As a part of the ongoing tech crackdown, Beijing has decided to introduce AI Algorithm-based regulations to rein in the Big Tech
There's something Alibaba, Baidu, Bytedance, Didi, Meituan, and Tencent have in common other than taking the heat of the ongoing tech crackdown from Beijing. They all rely on Artificial Intelligence (AI) algorithms dealing with volume, variety, and velocity of data to run their businesses efficiently. The book, Competing in the Age of AI by Karim R. Lakhani and Marco Iansiti, provides deep insights into how the "AI factory" is at the core of decision-making in new-age firms. Complex AI algorithm is arguably one of the disruptive innovations that led to creative destruction, a powerful force in economic dynamism.
In a governance framework for algorithmic accountability and transparency released in 2019, the European Union (EU) acknowledged that algorithmic systems have not only renovated traditional business models but also rewired our social and political lives at large. Since then, the EU has ramped up its efforts to sanitise the internet, including proposed curbs on AI and facial recognition uses. Lawmakers in the United States, too, have grilled Facebook over the reported negative impact of Instagram's algorithm-driven content on teens' mental health following the Cambridge Analytica data scandal. However, China has again taken the lead to rein in automated technologies by taking a tough call on algorithms.
Lawmakers in the United States, too, have grilled Facebook over the reported negative impact of Instagram's algorithm-driven content on teens' mental health following the Cambridge Analytica data scandal. However, China has again taken the lead to rein in automated technologies by taking a tough call on algorithms.
Last week, the Cyberspace Administration of China (CAC), headed by Zhuang Rongwen, who considers data as a national asset, posted a notice—“Guidelines for Strengthening the Comprehensive Management of Internet Information Service Algorithms.” It was jointly signed by nine key institutions, including the State Administration for Market Regulation, the Central Publicity Department, the Ministry of Education, and the Ministry of Public Security. It calls on tech companies to make Xi Jinping's “Thought on Socialism with Chinese Characteristics for a New Era” their guiding ideology to promote algorithms' healthy, orderly, and prosperous development. It stipulates the prevention of algorithms' abuse by prohibiting algorithm-powered activities from tampering with public opinion, attacking competitors, and infringing upon netizens' rights and interests. It has set forth three years to gradually establish a comprehensive algorithm security governance framework with a good governance mechanism, a sound supervision system, and a standardised algorithm ecology.
The move is not unanticipated. Observers see it as the furthering of the ongoing tech crackdown. In August, CAC released an opinion-seeking draft on "Internet Information Service Algorithmic Recommendation Management Provisions," which laid out more details to regulate algorithms missing from the latest notification. It required tech companies to equip users with tools to manage the consumer-profiling data algorithms and prohibit algorithms from causing internet addiction amongst minors. The recent step also targets business practices that CPC deems harmful to workers or consumers, such as overpricing, push sales, abnormal surge prices during peak hours. This year food-delivery giant Meituan and ride-hailing tycoon Didi came under fire for the poor working conditions of their gig drivers.
Algorithm-related regulations will further consolidate the government's role in the decision-making of Chinese internet companies.
Algorithm-related regulations will further consolidate the government's role in the decision-making of Chinese internet companies. Earlier, CPC proposed that the government take a board seat with veto powers at major tech companies by buying special management shares, giving it greater control over company policies on content and censorship. Nevertheless, it was actively implemented over the past year. Yet, it was unable to ensure that the algorithm-driven decision-making align with its socialist values. CPC wants to tailor the tech industry to achieve its long-term goals. However, the disclosure of proprietary technology and restrictions on learning user behaviour and recommendation services can hinder innovation in the long run in a country that came up with the concept of a super-app like WeChat.
While some experts have hailed China as a regulatory innovator, in this case, others feel that “China's approach could appeal to other countries that want a thriving digital economy while maintaining a firm grip on political and societal discourse.” It will be interesting to see how champions of democracy navigate the algorithm conundrum in the information Big Bang as they consider internet monopoly a threat to democracy, but strict oversight as digital authoritarianism.
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Saranya was a Research Assistant with the Centre for Security Strategy and Technology (CSST). Her research interests are domestic politics of China Sino-Indian ties Sino-US ...
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