Internet, geopolitics and the future

By: Enrrique Dans

Following recent statements by Eric Schmidt, in which he predicted a future with an Internet divided into two independent networks managed by the United States and China, about which I wrote at the time commenting that, in fact, that division was already in existence, comes an interesting article in The Guardian, “To regulate AI we need new laws, not just a code of ethics”, which adds a third, relatively independent, player, the European Union, and discusses the different approaches to regulating technology in either scenario.

The question is clear: deep down, what decides those possible splits or balkanization of the internet, apart from language issues, the type of regulation established in each of those scenarios. Seen in this way, what are the elements that characterize each of these approaches, and what exactly makes them incompatible in the future? Taking the issue further, in which of these regulatory scenarios would you feel most at ease? And which will ultimately be more effective in promoting a higher level of progress?

Intuitively, we all associate China with strong government control, an all-seeing state capable of accessing absolutely all the information generated by online business transactions. In contrast, we identify Europe as the scenario that tries to protect us against greedy, unscrupulous companies, and with governments trying to mediate between both — usually with very unbalanced results — a role, in the vast majority of the cases, will restrict corporate initiatives, in which any new scenario is submitted to regulations that, in many cases, must be invented. Meanwhile, in the United States an environment is emerging where, in principle, anything not specifically prohibited is allowed, and companies can offer the products and services they deem appropriate and take advantage of new opportunities, with regulator intervening only when problems arise. This is a somewhat simplistic description, but establishes completely different environments: in China, for example, foreign companies will find it impossible to operate if they do not accept state intervention that can leave users vulnerable; in Europe, on the other hand, companies face restrictions or even hefty fines when they try to develop business models that in other places would present few problems.

If we look at the size of each economy, Europe’s worth around $20 trillion, is somewhat larger than the approximately $19 trillion in the United States and far greater than the theoretical $103 billion in China. However, that size does not necessarily reflect the future prospects of each. With respect to this potential, what does it mean to superimpose an environment of ironclad governmental control, one theoretically guaranteed with respect to the rights of citizens, and one extremely liberal? The consequences regarding the amount and relevance of innovation seem clear: Europe generates many less successful and cutting-edge models, while the United States and China are rivals in this regard, except for the fact that the vast majority of ideas and projects generated in the United States are universal, while those from China tend to be limited to domestic use, grow well, and have not international ambition until they are already practically giants.

Can we draw any conclusions about the future supremacy of one or other model? Does it really depend on our personal experience which we see as more advantageous? Do the Chinese tend to prefer their own model based on its proven efficiency, despite the erosion of individual rights that they never enjoined anyway? Do US companies struggle with standards in Europe they consider suffocating and that they don’t encounter at home? Do we Europeans see the United States — leaving China out of the equation for the moment — as a model that leaves us vulnerable, prompting a more interventionist state? Frankly, I’m not sure. But all the signs are that the internet is being split up into different zones, each with its own characteristics and that will condition the activity of business and the individual. Apologies for the generalizations, but how do you see each of these models evolving?