July 3, 2019

The creation of international rules on the digital economy was the item agenda Prime Minister Abe Shinzo most focused on in the G20 Osaka Summit last month. PM Abe on June 28, the first day of the summit meeting, organized an event with the participation of like-minded leaders and succeeded in adopting the “Osaka Declaration on Digital Economy”.

The digitalized economy, which is characterized as the expansion of business transactions through the Internet, has changed the social structure and has been influencing people’s everyday lives.

IT businesses provide various services which include e-commerce, information retrieval, and social media. Their market power has increased, and a high concentration of profits in this business sector has accelerated. IT companies collect huge volumes of data regarding service users, such as their attributes and behaviors, and use the collected information for advertising and other commercial purposes, which has aroused public concern over data privacy.

In addition, recently, a new business model pervasive in every corner of the society uses artificial intelligence to analyze data, develop profile of ideal persons, give scores to customers and employees, and differentiate between them.

No rule exists

The European Union last year implemented the General Data Protection Regulations designed to drastically strengthen privacy protection. The newly-implemented EU rules allow individuals to exercise their right to have corporations delete their data and to object to the processing of personal data, including profiling. The GDPR also stipulates individuals’ right not to be subject to automated decision-making by AI.

The Civil 20, one of the eight G20 Engagement Groups delivering their recommendations to an annual forum of the Group of 20, points out that the EU rules are still insufficient due to an essential lack of regulations on the commercial use of personal data.

The C20’s policy proposal for this year’s G20 summit, called Policy Pack 2019, states that there is a virtual absence of regulations that safeguard against unscrupulous use of personal information and protect the rights of consumers in e-commerce.

The C20 in its policy proposal states, “The transboundary nature of the digital economy requires global governance mechanisms with universal state memberships”.

G20 efforts for on digital economy score lowest mark

PM Abe, who chaired the G20 Osaka summit, paid little regard to the privacy issue. In the June 28 event attended by like-minded G20 parties, PM Abe and U.S. President Donald Trump stressed the importance of economic growth induced by free flow of data, but made no mention about the protection of personal information.

The Osaka Declaration on Digital Economy, which the Abe government took the lead in drawing up, does not touch on the privacy issue and ignores presenting even a rough idea about what rules may be necessary. It just expresses its intent to promote “international rule-making on trade-related aspects of electronic commerce” based on the business-oriented idea that data is becoming “an important source of economic growth”.

The G20 Osaka Leaders’ Declaration, which was adopted on June 29, states that the leaders will continue to address “challenges related to privacy, data protection, intellectual property rights, and security”. However, this is in order to “further facilitate data free flow” and the declaration does not include concrete measures to respond to these challenges.

C20 members gave the lowest mark of 1 in a five-point scale to G20 leaders’ efforts regarding digital economy issues at a press conference held at the venue of the G20 Osaka summit meeting.

They said, “The G20 leaders had no intention to question their assumption that the digital economy and free flow of data are to be welcomed as they contribute to economic growth. They give a low priority to human rights. It is necessary to consider the opinions of developing nations which are not present here and regulate the activities of for-profit companies.”

Past related article:
> G20 Osaka Summit fails to respond to global challenges [June 30, 2019]