PUBLIC SERVICES INTERNATIONAL The global union federation of workers in public services ENGLISH Digital trade rules and big tech: SURRENDERING PUBLIC GOOD TO PRIVATE POWER CONTENTS Abbreviations Overview 1. KEY IMPACTS OF DIGITISATION ON PUBLIC SERVICES 2. BIG TECH’S ‘DIGITAL TRADE’ DEMANDS 3. DIGITISED HEALTHCARE 4. “SMART CITIES” 5. RECOMMENDATIONS References Digital trade rules and Big Tech: SURRENDERING PUBLIC GOOD TO PRIVATE POWER Written by Professor Jane Kelsey, Faculty of Law, The University of Auckland, New Zealand, with research support from Mary Ann Manahan, and peer reviewed by Dr Bill Rosenberg. © Public Services International February 2020 © Cover illustration Anthony Russo 2 DIGITAL TRADE RULES AND BIG TECH: ABBREVIATIONS AI Artificial intelligence AIIB Asian Infrastructure Investment Bank D2D Digital 2 Dozen principles FTA Free trade agreement GAFA Google, Amazon, Facebook, Apple GATS General Agreement on Trade in Services IoT Internet of Things IT Information technology PPP Public Private Partnerships R&D Research and development SOE State-owned enterprise SPV Special Purpose Vehicle TPPA Trans-Pacific Partnership Agreement USTR United States Trade Representative WTO World Trade Organization SURRENDERING PUBLIC GOOD TO PRIVATE POWER 3 OVERVIEW ig Tech companies like Google, intelligence that does the work of doc- Amazon, Facebook and Apple – tors, technicians and prison officers. BGAFA for short - are using free Private contractors run the IT opera- trade agreements to protect them- tions and data bases of government selves from regulation. The idea of a agencies, storing our data on their own ‘free and open’ Internet sounds liberat- servers or in the ‘cloud’, which usually ing. But a world in which powerful and means they are controlled in the United unregulated private corporations con- States. This list expands every week, as trol the digital domain on which every- governments become more depend- one, from governments to families, ent on digital technologies and on the has come to depend is the ultimate in firms that control the information and privatisation systems that run them. Digital technologies are becoming ad- Every week, there is more evidence dictive. The Internet and its apps, social of how this power is being abused media, web searches, ride-shares and through tax evasion, breaches of hu- on-line market-places can now organise man rights by profiling of immigrants almost every aspect of our daily lives, and dissidents, and exploitating so- all seemingly for free. But every time called ‘self-employed’ workers. Big OVERVIEW we use them, we generate more data Tech show no sense of responsibility that allows the shadowy corporations or culpability for frauds on consumers, who control them to analyse our activ- mass breaches of data privacy, or even ities, opinions and friendships. Whether the online hosting of extremism and the it’s the US tech giants or their Chinese manipulation of democratic elections. counterparts of Baidu, WeChat, Alibaba and Tencent, this new generation of The last thing the state should be do- transnational corporations is reaching ing is surrendering its right to regulate ever-deeper into our lives. these technologies and their owners. Governments are in a perpetual state of Their power extends to the core of cen- catch-up, trying to understand and re- tral and local government and public spond to existing digital technologies services. They monitor our workplaces, and services only to see new, previous- streets and even devices in our homes, ly inconceivable ones emerge. There is and run our transport, telecommunica- currently very little regulation to control tions and energy infrastructure, some- these activities or hold the tech giants times from outside the country. They to account. Their global reach allows create the algorithms that decide who them to organise their corporate identi- gets a job or gets fired, is given a loan ties, locations and operations to bypass or enters university, and the artificial the limited laws and restrictions, and 4 DIGITAL TRADE RULES AND BIG TECH: tax obligations, that do exist. Big Tech wants to keep it that way. That is the purpose of the new rules on ‘electronic commerce’ or ‘digital trade’ that their governments are secur- ing for them through international free trade agreements. The Trans-Pacific Section Partnership Agreement (TPPA) set the Two se- ©The Conversation, template for later negotiations. Now lects a number of is- CC BY-NC there is pressure to adopt them in the sues of concern for PSI that are directly World Trade Organization (WTO) and ap- affected by the ‘trade’ rules: privatisa- ply them on a global scale. tion of public services, corporate con- trol, data, digital technologies, source These rules have been negotiated un- codes, public infrastructure, employ- der the radar. Governments seem be- ment, working conditions, unionisation, dazzled by unsubstantiated claims that public finance and social wellbeing. adopting them will bring new develop- The third section examines the impacts ment opportunities and potential cost in more detail with reference to health- savings, when in reality these rules are care and smart cities. The report con- designed to tie their hands. Few trade cludes with some recommendations. officials really understand the implica- tions of what they are negotiating. Few Hopefully, this will provide a platform people outside those negotiations have for PSI affiliates to mobilise your pow- been aware that these rules were being erful voices to stop the spread of the developed because of the secrecy that e-commerce rules, alongside other ne- screens them from public view. oliberal trade and investment rules, and demand a progressive, people-centred This report raises the alarm for pub- alternative. lic services unions in the Asia Pacific. These agreements will affect you in fundamental ways, as the public sec- tor workforce, as users of public ser- vices, and as citizens. The first section sets out the Tech lobby’s wish list and how that translated into the TPPA rules. SURRENDERING PUBLIC GOOD TO PRIVATE POWER 5 1. Key Impacts of Digitisation on Public Services heerleaders of the 4th industri- z Privatisation of public services: al revolution celebrate it as the The neoliberal market-driven agenda Cnext phase after the (failed) says the state should only do what neoliberal mode of financialised cap- the private sector can’t and what re- italism. Unions have recognised the mains in the public sphere should be potential benefits of a digitised econ- modelled on the private sector, in- omy, but only with a commitment to a cluding the drivers of efficiency, pro- just transition that protects the rights ductivity, labour replacement and of working people and enhances their lowering labour costs. At the same well-being1. That is not the present time, most governments claim an model. The current trajectory, fuelled ongoing commitment to improved by the new e-commerce or digital services to the public with public trade rules, will have a radical and dis- service at its core. There is an illu- ruptive impact on public services, on sion that digitisation enables a gov- public sector workers and unions, and ernment to do both. Where a gov- KEY IMPACTS OF DIGITISATION ON PUBLIC SERVICES on citizens, families and communities. ernment tries, and discovers it can’t, the ‘e-commerce’ trade rules will The recent report for PSI on disable the government from re-reg- Digitalisation and Public Services has ulating data, digital technologies and analysed these challenges in depth2. services in ways that prioritise the The following selection of issues pro- public interest. vides the framework for the case stud- ies in this report on healthcare and z Corporate control: Contracting ‘Smart Cities’. in and outsourcing are inevitable consequences of governments 6 DIGITAL TRADE RULES AND BIG TECH: © PSI 2017 committing to digitisation, because on servers. Often the data is stored they rarely have the capacity to do ‘in the cloud’, which means the the work themselves. The power servers are located in one or more relationship between the state and unspecified places, although they private corporations is turned on are usually controlled from the US. its head, as governments become If the government agency has not captive of the tech industry. If the been very specific in the contract e-commerce rules say the govern- about its data, it may have no con- ment can’t require a corporation pro- trol over what happens to it or even viding the service from offshore to rights to access it for research or have a local presence in the country, planning purposes. Once that data it forfeits even more control. Faced is out of government hands and held with unaffordable costs of new ser- offshore there is no guarantee that vices and upgrades, threatened or protections and obligations under actual exit by the foreign providers, national law will apply or be enforce- or technology or performance fail- able. The e-commerce trade rule will ure, governments have no capacity prevent them requiring the data to to step back in and resume control be held locally, rather than offshore. even if the rules let them. While that rule excludes data held or processed by or for a government, z Data: Control of data is the key to there are many loopholes, such as everything digital. Governments rely national or service-specific data on contractors to design, operate bases that non-government servic- and process personal data from pub- es providers also use. lic and social services, and store it SURRENDERING PUBLIC GOOD TO PRIVATE POWER 7 z Digital technology and source codes: failure, cyber-ransom or civil war, or if The source codes and algorithms that the contractor fails financially or to per- drive the government’s internal sys- form its legal obligations? The e-com- tems, or public services more gener- merce rules say governments can’t re- ally, are a black hole.