively polarizing the user base. Quite the opposite of the digital public square espoused by the platform companies.

McNamee goes on to call out Facebook and suggest several remedies for altering the underlying business model and effect a course correction for the public good. Many of these seem impractical or difficult to implement, especially under the current political dispensation in the US. However, it is a massively important first step to guide discussion on what is fast becoming a central question of the times — are companies like Facebook, Google et al simple innovators who bring people, communities and businesses together in a benign, socially altruistic manner or are they essentially monopolistic businesses that are built on disruptive technologies that need to be reined in or even broken up?

Governments and policy makers are already weighing up this question and all its implications. The European Commission has slapped a $2.7 billion fine on Google for abusive practices related to the company’s companion shopping service. Uber lost an appeal before the Employment Appeal Tribunal in the UK and has lost its license to operate in London. Where does the proverbial red line fall in these cases? What constitutes normal, legal business activities versus monopolistic behavior and tactics from these tech giants?

These questions are particularly important for emerging markets like India to consider. For starters, the policy framework in many of these markets is simply not up to scratch. Beyond this, governments must balance policy considerations versus the need for investments, job creation and other imperatives. All this said, the most fundamental reason why companies like Facebook and Google stand to gain even more dominance in emerging markets has to do with the question of the Next Billion segment of consumers. India has barely a third of their population connected to the Internet and those who are don’t exactly enjoy broadband connectivity over the latest smartphones. However, the vast majority of Internet usage is skewed towards the smartphone as a result of its mobility, relative affordability and immediacy. McNamee correctly opines that the advent of smartphones gave the likes of “Facebook and Google with a prohibitive advantage over traditional media”, in that they could serve uniquely customized content to their users by drawing on the reams of real-time data voluntarily served up by these users.

In India and other emerging markets, the potential for outsized influence by these highly centralized Internet giants is very real. Facebook has already run into stiff resistance when their ill-conceived Free Basics program ran afoul of India’s regulators after a heated campaign by activists. Others such as Google are taking a more patient, pro-active approach tailored to local market conditions, requirements and sensitivities. However, this will not be enough. While the net neutrality regulations in India are welcome, much more work need to be done to ensure that India’s Internet and connectivity landscape doesn’t end up highly centralized and concentrated in the hands of a few tech giants.

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