Apple, Amazon, Facebook and Microsoft are among high tech giants fighting to maintain an unregulated environment at the WTO that strengthens their monopolies and puts developing countries at an extreme disadvantage says Deborah James of CEPR
SHARMINI PERIES: It’s The Real News Network, I’m Sharmini Peries, coming to you from Baltimore. High tech US based transnational companies, known as TNCs, now represent five of the top seven largest corporations in the world, dominating information and data. They rank as follows: Apple is number one, Google, number two, Microsoft, number three, Amazon Retail, number six, Facebook, number seven. Combined, they influence much of our lives, how we think about things, what we eat, to what we buy, or even what we might sell, even who we vote for. Unlike other media, these companies are largely unregulated, not only here in the US, but the world over, therefore, extremely difficult to hold them accountable when there are breaches. This was the case two weeks ago, when the Senate Judiciary Committee and the Committee on Commerce, Science, and Transportation tried to ask Mark Zuckerberg, the CEO of Facebook, how they should fix the problem of data breaches, and how data is manipulated to control even who we vote for. Well, on to talk about all of this with me is Deborah James. Deborah James is the director of International Programs at the Center for Economic and Policy Research and she coordinates the organization, or a group of organizations, called Our World is Not For Sale. It’s a network. Thanks for joining us, Deborah.
DEBORAH JAMES: Thank you so much, Sharmini.
SHARMINI PERIES: All right, Deborah. So, these companies that I mentioned off the top, like Facebook, Google, Apple, and so forth, now, they want to operate in an environment that’s largely unregulated. They want to regulate themselves, but they also want something from us, which is that they want free rein to our data. They want free access to an adequate supply of flexible labor, they want to keep their tax evasion strategies protected, and they want access to an unrestricted marketplace, including free rein to use our data the way they like, to sell it to companies they want, which is perhaps the most valuable resource the world has right now, our data. So, in terms of this meeting that took place, the WTO ministerial meeting that took place in Buenos Aires, which was an important venue where these issues were discussed. Tell us what happened, and why we should be concerned about what happened there.
DEBORAH JAMES: Yes, well, there was really two agendas, I would say, going into the ministerial. The first one I’ll describe as an agenda by the vast majority of members, which is the developing countries, to actually change existing WTO rules and make them more development-friendly. And this has to do with creating flexibilities. For example, in the rules that govern services, so that countries are more able to achieve- for example the Sustainable Development Goals in healthcare and education- being able to use more industrial policies for their own development, to be able to create jobs and infant industries, and also to be able to feed their own population. It’s a really little-known situation in global trade agreements right now, that under WTO rules, developed countries are allowed to subsidize agriculture and export that agriculture in ways that damages developing country markets. But developing countries are not even allowed to subsidize agriculture when it comes to feeding their own population.
So, these are the changes that developing countries have been asking for, both in agriculture, as well as to a whole slew of current rules in the WTO. That’s called the development agenda. And unfortunately, they did not achieve that. The developed countries were adamantly opposed to actually making any sort of changes to existing WTO rules that would make it more development friendly, and make it more able for developing countries to achieve the Sustainable Development Goals. But then, there was the whole other agenda of what corporations and the developed countries were trying to get out of the ministerial.
SHARMINI PERIES: All right, so tell us why these meetings are so important especially, for the developing countries, and why don’t they have an equal seat at the table in terms of these negotiations?
DEBORAH JAMES: Well, in the WTO, it’s supposedly a consensus-based organization, so negotiations are not supposed to occur unless there is a mandate agreed by all members. And the rules they set are binding on one hundred and sixty four members. So, it’s not like a U.N. process, where they may take decisions that don’t have sanctions. I mean, a big part of the WTO, when it was founded in 1995, was that actually countries- that the rules are binding, and that countries can have cases against each other, and implement sanctions against each other. And that’s why we were so adamantly opposed to the current corporations that you mentioned, Sharmini, at the beginning, of Google, and Apple, and Facebook, and Amazon, and Microsoft, as well as other giant tech corporations from around the world, who tried to use this ministerial to really launch new negotiations to completely rewrite the rules of the global economy. That is going to be the global economy of the future, which is going to be a digital global economy.
SHARMINI PERIES: And when you say “rewrite the rules of the future,” is that within the WTO context and how they are governed?
DEBORAH JAMES: Yes, well, they are trying to get a mandate to launch new negotiations in this area of digital trade, but also these companies are having this agenda in every existing trade agreement under negotiation. So, the Trans-Pacific Partnership, the Regional Economic Partnership in Asia, even the rewrite of the North American Free Trade Agreement, and the little-known Trade in Services Agreement, all include this. And the easiest way to understand what is it that they’re going for, Sharmini, look at their business model. These companies make profit because they don’t abide by local regulations.
If you think about Uber coming into a city, they don’t want to abide by the local taxi regulations, they make money by having an infinite supply of flexible labor. So, they don’t actually have employees, and in lot of cases, they just have contract suppliers, and they want to be able to move jobs around the world whenever they want to find the cheapest labor. They also profit because they have control over the data. So, a company like Uber, for example, knows everything about how people move around a city. A company like Amazon knows exactly what time of day people like to shop. They know your whole search history, everything, so that they’re able to get involved in- not just as a platform, buying and selling, but actually making the decisions about production.
And they also- the big part of their business model is tax avoidance strategy. And these are exactly the the rules that they are proposing in the WTO, and in all of these other trade agreements, correspond exactly to consolidating this business model, so that even though there’s a big international movement right now, to try to make fair international tax systems, including with the OECD and the International Monetary Fund. What is happening in trade agreements would completely undermine that, because it would consolidate, forever, their tax avoidance strategies. It would consolidate their ability to move jobs around the world while dismissing the social protection and the decent jobs agenda that is being fought for by the trade unions globally, and the International Labour Organization. It would consolidate, forever, their right to control the data.
And it’s not just me who thinks data is really important. The Economist, last May, acknowledged that data is a country’s- it is the most valuable resource around the world. And what these companies are asking is that developing countries transfer their data to these corporations for free, permanently. And this is crazy. It’s like if we had said, many years ago, well not everybody knows how to get the oil out of the ground, so let’s just say everything under the subsoil is free to whoever has the technology to get it. That is not the right way to go, and we need to be talking about developing countries having digital industrialization strategies, and not talking about having consolidated cross-border data transfers for free, so that big corporations can have control over the global data of the world from now until forever.
SHARMINI PERIES: All right, Deborah. One very good thing you did in an article, you wrote in your CEPR blog, which I understand is published elsewhere, is you addressed a whole section called, “Where do we go from here,” in terms of these regulations. For ordinary people listening to this interview, they’re going, “Wow, what can we do about it?” And, of course, you’re engaged in this on a day to day basis, and you attend these conferences, and you do what you can, and there is a movement of people around you. But, at the same time, what are ordinary people listening to this could do about what you are talking about, in terms of the influence they could have, through civil society organizations, at these types of negotiations that are going on.
DEBORAH JAMES: Well, I think we need to think about, on an individual level, what kind of data we’re giving to these companies. So, are we allowing them to, sort of, track every aspect of our lives? And are we using the services of the biggest corporations in the world and just consolidating their market monopolies? You know, we need to be thinking about how ninety percent of the increase in ad revenue, for example, digital ad revenue, goes to both Google and Facebook. This is crazy. We don’t need to have these giant corporations be, not only controlling every aspect of the platform, and the market, and the global value chain in their industries, but also, then as you mentioned, trying to rewrite the regulations and rewrite the rules of the global economy to consolidate rights for them to profit in markets, while handcuffing governments from being able to regulate in the public interest, which is what they’re doing.
So, we need to be much more actively involved in protecting our own data on an individual basis, but also advocating for- you know, in Europe, they are developing this new global data protection regimen that is being implemented. We don’t have any like that in the United States. There is so little oversight over these companies. And we need to be advocating for much more stricter personal data protection. But we also need to think a little bit bigger than that in terms of the role of these companies.
There was a lot of discussion now about whether or not a search engine actually should be governed like a utility, whether Facebook should be governed like a media company. And we need to think about the fact that these companies are often operating in an unregulated space, and if they maybe actually should be regulated by some of the old rules we have for governing media and governing utilities, or if we need to make new sets of rules to govern them. They cannot be self-regulating, they’ve shown to be absolutely abysmal at that, in terms of having the situation come out in the public interest. Then, we need to have more stricter regulation of these companies, but also we need to think about breaking them up, because honestly Sharmini, they are operating as monopolies, and they are doing this, not only in the United States, but they’re using the extra profit that they make to to put down competition in other countries.
So, they’re selling all of this, believe it or not, under the rubric of e-commerce for development, and trying to convince developing countries that it would be good for them to open up to Google, and Apple, and PayPal, and all these different companies, to come in and control their financial systems,, and their data systems and everything. But they’re just going to end up controlling the data, and where will developing countries be left in terms of being able to foment their own platforms, or create any sort of decent jobs and industries in these digital spaces in the future? So, we need to have some sort of antimonopoly action from, sort of, competition policies that will govern these institutions, that will break them up, because they have too much dominant power and control over our lives.
And the last thing I would say is just to support organizations that are working on this. Read more about it, we have a lot of information on our website at OurWorldisNotForSale.net, that’s the global coalition of more than two-hundred-and-fifty civil society organizations that I coordinate. That includes trade unions, and public interest groups, and development advocates that are all working for a sustainable, fair transparent, and democratic multilateral trading system. Because these are binding rules that affect every aspect of their lives, and they are decided far away in Geneva. And most of us have no idea what’s on the table, but we, as advocates, are trying to provide that information for you, so that you can then be advocating to your government about the changes you want to see, but also to think about your individual relation with those corporations, and how much of your data you want to give them, and how much of your money you want to be supporting them with, as well.
SHARMINI PERIES: All right, Deborah, fantastic. We’ve opened up a Pandora’s box of issues we need to talk about moving forward. I welcome you back to The Real News, where we can continue to have this discussion another time. In the meantime, we’ll put a link to OurWorldisNotForSale.net, just below the player, and we’ll continue this discussion very soon. Thanks for joining us today.
DEBORAH JAMES: Thank you so much, Sharmini.
SHARMINI PERIES: And thank you, for joining us here on The Real News Network.