UN Report Criticizes Global Digital Companies

At the UN General Assembly at the end of this month, the UN Secretary General, António Guterres, said he feared that the world was rapidly becoming split between those countries which follow the USA and those that follow China. There would be little opportunity to steer a neutral path between the 2 super-powers. This strong warning from the UN comes as the US/China trade war is increasing. And it has a lot to do with the control of the digital economy. The “GAAFAs” (Google, Amazon, Apple, FaceBook and Alibaba) have often found themselves at the wrong end of the debate on competition in the digital economy. There are the high fines for anti-competition and misuse of citizens’ data. A new report by UNCTAD (the UN Conference on Trade and Development) called the Digital Economy Report 2019 , points out that digital wealth is concentrated in the hands of a few US- and China-based platforms, and the gap between the under-connected and the hyper-digitalized countries will widen and worsen inequalities if unaddressed. The Report maps the flow, data and funds in the world’s digital economy and outlines the enormous potential gains and possible development costs as more of the world connects and buys online.

The Report point out that the USA and China account for 75% of all patents related to blockchain technologies, 50% of global spending on the Internet of Things (IoT), more than 75% of the cloud computing market and as much as 90%  of the market capitalization value of the world’s 70 largest digital platform companies. Global internet protocol (IP) traffic (the proxy for data flows) has seen dramatic growth. In 1992, there was about 100 gigabytes (GB) of traffic per day. By 2017 traffic had surged to more than 45,000 GB per second. Yet the world is only in the early days of the data-driven economy. By 2022 global IP traffic is projected to reach 150,700 GB per second. The Report concludes that concerted global efforts are required to spread the digital economy’s gains to the many people who currently reap little benefit from it in the developing world.