Outside regulation, or self-regulation?
Published on October 25, 2019
David Smith
Chief Executive of Global Futures and Foresight, Futurist, Strategist and Keynote Speaker
From being seen as an onerous burden, the nature, breadth and impact of regulation is set to become a key strategic facet for many organisations. Those with strategic foresight will look to pre-empt and in conjunction with others, help shape the direction of regulation to come.
On October 3rd, 2019 it was reported that ‘…European courts can now force Facebook to scrub illegal content worldwide.’ Reuters reported that Facebook and other platforms can also be made to comply with requests to take down content globally, even in countries where it is not illegal[i]. How the governments of the United States and other powers react to a foreign law that could easily be seen as subverting freedom of speech in their own countries will likely add to what is already, technologically speaking, a patchwork of privacy laws, lack of transparency and general incoherence that neither protect competition nor customers[ii]. Either way, Europe’s gambit could have lasting geopolitical clout, MIT Sloan believes that ‘…he first country to figure out the best way to regulate the broader tech industry could become the focal point for the next chapter of the world’s digital revolution[iii].’
Indeed, the EU Commission digital department has already recommended a regulatory framework for AI that would set transparency obligations on automated decision-making[iv]. Could Artificial Intelligence be the next GDPR? Wired notes that ‘…Intelligent systems at scale need regulation because they are an unprecedented force multiplier for the promotion of the interests of an individual or a group[v].’ Digital reality will also likely need some regulatory guidelines[vi], requiring business and government to work together.
An example of how this can be done lies in the sandbox format. Already adopted by developers of autonomous vehicles, virtual currencies, and fintech regulators, sandboxes provide a safe environment to encourage innovation while protecting consumer safety. ‘For example, the United Kingdom’s Financial Conduct Authority launched the first fintech regulatory sandbox in June 2016, allowing fintech players to test innovative products and services in a safe, live environment, with the appropriate consumer safeguards, and, when appropriate, is exempt from some regulatory environments[vii].’
While waiting, or planning for the future, organisations of all types would do well in policing themselves. A Stanford study, for example, found that companies that try to fix problems on their own may sidestep more onerous regulations in the future[viii], not to mention avoid damaging the trust of consumers and ceding brand value. If the future of business is trust, self-regulation is a must in developing a future-proof product and service.
[i] Source: Reuters, 2019
[ii][ii] Source: MIT Sloan Management Review, 2019 https://sloanreview.mit.edu/article/the-right-way-to-regulate-the-tech-industry/
[iii] Source: MIT Sloan Management Review, 2019 https://sloanreview.mit.edu/article/the-right-way-to-regulate-the-tech-industry/
[iv] Source: Politico, 2019 https://www.politico.eu/article/ai-data-regulator-rules-next-european-commission-takes-aim/
[v] Source: Wired, 2019 https://www.wired.com/story/ai-algorithms-need-drug-trials/
[vi] Source: Deloitte, 2019 https://www2.deloitte.com/us/en/insights/industry/public-sector/regulating-digital-reality-augmented-spaces.html
[vii] Source: Deloitte, 2019 https://www2.deloitte.com/us/en/insights/industry/public-sector/future-of-regulation/regulating-emerging-technology.html
[viii] Source: Fast Company, 2019 https://www.fastcompany.com/90345349/why-companies-should-police-themselves-better-than-the-politicians