Building a digital commonwealth

We need to rethink how data and digital infrastructure is governed, owned and used.

Mathew Lawrence
13 March 2019, 12.01am

The digital giants occupy the commanding heights of the contemporary economy. Of these, Facebook, Alphabet (the parent company of Google), Amazon and Apple dominate; they have accumulated the most data, developed the best analytical capabilities and gained greatest ownership of the foundational infrastructure, from mapping to cloud computing, that underpins all digital technology.

In turn, immense wealth and power is generated from the many and enjoyed by a few. Apple is the first trillion-dollar company in history. Jeff Bezos, the founder and owner of Amazon, is the richest person in history, with his net wealth increasing by $400 million dollars a day in 2018. The tech ‘Big 5’ – Amazon, Apple, Alphabet, Facebook, and Microsoft – have a combined annual revenue larger than the GDP of 90% of the world’s countries.

Critically, this wealth is generated by a business model founded on the extraction and analysis of data generated by users of the platforms for profit and control of the digital infrastructure; a business model that is increasingly responsible for serious economic, social and political problems. Crucially, these problems are neither glitches nor temporary phenomena, but are rooted in the purpose and revenue model of most major platforms.

Overall, this model drives the dominant digital platforms towards a new and universal ambition: entry into more and more markets, to then enclose customer access to those markets within the infrastructure of the platform, for the ever-expanding extraction and analysis of behavioural data for profit. The seemingly boundless ambition of the platform giants is driving the rise of what Shoshana Zuboff calls ‘surveillance capitalism’. Whereas profits once flowed from goods and services under industrial capitalism, then financial speculation under financial capitalism, profits are increasingly derived from the surveillance of platform users and service providers by the platforms, and the monetisation of aggregate data through analysis and the selling of insights to third parties. Surveillance mechanisms have also extended deeper into the everyday operation of both the physical and digital economy.

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In sum, the business model of the digital giants concentrates economic and technological power, contributes to rising inequality, threatens privacy and democratic principles and norms, and increases work insecurity, among others. However, through a different politics, these technologies could be harnessed for the common good, producing better, more liberating and equitable outcomes.

Data enclosure

Currently, the development and control of the digital infrastructure is in private hands, and data is a commodity that is captured and stored privately to be monetised for private gain. Crucially, the means of gaining value from data are mostly owned by private interests, with limited rights or technical capability enjoyed by the individuals or groups who co-produce the data. Moreover, the potential of that data is constrained through limited access, fragmentation and non-interoperability, meaning the development of products using data are driven by private interests rather than to address collective problems, and their (largely monetary) benefits are privatised.

Under such an arrangement, transparency is minimised, and regulatory and enforcement mechanisms are limited. In turn, individuals have lost control of much of their data, eroding personal privacy, security and autonomy. Furthermore, private ownership over data, analysis and insights means that digital monopolists are leading the development and ownership of AI technologies and control the digital infrastructure upon which much of modern life relies, and therefore are set to hold great sway over the foundation of future social and economic relations.

This could limit access to opportunities in much the same way that concentrated land ownership resulting from enclosure contributed to an exponential rise in inequality over the course of the Industrial Revolution. Land enclosure was a proximate cause of the British Agricultural Revolution, which, in increasing labour productivity and the urban population, set the preconditions for the Industrial Revolution. In turn, the power dynamics in society and the economy established by the Agricultural Revolution helped determine the distribution of rewards from industrialisation, opening up large inequalities. The development of AI by a few firms, and access decided by means to pay, could be creating the conditions for large inequalities to open up when AI technologies become more widely adopted. In much the same way as land, data could be pooled as a common resource for shared gain or captured for private benefit.

Moreover, surveillance capitalism reflects a deep neoliberal rationality, which seeks to drive marketisation into larger parts of society. This includes the penetration of economic transactions into social interaction, with, for example, blockchain technology potentially enabling social media platforms to monetise social interaction through charging micropayments when users interact. The development of the digital economy under neoliberal conditions therefore risks deepening broader trends: the hollowing out of collective agency and the extension of market values; the growing power and privileging of capital over labour; and growing inequalities of power and reward in economic life. As the capability and reach of these technologies deepens, the urgency to detach them from neoliberal structures grows ever more pressing.

The vision for change: a digital commonwealth

We stand at a crossroads. There is huge potential in a democratically governed digital economy. As yet, however, its development has been almost entirely market-led, with little to no strategic policy response from governments around the world. Another world is possible. Data could become a collective resource, available to realise a wider variety of ends by a broader range of actors; digital infrastructure could be a public good, underpinning new forms of collaboration, creativity and common power.

To that end, data and digital infrastructure should be organised as a collective resource. Public policy should shape the production and distribution of data and digital infrastructure for the common good, moving from conditions of monopolistic data enclosure to a thriving, creative and pluralistic ‘digital commonwealth’, where the vast potential of collectively developed data helps develop the wealth, creativity and capacity of all in society.

This should cover data generated by the interaction of users with platforms as well as the data on individuals collected and stored by the state. It should also rethink the ownership and governance of underlying digital infrastructure.

To realise this goal, we need to reimagine how these technologies are used; a new vision for how the digital revolution can precipitate a revolution in justice and prosperity. This requires recognising that data, and the value generated from it, is a collective achievement made possible by complex and connected layers of public and private infrastructure and investments in people, machines, software, standards, processes, practices and cultures.

We must match the boundless ambition of the digital giants with a bold strategy rooted in rethinking how data and digital infrastructure is governed, owned and used. Our data is driving a dramatic expansion in collective social intelligence, which could enable enormous progress in almost all areas of society – from improved diagnostic technologies in healthcare to dramatically increased (and non-market led) efficiency of resource use across economic activity. If we want to reshape the behaviour of platform companies and ensure that the collective intelligence explosion enabled by the mass analysis of data helps solve our most pressing challenges, from climate change to the fair allocation of goods and resources, we will have to reshape the governance and ownership of digitally generated data and the underlying infrastructure. In short, we must overthrow the data oligarchs and build a digital commons.

Digital technology for the public good: policies for reform

We recognise the limits of the UK’s domestic levers given the international nature of the digital economy and challenges of jurisdictional power. Nonetheless, we do not believe we are powerless; more can be done with bolder policymaking and a more ambitious politics. With the power of platform giants growing, the real is risk incrementalism; radical measures are the safest.

An institutional redesign of the governance of the digital economy, in particular governance of data and the ownership of digital infrastructure, should aim at four key outcomes:

1. Prevention of platform companies growing too dominant within existing sectors and as they enter new markets.

2. Limiting how much personal data (that which is leveraged by platforms from a user, such as consumer preferences and social details) is aggregated and privately owned by dominant platforms, making this data safely available to a much wider range of companies, public bodies and community organisations.

3. Making public sector data (that which is collected and used often by the state) interoperable, reliable and more secure.

4. Making data more widely accessible to entrepreneurs, companies (including social enterprises), civil society and public authorities.

To meet these objectives, we recommend four main measures in a strategy to deliver the systemic change needed to redirect the development of the digital revolution towards realising the potential of digital technology to improve the public good.

1. Reform competition law

The nature of the digital economy and data-driven business models poses challenges to traditional competition authorities, as they often provide services free at the point of use, grow rapidly and into new markets, and operate across borders. In response, we recommend that the Competition & Markets Authority (CMA) is tasked with judging mergers and acquisitions in terms of potential constraints on innovation, not just a traditional assessment based on the consideration of prices and consumer switching behaviour. Assessments should understand the potential negative effects on suppliers to the platform, which might suffer from its dominant power. Crucially, it should be able to limit or block mergers and acquisitions which are likely to reduce innovation within a given sector.

This should be supported by stronger powers to regulate entry into new markets by platforms; the CMA should be able to block horizontal market entry where acquisitions would lead to citizen detriment, slowing potential rates of innovation, and excessive market power. The CMA should also be able to require platforms to open up data if they are allowed to enter certain markets in which they would have an unfair data advantage, such as banking or healthcare.

2. Regulating the digital giants as utilities

The digital giants provide the services needed by many to live, work and communicate in the modern age. These services are becoming increasingly important in opening up key social and economic opportunities for citizens, and therefore could be seen as public goods. As such, we believe the platforms providing them should consequently be regulated as modern utilities, as much of the telecommunications sectors already is, through Ofcom.

We believe there are five categories of platform activity that, because of the essential and non-substitutable nature of the services being offered, mean they effectively function as utilities: searching, connecting through social media, matching consumers with suppliers, communicating services like email, and backbone infrastructure, including cloud services.

Regulation would be contingent on the level of market dominance across these utility areas. In practice, for example, this would mean that not all of Alphabet’s activities would be regulated like utilities. Research and development like DeepMind, services like Google Pay and products like Chromecast would not be covered. But where it provides infrastructural goods – most obviously in Google’s search engine, the dominant search engine in the UK and globally – it would be subject to tighter regulation as a condition of operation. In particular, regulated platforms would be required to have a licence to provide services to UK customers, with a licencing fee being charged as a fixed proportion of UK turnover. This should be overseen by a new regulator, the Office of Digital Platforms (OfDig), which should also have powers to:

  • Require companies (and public institutions) to keep audit logs of the data they feed into their algorithms and be prepared to explain their algorithms to the public on request.
  • Develop and accredit compulsory professional credentials for those programming and operating AI and algorithmic technologies.
  • Have the power to intervene and regulate data collection practices and uses, including, for example, banning the use of social data for the development of credit scoring.

3. Establish a public corporation to open up and democratise data

The value of public datasets should be unlocked for the common good. There is a wealth of data generated in the public realm, collected by a range of major public institutions, which could be a resource for collective wealth building. Moreover, there is the capacity – but not yet the vision – to develop an alternative public infrastructure for the digital economy.

To address this, we recommend that a new public corporation, Digital UK, should be established with two main goals: to better curate public data and maximise its productive, collective use; and to make the UK the world’s most open and accessible digital jurisdiction by 2030 through the creation of a network of public databanks, the opening up of private sector data at scale, and the development of a public digital infrastructure. Digital UK should be established by statute, with an independent and democratic governance structure. It should perform a number of key functions:

  • Be responsible for the standardisation and interoperability of data across the public sector and lead the development of the public realm’s digital capacity.
  • Create public stakes in the next generation of innovative digital businesses, to ensure the public share in the success of the next generation of platforms.
  • Establish a national data portal index for all open data.
  • Administer a Digital Citizen Account, providing each UK citizen with an online profile through which they can aggregate, access and manage key personal data.

Into the future, Digital UK should work with OfDig and the CMA to explore the opening of APIs for platform incumbents in certain markets, in conjunction with local authorities, based on an assessment of the potential for public benefit and innovation potential from the data. In the five areas of regulated platform utility activity, the presumption should be to open private datasets, as productive use of this data constitutes a valuable public good.

4. Local digital commonwealth building strategies

Alongside a national strategy, towns and cities are crucial in charting a different digital future. The increased entry of new platforms with different forms of ownership should be encouraged at local levels across the UK, including social enterprises and those owned by local authorities, into both markets with and without existing operations from universal platforms. This more ‘mixed’ digital economy could improve the conditions for the common benefit of the digital revolution. We call this a ‘digital commonwealth’. Overall, we recommend that the UK government and local authorities produce and implement local ‘Digital Commonwealth Strategies’ to drive the development and deployment of local platform services and assets.

Local, place-based Digital Commonwealth Strategies should be at the forefront of how we reimagine how data is generated and used and digital infrastructures are developed and owned, learning from innovative practice in cities such as Barcelona, while adapting to place-based needs. In doing so, they can help towns and cities regain control of data and democratise urban technologies, helping them move beyond unequal neoliberal growth models.

Digital Commonwealth Strategies should seek to ensure value is retained and circulated among communities where data is generated, and provide economic, social and environmental value. The wealth of information contained in a new network of public data bank(s) should underpin local digital strategies, enabling local authorities, businesses and civil society to better access public data, enabling the creation of locally relevant tools and services. It could also be undergirded by the development of other public digital infrastructures, led by Digital UK, like a public cloud, to broaden who can analyse data at scale, organised on different principles to commercial competitors.

While being flexible to the needs of local communities and economies, each strategy should be underpinned by four key principles and aims: shifting the legal regime around data to make it accessible and supporting the accumulation of public data; ensuring open and interoperable data wherever possible; reclaiming digital infrastructure, including democratising both access to data and analytical capability; and using public procurement to open up private data. In particular, Local Digital Commonwealth Strategies should include measures that:

  • Encourage innovation in the digital delivery of local services, including by public authorities, civic organisations and social enterprises. This could range from using data to provide local transport services, healthcare apps, and democratic tools.
  • Build local digital infrastructures that are open source and favour interoperable, neutral architectures, instead of locking local government into privately provided and closed digital systems that extract and enclose data and its resultant value.
  • Open up data from the private sector through the use of public procurement conditions. As is increasingly happening in leading European towns and cities, local authorities can use public procurement to open up the data generated by private companies through their interaction with the public realm, making it a condition of procurement contracts.
  • Pluralise ownership within the digital economy through the local authority actively encouraging the development of new digital services by innovative companies with a range of ownership models, including social enterprises and cooperatives.

Tensions and debates

There are two primary areas of debate: what institutional form a radical digital agenda should take, and relatedly, what are the jurisdictional and practical limits of ‘digitalism in one country’.

On the first point, there is an argument that the most systematic approach to tackling the power of the digital giants – and their monopolistic qualities – is taking them into public ownership, hence the demand, ‘Nationalise Facebook’. This raises clear questions around jurisdiction and scale; most of the major digital companies are either American or Chinese, and of such size and value that international co-ordination would be required to take them into some form of public ownership. As such, it arguably is more useful as a rhetorical demand, rather than constituting the programme of a radical government in the UK.

Indeed, within the context of the UK, a radical transformation in the governance and ownership of data and the underlying digital infrastructure – including creating publicly owned alternatives – strikes at their nodal power in society while allowing for a more democratic, innovative and open digital economy to emerge. This is both achievable and a radical and democratic shift in the direction and nature of the economy as a whole – a form of 21st century socialism in action.

There is also potential tension in questions around jurisdictional limits and ambition. We recognise there are genuine limits to what action in the UK alone can achieve; clearly many of these issues will require concerted international co-ordination and political governance. Nonetheless, the agenda we have set out can be pursued to radical effect without hitting any barriers of jurisdiction.

From here to there: strategy and implementation

Analyses and policies without action and durable implementation of change are of no use. What is required is to match these with a strategy – including an order of prioritisation – that will enable the embedding of institutions capable of reimagining the digital economy.

To that end, on Day One a radical government should begin the process of establishing Digital UK as an institutional driver and bulwark of a new digital commonwealth. It would create the institutional space, constituency and levers to enact change and act as a public counterweight and source of open innovation.

At the same time, and ideally drawing on existing examples of local innovation and radicalism, a radical government should trigger the development of local digital commonwealth strategies, requiring that every local authority beginns a process of consultation and implementation on reclaiming local ‘data sovereignty’. This is important for two reasons. First, it makes real and visible what an alternative Left digital strategy means for people and places far removed from the ‘Silicon Roundabout’ and other major UK tech clusters, binding in interests. Second, it would begin to generate new types of institutions and organisations serving local needs, that in turn would provide political support for an alternative digital strategy.

It is vital to deepen both local support and quickly institute a powerful national institute capable of reshaping data and the digital infrastructure because the next step of the agenda – regulating certain platform activity as utilities, opening up private data sets that are in the public interest, and developing public databanks – will be almost certainly challenged by the major digital companies, given it strikes at the source of their power. However, if institutions are embedded that open up the data of the major private monopolies, rein in the power of the data oligarchs, and create a public digital infrastructure that drives inclusive innovation and democratic participation, then a radical agenda can put down durable roots.

Next steps

There are two major gaps where further research and technical policy development is urgently needed if we’re to build a different digital economy.

First, more detail is needed on the legal instruments and legislative action required to reshape and democratise governance and ownership of data. Second, further work is required on what the priorities should be for the development of an alternative public infrastructure, how it should be scaled and costed, and what are the technical gaps that must be overcome.

To shift the balance of power on this issue, it is critical to unite a broad range of interests behind a strategy for democratising data and the digital infrastructure. This can be done by surfacing the common interests of disparate groups who lost out with the status quo – whether those concerned about privacy, the economic effects of monopoly, smaller firms shut out of innovation, civic groups who would benefit from access to data, local authorities who would benefit from public data curation etc – and who have an interest in a more ambitious public agenda.

Fortunately, there is ample opportunity to prefigure alternative arrangements in the here and now. Taking inspiration from cities such as Barcelona, local authorities, city deal regions, or the Mayor of London could act now to begin to rework contracts to ensure data generated in the public realm remains public, take infrastructural projects back into public control, and better curate their data to open up to the public. Reclaiming data sovereignty, as Francesca Bria has argued, can happen at the local level, advancing ahead of any national policy change.

Critically though, local action isn’t enough. The boundless ambition of the platform giants marks a potential step-change in the wealth and power of private economic actors. If there is one thing the Left can do to create real change in this area, it is to make clear and public the transformative power of the tech giants – and the need for an emancipatory vision and politics of our own to shape digital technologies and data toward the common good.

This essay originally appeared as a chapter in the eBook 'New Thinking for the British Economy' which can be downloaded for free here. Printed versions of each chapter are also available via Commonwealth Publishing .

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