Business Unusual

What the Google fine might say about the future control of the internet

The internet was a research experiment by the US Department of Defence in the 70s that was evolved by the scientific community and led to the the creation of email communications and the world wide web.

Initially the engineers that helped connect the machines that created the internet managed the network, but as it grew it needed more detailed control.

On 1 October 2016 the control was handed formally to the Internet Corporation for Assigned Names and Numbers (Icann) following the end of a management contract with the US Department of Commerce. Icann has representatives from governments, business and community organisations and takes its mandate from consensus between those groups.

Their most recently meeting was here in South Africa at the end of June 2017.

This is not about them though, but how they have been created and look after a very complex environment using multiple stakeholders to manage a global resource despite being an NPO.

As more of the globe's operations are managed via the internet it might be worth looking at similar bodies to manage the markets that operate across it.

R35 billion fine

Google was fined 2.4 billion euros (R35 trillion) for anti-competitive behaviour for displaying products from its own shopping comparison service ahead of competitors in search queries.

The fine was brought by the EU itself as individual countries lack the ability to effectively challenge such a large multinational. Likewise, large countries that do have the ability to challenge them may not be the ones that are negatively affected and so do not pursue action against them.

Amazon, Facebook, Apple, Alphabet, Alibaba and other corporations that span multiple countries are now so big and influential that they effectively create monopolies in the markets they operate in. Currently their regulation is managed differently in each region with some elements being covered by international agreements. But as is often the case, the regulations can’t easily keep up or consider what should be prevented so as not to hamper the positive growth to these new marketplaces and economies.

More global regulatory bodies rather than national governments regulating global organisations

The new challenges from autonomous factories, driverless vehicles and decentralised currencies further complicate the notion of how to control corporations that only by definition are still based in a country when their operations occur everywhere and where a practice in one area may be welcome while in another potentially harmful.

Organisations like the United Nations, or the G groupings or the World Economic Forum may prove to be a more practical way to manage challenges and companies that have outgrown the oversight ability of governments.

The world’s reserve banks in almost every country are independent of governments to better align with international best practices than national ones.

This approach may be required in creating a regulatory body to govern access, use and perhaps even the cost of using the internet.

A growing concern in this regard relates to decentralised currencies, not their use, but their power consumption.

The networks' independence is ensured by preventing any one group from trying to control more that 50% of the mining function of the ledger and copies of it (if a majority were reached, the mining group could insert and validate fraudulent blocks) to deter that, as more miners seek to validate a block, it gets more difficult both as a deterrent and to keep the validation of blocks to about 10 minute intervals.

However, in the case of Bitcoin the power consumed to maintain the network would become unsustainable if the currency became widely adopted. Ethereum uses less, but still a considerable amount. Currently those tasked with reducing the power needs are the developer and founder networks that created the blockchains. Government could intervene but, like piracy or hacking, just because a country says something does not mean it can do something.

Might it not be time to look at the benefits of bodies like Icann and set up more to manage the best way to guide the development of blockchains to the benefit of all those involved?

The US debate about how best to maintain net neutrality may be in question following Donald Trump becoming President. Such significant systems are probably best not managed by officials who possibly don’t even understand how the network operates, who actually owns it and how difficult it will be to make drastic changes each time the government changes.

Would antitrust options not be best served by market regulators that function in the interest of the market rather than those in the market or government bodies whose citizens use that market?

It certainly is a messy process and it is not fast. But, in the same way Winston Churchill famously said “democracy is the worst form of government except all those other forms that have been tried from time to time,” a body like Icann might achieve more than an elected government in finding the right balance between regulation and innovation.

This is by no means an attempt to make the case for a specific solution, just that given how much everything else has changed, it would be unwise to not consider the implications of not also exploring the best options to deal with the consequences of those changes.

702 welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the 702 community a safe and welcoming space for all.

702 reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

702 is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
The Alibaba Group does not see itself as a company but an economy

The Alibaba Group does not see itself as a company but an economy

Alibaba founder Jack Ma says the future is his biggest competitor and he wants young entrepreneurs to help him succeed.

If a minimum wage is a good idea, what about a maximum?

If a minimum wage is a good idea, what about a maximum?

Salary caps are not new, but wage gaps have never been this big, perhaps this is how could we address it.

Half this article will no longer be true in the future

Half this article will no longer be true in the future

Humans acknowledge that change is inevitable, but resist it anyway.

Update: Amazon gets wider, Uber gets a flat and Bitcoin is losing currency

Update: Amazon gets wider, Uber gets a flat and Bitcoin is losing currency

A mid-year update on the companies we have profiled on Business Unusual.

Minecraft, a game that could one day get your child a job

Minecraft, a game that could one day get your child a job

There is a lot of great educational software, but these games are not only good for children.

Dynamic pricing - a buzzword that may see you pay more

Dynamic pricing - a buzzword that may see you pay more

Your shopping habits may reduce your chances of getting the best deals.

Popular articles
Home Affairs to follow up on special dispensation permit for Zimbabweans in SA

Home Affairs to follow up on special dispensation permit for Zimbabweans in SA

Home Affairs Minister Hlengiwe Mkhize says her department will respond to all Zimbabweans under special dispensation.

702 opens Walk the Talk entries, welcomes new sponsor MTN SA

702 opens Walk the Talk entries, welcomes new sponsor MTN SA

702 has officially launched The MTN Walk the Talk with 702 for 2017, and the 15-year event is getting better and bigger.

So what exactly is radical economic transformation?

So what exactly is radical economic transformation?

Wits associate professor of economics Christopher Malikane speaks to Azania Mosaka about the term that is being bandied about.

Getting to know MP, Dr Makhosi Khoza

Getting to know MP, Dr Makhosi Khoza

Dr Khoza is admired by South Africans for her role in the SABC inquiry as a ANC member of parliament.

No escaping the tax man even if you work outside SA

No escaping the tax man even if you work outside SA

Government is intending to change the way foreign income is taxed by introducing taxes to a large South African diaspora.

Earn peanuts? How to best invest very small amounts...

Earn peanuts? How to best invest very small amounts...

Got a spare R200 or R300 a month? Here’s how to make that money work hard and grow…

5 most important years in anyone’s life (when it comes to investing)

5 most important years in anyone’s life (when it comes to investing)

How old are you? Financial advisor Warren Ingram discusses the five most important ages in anyone’s investment career.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...

Blesserfinder: Matching you with a sugar daddy near you

Blesserfinder: Matching you with a sugar daddy near you

Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?