The internet and the complex relationship between government and corporations
Last week produced a great many news stories highlighting the complex question of the relationship between governments and business.
Among the highlights was the Turkish Prime Minister’s decision to block Twitter in a bid to prevent the circulation of information about a corruption scandal affecting his government. Twitter responded to this by informing its users of other ways to access its service. The wide range of alternative means to do this, based on text messaging or by a DNS change to use Google services, which seemed to show the inability of the Turkish government to stop Twitter and that served as a powerful advertisement for the company as a means to combat government abuse of power, was speedily answered by Recep Tayyip Erdoğan’s administration by blocking IP addresses, justified by Twitter’s supposed belief that it is above the law and has ignored the decisions of Turkish courts.
The ongoing battle between the Turkish government and Twitter is but one of many taking place between governments, politicians, and the world of business. This week we learned that the US government has been spying for several years on Chinese company Huawei, the world’s second-largest manufacturer of hardware, and that this spying had taken place at all levels and even reached the heart of the firm’s decision-making processes. The reason? Completely arbitrary: Washington believes that the company is a security threat, something that presumably gives it carte blanche to undertake any activity.
The relationship between government and business has always been complex. As a matter of principle, governments are supposed to serve the interests of the electorate as a whole, while businesses serve those of their shareholders or owners. Within this context, governments establish a framework of laws that limit the activities of businesses. But there is a clear problem here: while governments set the rules for what can go in within their countries’ borders; businesses increasingly operate on a global level, particularly since the appearance of the internet.
One clear example of the incongruities this can provoke are taxes: governments want businesses to pay their national taxes, but businesses, taking advantage of the law, or by obeying it to the letter, are able to reduce their tax load significantly by carrying out accounting procedures in countries with low tax rates that no law prohibits.
Tax laws are, to a large degree, something that governments can pass as they see fit, they can be used to plan a country’s investment strategy, and only with difficulty can be subjected to other authorities. To take action over multinational companies’ taxes sometimes means appealing to some kind of morality, forgetting in the process that the function of such companies is to keep their shareholders happy, while respecting the law, and thus trying to keep their costs down. We find ourselves, therefore, dealing with cases where no law has been broken, but where companies are not fulfilling their tax function as efficiently as possible: a dilemma that governments cannot easily remedy.
Governments can however, delay M&A operations, or condition them through anti-trust legislation, impose fines and restrictions based on national laws (which can even address supranational issues such as human or civil rights) among other things. Companies can respond by challenging these moves, depending on how their CEOs see things, and even try to twist governments’ arms, as Twitter is doing, and Google tried to do in China, when the company seriously considered the problems the Government could face if the company decided to abandon the country.
At the same time, some governments seem to be acting more and more as though they were corporations: China limits entry to its attractive market by controlling what users do with web-based services, in the same way that the US government not only spies on foreign governments and businesses, as well as openly acting as a lobby to benefit the interests of US companies. The shameful episodes whereby countries like Spain pass laws under pressure from US content providers show that the law is not always used in the service of the electorate, but on the basis of some governments’ economic interests.
To make matters worse, international trade agreements are also subject to conflicting interests, and try on many occasions to influence issues that affect their citizens on the basis of supranational legislation, such as copyright and patent rules. Furthermore, the environment that much of these events is taking place, the internet, is always under the control of the country where it originated, a phase that now seems to be entering its final stage, but still raises many questions about the alternatives we have.
This is a much more complex context that it appears, and efforts by the likes of Tim Berners-Lee for a Magna Carta to protect internet users’ rights highlight the need to defend the nature of the world wide web from ever-harsher attacks by governments and corporations.
As things stand, governments represent their people’s interests less and less: democracy, which in many countries is absent or not fully guaranteed, still has not undergone the reform needed to bring it up to date with a hyper-connected world: we continue to do the best we can with laws created for a world in which information circulated slowly and always in the same direction, subject to border controls, as well as in accordance with the interests of whoever is in power. These are interests that over time are increasingly conditioned by governments, as well as to third parties of all types, from corrupt governments to those engaged in dubious practices that, sadly, many of us have come to accept as normal.
The corruption that in the pre-internet days was largely hidden by the difficulties of uncovering what politicians were up to does not seem to have been stopped by the existence of the internet, aside perhaps from the actions of a few brave whistleblowers. Curiously enough, the whistleblowers who did uncover the shenanigans of their governments are either in jail or hiding, unprotected by any law. Politics is an area where powerful interests prevent the necessary transparency that the internet offers. Instead it is, more than ever, the only game in town, and the one that most needs to be shaken up.
Much is at stake as we try to defend the internet, much more than might seem to be the case. And those of us who believe that politics can help the cause face an uphill battle. As each day passes, the only response is activism.
(En español, aquí)
