Caixin Summit: What Big Tech Wants From Its Regulators
Big tech companies would welcome new regulations, but are looking for more clarity, experts said, in the wake of a wide-ranging regulatory crackdown that clobbered their stock prices.
“A lot of people think that ... big tech wouldn’t want to be regulated, but I can tell you that (it) is the exact opposite,” Chia Kim Huat, the regional head of Rajah & Tann Singapore LLP, said at the Caixin Summit on Friday. “They know if they are not regulated, they will never be able to go as far or go as big because regulation will come on one day. So they hope to be regulated earlier.”
Speaking at a four-person panel called Regulating Big Tech, the moderator Chia said that tech companies are not self-regulated, and they want regulations to point them in the right direction.
One of the panel’s three guests, Cheng Hao, managing director of Huawei International Pte. Ltd., agreed. “Regulation with rules and standards can help tech companies,” he said Friday, on the first day of the two-day economic conference. He advised companies to actively approach regulators.
This year, China’s tech sector has been subjected to a wide-ranging regulatory crackdown. E-commerce titan Alibaba Group Holding Ltd. was fined a record 18.2 billion yuan ($2.8 billion) in April for monopolistic behavior, followed by other tech giants like Tencent Holdings Ltd., Meituan and JD.com Inc., who were all punished for similar reasons.
The crackdown rattled investors. In the third quarter, $781 billion was wiped off the market value of Chinese internet companies.
In response to a question about how the free market helps spur technological innovation, Gu Qingyang, an associate professor at the National University of Singapore, said that regulators need to be there to provide a level playing field because monopolistic behavior will discourage innovation.
“Innovation and regulation are not in conflict,” said Vincent Loy, assistant managing director of the Monetary Authority of Singapore.
Risk is inherent to innovation, so it is essential that tech companies and regulators work together to understand the impact, risk and complexity behind any innovative endeavor “Regulation has to be modular and agile,” he said.
Regulations should be designed to prevent the big risks that might do major damage to society, Loy added. “If the risk is small, or something that we can absorb, we should accept some failure along the way,” he said.
Experts were also calling for a global framework of governance to make sure that data, which Chia called “the lifeblood of the new world economy,” can be shared safely among countries.
“I look at data as a new oxygen,” Loy said. Everyone can be contributing to it, making something good out of it, and recycling it, he said. But at the same time, there are legitimate concerns about how it is collected and used.
“In the future, we will rely more and more on the data that flows across the border ... the key issue is global governance,” Gu said. “We need coordination among the global world.”
Unfortunately, he has seen more and more entities set restrictions on cross-border data flows, a situation that serves as a sharp reminder for the international community to set up a global data governance system. “Maybe we can have a WTO for the international trade (of data),” he added.
More data being processed means that there are higher risks in terms of leakage and cyber crime — “this is something we should overcome, but not an excuse for us to stop,” Cheng added. “The important thing is rules and standards.”
Chia said that Singapore will quite likely take the lead on creating a new form of agreement for the digital economy, which will provide a blueprint for a global multilateral data transfer trading system.
Contact reporter Manyun Zou (email@example.com) and editor Michael Bellart (firstname.lastname@example.org)
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