Policies for the platform economyCurrent trends and future directions

IT for Change | 2018

Licensed under a Creative Commons License Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4)

© IT for Change 2018

Research coordination team

Principal Investigator: Anita Gurumurthy Lead Researchers: Deepti Bharthur, Nandini Chami Research Assistance: Sarada Mahesh, Vineetha Venugopal, Meenakshi Yadav Design: Meenakshi Yadav, Prakriti Bakshi

This report compiles emerging reflections and insights from theresearch project ‘Policy frameworks for digital platforms - Moving fromopenness to inclusion’. The project seeks to explore and articulateinstitutional-legal arrangements that are adequate to a future economythat best serves the ideas of development justice.This work is drawnfrom preliminary research being undertaken by an interdisciplinaryresearch network from the global South and North. The initiative is ledby IT for Change, India, and supported by the InternationalDevelopment Research Centre (IDRC), Canada.

Contents

i. Research overview ii. Sectoral snapshots Ride-hailing E-commerce Agriculture & Grocery e-tail Fintech Video-on-Demand Care work Tourism & Hospitality iii. Platform governance: crosscutting issues Setting the context 1. Macro-economic policy frameworks for an inclusive digital economy 2. Data governance for economic sovereignty 3. Level playing field in the age of digital platforms 4. Platformization and livelihood security 5. Citizen rights in a datafied society 6. Reframing global economic justice 7. Strategies for equitable platformization iv. References

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Research 

Overview

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Research themes and sites

AFR

ICA

EUR

OPE

NIGERIA Towards inclusive platformization inNigeria (Mobile money, e-commerce, navigation)

SOUTH

AFRICA

Investigating operational and laborpolicy frameworks for taxi-hailingplatforms: Uber and Taxify in SouthAfrica (Ride-hailing)

ITALY,

BELGIUM,

FRANCE

Protection of users in the platformeconomy: A European perspective (Ride-hailing, hospitality, gig work)

UK Data policies: Regulatoryapproaches for data-driven platformsin the UK and EU (Data governance)

ASI

A

CHINA

PHILIPPINES

INDONESIA

INDIA

Deliver on the promise of the platform economy in China: A policy agendafor inclusive development (Ridesharing, food delivery)

Overworked and undervalued: Are local digital platforms transforming thenarratives of care workers in the Philippines? (Care work)

Making travel platforms work for Indonesian workers and smallbusinesses (Tourism)

Farm to Fork: Understanding the role of digital platforms inagriculture, e-tail and FaaS (Agriculture and grocery e-tail)

LATI

N

AM

ERIC

A

NO

RTH

A

MER

ICA

BRAZIL A new land of giants: Policy for digitalplatforms in media and audiovisualmarkets in Brazil (Video-on-Demand)

ARGENTINA,

URUGUAY

URUGUAY

Mapping Rioplatense platformeconomy: The case of MercadoLibrein Uruguay and Argentina (e-commerce)

Peer to Peer lending platforms as toolsfor financial inclusion in Uruguay(Fintech)

CANADA Research and policy makingthrough the data of platformenterprises (Data governance)

Research overview

Platforms, as understood through informational capitalism,are not just online marketplaces; they are the market makersof today. As a set of digital frameworks for social andmarketplace interactions, platforms replace andrematerialize markets, restructuring both economic exchangeand patterns of information flow. Platforms are to thenetwork age what the factory was to the industrial revolution– the principal site of economic activity around whicheverything else is organized. As a key economic phenomenon of the day, platforms shapesociety and social institutions; the algorithms scaffoldingthem are the new determinants of social order. This processof how social ordering takes place through platformization isa vital area of study. Unpacking what comprisesplatformization would imply taking a close and critical look atthe distinctly new set of economic relations arising throughcontinuous and pervasive datafication and the sophisticateddigital intelligence that runs on digital networks, and theimplications of this shift for social power structures. Much is at stake here, with jobs, skills, productivity andgrowth in the future economy tied to the ‘platform turn’ ineconomic organization. The fact that the economy in itsentirety is being recast by platformization also means thatpolicy processes must concern themselves with a wholerange of social and economic considerations necessary toproduce a future world that is equitable and inclusive.

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The public policy challenge is rather urgent given that thedigital economy rewards the very few who control digitalinnovation, exacerbating inequality globally. However, as with all times of paradigmatic change,institutions are falling behind in their attempts tounderstand and measure up to policy making in theplatform economy. Using this gap as a starting point, theproject, ‘Policy frameworks for digital platforms - Movingfrom openness to inclusion’, engaging a world-widecommunity of researchers (see page 38-39 for details) ledby IT for Change, India, and supported by IDRC, Canada,has attempted to bring systematic evidence onplatformization and its policy implications, nationally,regionally and globally. The key objectives of the project are to build a strongempirical base of the state of play of the platform economyand analyze the institutional-legal contexts forrecommending policy frameworks to tackle inequality,promote inclusion and advance development justice. This report presents emerging insights from the researchstudies being undertaken under the project. Covering 14countries and a range of domains and sectors, it examinesthe current trends in platformization, mapping the emergingpolicy responses and challenges.

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IT for Change

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Ride-hailing

Care work

FintechTourism &Hospitality

Video-on-Demand

E-commerce Agriculture andGrocery e-tail

Sectoral Snapshots

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Ride-hailing

IT for Change

6 | This analysis draws from research undertaken by Ducato et al (2018), Mare et al (2018) and Chen et al (2018)

Ride-hailing - the practice in which individuals commute viaa private vehicle driven for a fee, arranged via an online app- is today the most recognizable handle of the platformizedeconomy. The widely used trope of ‘uberization', often usedto describe the platformizing economy, comes from therather contentious aspects of the ride-hailing sector. Theinflux of ride-hailing apps such as Uber, Lyft, Grab, Taxify,Didi and Ola have overhauled the transportation sectorcompletely. Since their advent, ride-hailing companies have mostlyoperated in a kind of regulatory wild west. Positioningthemselves as technological intermediaries who merelybring independent drivers and passengers together in amutually convenient arrangement, platforms have evadedrules and regulations applicable to traditional taxi services.In some jurisdictions, this has also allowed them to escapeliability with respect to both users and drivers. However, with rising reports of accidents, violence andassault, poor data practices, and the widening powerasymmetry between ride-hailing platforms and their workers,the policy vacuum in this domain has become more and

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Ride-hailing companies position themselves

as technological intermediaries

Evade rules and regulations

applicable to traditional taxi services

Escape liability with respect to both

users and drivers

(Belgium, China, EU, France, Italy, South Africa)

more apparent. National and city governments arescrambling today to create effective regulation that canrein in ride-hailing companies and ensure they functionwithin the ambit of regulatory frameworks. Judicialintervention has also been visibly on the rise as driversfind themselves pushed into an endless race to thebottom in the name of flexibility, without any safeguardsand protections afforded to employees. In 2017, South Africa’s Commission for Conciliation,Mediation and Arbitration (CCMA) passed agroundbreaking ruling that Uber drivers could formunions, bargain and strike, which effectively meant thatthey were to be treated like employees, and notindependent contractors. The ruling was made following acomplaint lodged with the CCMA by Uber drivers whoalleged unsafe working conditions and unfair dismissalswithout explanation. However, on the basis of a smalltechnicality, the labor court in South Africa overturned thisruling in January 2018. The court found that Uber driverpartners should have taken up their case with Uber BV,the international company registered in the Netherlands,rather than the South African subsidiary.

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EU Guidelines that apply toride-hailing platforms includeprior authorization and specificcriteria for road-worthy vehiclesthat can be used forcommercial services. Belgiumhas specific regulationwhereby drivers must obtainauthorization to either createtheir own company or operateas independent workers,including for platform basedride-hailing services. Driverswithout authorization cannotdrive for platforms. Ride-hailingplatforms have also beenunder the scrutiny of theEuropean Court of Justice andthe domestic courts. Recently,in the Elite Taxi v. Uber Spainand in the Uber France cases,the Court finally recognizedride-hailing platforms as atransportation service, subjectto appropriate regulation fortaxi services.

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China became one of the firststates to recognize ride-hailing ina clear policy framework. In 2016,the Interim AdministrativeMeasures for the Business ofOnline Taxi Booking Serviceswas issued by seven stateministries under the aegis of theministry of transport, whichplaces the regulatory standard fordigital platforms squarely alongwith urban taxi services. Thepolicy requires digital platforms toapply for a permit, registernetwork service records withauthorities, and comply with thecriteria for using both qualifiedvehicles and drivers as part oftheir service. These measuresalso allow for local oversight byvesting implementation of thesemeasures with transportdepartments at the municipallevel.

CHINA

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SOUTH AFRICA

EU

In South Africa, the NationalLand Transport Amendment Bill(2015) includes provisions for “e-hailing transport services” andmandates that drivers operatingthrough platforms should havetaxi operating licences and besubject to regulation byauthorities just like meteredtaxis.

Policy InterventionMany countries have taken thefirst step towards updatingtransport sector laws.

A number of regional unicorns have emerged in the globalSouth, giving well-entrenched platform companies from theUS and China sizeable competition. Rakuten in Japan andJumia in Africa have acquired popularity given their abilityto understand and adapt to the regional cultural andinfrastructural contexts and cater to local needs andperipheral markets. Similarly, MercadoLibre, headquarteredin Buenos Aires, Argentina, has gained a dominant positionin several Latin American markets. In the early 2000s, whene-commerce giants were still hesitant to invest in the region,MercadoLibre made forays into these markets and was ableto overcome several levels of infrastructural deficit through acombination of domestically led innovation strategies and aregionally coordinated push for policy shifts that couldfurther the growth of SMEs in markets such as Argentina.For instance, to optimize logistical models for the emergingplatform economy in Argentina, the company had to workaround the logistical deficiencies coming from colonialmodels of center to periphery transportation. It was thusable to develop a ‘capillary distribution model’ through whichSMEs in smaller locations could directly ship to one anotherrather than opt for lengthy and inefficient routing.MercadoEnvios offers traders on the platform an integratedlogistics, warehousing and shipping solution to strengthenits SME-led network of inter-regional commerce.MercadoLibre also created a mobile payments system,MercadoPago, to enable financial transactions, given thatelectronic banking systems were relatively underdevelopedin the early years of its operations. It has also beenadvocating for policy responses for fintech alternatives totraditional financial instruments. The network infrastructure itis has built across countries in the region has given a bigboost to SMEs in the region, affording them new marketopportunities.

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E-commerce

IT for Change

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In a mere span of two decades, e-commerce hasbecome an important engine of the global economy.Recent estimates from UNCTAD peg the value of theglobal e-commerce market at a whopping USD 22trillion, a far cry from its negligible share in the early1990s. This estimate includes the digitally-mediatedpurchase and sale of physical goods as well as deliveryof digital services and intangible digital products –spanning business-to-business (B2B) and business-to-consumer (B2C) transactions. The exponential growth in e-commerce has beenfuelled by powerful platform intermediaries who takeadvantage of the new forms of economic exchange andinformation flows that digital disruption makes possible. Relying on networked economies of scale and data-based market segmentation, e-commerce platforms re-orchestrate the relationship architecture involvingproducers, suppliers and consumers in ways thatensure end to end control. The power of platforms suchas Amazon and Alibaba stem from their ability to controlthe entire market ecosystem of retail trade, a veritablewinner take all model that is not just brokerage betweenbuyers and sellers. Their offerings span paymentservices for ease of purchase and sale on theirplatform, data advisories for suppliers, and digitalrefurbishment of brick-and-mortar retail experience ofconsumers. The ambition of these platformintermediaries is to enfold every single aspect of theretail sector.

(Argentina, India, Uruguay)

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This analysis draws from research undertaken by Artopoulos et al (2018)

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Pre-digital legal frameworks are inadequate toaddress the new challenges of regulating thedigital economy. For example, the EU has beenflagging taxation challenges in relation to lawsbased on ‘physical presence’.

In this hyper-competitiverace for global domination ofretail trade, e-commerceplatforms often flout existinglegal frameworks in laborrights, market competitionand consumer protection. Inthe US, Amazon is nowfacing a federal lawsuit forworking its delivery driverswithout breaks and failing topay them overtime. In India,the Confederation of AllIndia Traders complained tothe commerce ministryabout flagrant marketdistortion by e-commerceportals such as Flipkart andSnapdeal. In Nigeria, theonline platform Konga hasbeen found to be sellingcigarettes, in violation ofexisting law. 12

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In the current context of a weakening WorldTrade Organization, plurilateral agreements -such as the Regional Comprehensive EconomicPartnership and the EU-Mercosur tradeagreement - increasingly become the sites wherepolicy contestations on e-commerce play out.

POLICY CONTESTATIONS

At the global level, themoratorium on customsduties on electronictransmissions has been asore point in global tradenegotiations, especially fordeveloping countries whoforgo revenues from e-commerce transactions.Developing countries, ledby India and the AfricanUnion, have beenopposing the e-commerceagenda at the World TradeOrganization. They feelthat any bindingagreement on governanceof data flows at this stagewould hurt the interests oftheir nascent domestic e-commerce sector.

Platformization of the global economy has ledto all sectors, including manufacturing andagriculture, becoming 'servicified'. Secretnegotiations among powerful actors havesought to bring these sectors under a new setof ‘trade in services’ rules. Throughinstruments such as the Trade in ServicesAgreement (TiSA), global companies arelobbying to reclassify workers in varioussectors as 'service workers', developments thatare likely to atomise workers, and erode theirrights and bargaining power.

Agriculture &

Grocery e-tail

World over, agricultural value chains are seeing end to endtransformation on account of digital layers that intermediatevarious business and consumer end processes. Termssuch as ‘digital farming’ and ‘precision agriculture’ havebecome increasingly commonplace as the Internet ofThings allows more and more data capturing devices andagricultural machinery to produce intelligence that cancreate predictive models for effective farming practices. Buy and sell/ rental platforms are today able to facilitatemore direct sales and peer to peer sharing among farmercommunities. The growing global trend of grocery e-tailpoints to paradigmatic shifts, with consumer preferencesreshaping the supply chain. Trends indicate that both theagricultural sector in India and the grocery e-tail segmentare not impervious to the onslaught of platformization. To date, India continues to be a predominantly rural,agrarian economy. Even though the agricultural sectorcontributes only 16 percent to the Gross Domestic Product,it is the primary source of employment for over 49 percentof the population. However, prospects for the sector havebeen bleak for years now. High degrees of precarity, wagedepression, years of drought, and detrimental fallouts ofmacro-economic policy at national and global levels haveled up to an agrarian crisis.

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Given that India is one of the largest IT hubs in theworld, much hope is vested in the technology sector forsolutions to some of the most pressing challenges inagriculture. ‘Agritech’- the use of technology in farmingfor increase in productivity, efficiency and output - istoday a rapidly growing area in India. Supported by venture capital, a host of platformcompanies are working on different aspects of the agri-value chain, attempting to leverage the digitalopportunity for addressing traditional challenges in inputprocurement, cultivation practices, harvesting, andmarketing produce. There has been a notable rise inB2C and B2B marketplace platforms. Over USD 313million was invested in Indian startups and SMEsworking in this field, with India being one of the top sixactive geographies for agritech investments along withUS, Canada, UK, Israel and France. The Indian online grocery market is expected to reachUSD 40 million by 2019, and increase to 141 percent by2020, growing at a compound annual rate of 62 percent. Global platforms such as Amazon entered the food retailsector, with the liberalization of the FDI policy in 2016allowing for 100 percent FDI, as long as local sourcingrequirements were met. But the local sourcing clausecould likely to be revoked if India inks the regional tradeagreement - Regional Comprehensive EconomicPartnership - which will open the doors to global e-commerce giants in the food retail sector. A corporatizedand consumerized food retail model could be inimical tolivelihoods of small retailers and subsistence farmers,the majority of whom are women, who may lose out orget coopted into the new context on very unfair terms.

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IT for Change

(India)

This analysis draws from research undertaken by Gurumurthy et al (2018)

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AI in agriculture has been identified by the NITIAayog, a policy think tank of the Indiangovernment, as an area that is unattractive to theprivate sector because of externalities involved inbuilding large-scale agricultural data sets. Thepolicy thrust is therefore on the creation of publicdata infrastructure for agriculture, which can thenbe leased out to private companies, socialenterprises and researchers seeking to develop AIinnovations in this sector. This vision is beingrealized through the Farmerzone project led by theDepartment of Biotechnology. In a related move,the Indian government has also announced a‘Startup AgriIndia Scheme’ to subsidize digitalstartups in agriculture. A national digitalmarketplace for digital agricultural commoditieshas also been set up. However, farmers still preferlocal middlemen who also provide services rangingfrom credit to transport and warehousing. Trackingthe medium and long term impacts of these newdata infrastructures for how they have benefitedsmall and marginal farmers is important. Socialimpact assessments of AI innovations grounded inclear guidelines on ethics are also necessary.

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Fintech platformsCredit solutions

Grocery e-tail

Internet of things Drones Sensors GPS in agri implements

Data advisory

Logistics andmanagement solutions Buy and sell/rentalplatformsGovt trading platforms

Online B2C platforms Farm subscriptionservices

Precision agriculture

Farming as a service

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Data infrastructure for Indian agriculture 

PolicyIntervention

Fintech 

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Fintech - referring to a financial industry that appliestechnology to improve financial activities - is a rapidlygrowing global phenomenon. Platform based models todayare able to offer a range of financial services and productsthrough smart phones, including mobile banking,microfinance, digital wallets, insurance, crowdfunding, P2P(peer to peer) lending, cryptocurrency and more. As financial transactions move to the digital realm andbecome platformized, there are a host of regulatory issues toconsider - cyber security, identity and authentication, riskassessment, and so on. What makes fintech regulation acomplicated and fraught process are issues of jurisdictionaloverlaps between technology/telecom regulators andfinancial regulators such as central banks. In Nigeria, forinstance, while the telecom aspect of mobile money isregulated by the Nigerian Communications Commission, theCentral Bank of Nigeria regulates the financial servicesaspect. This has presented a regulatory grey zone. In 2014,a new set of guidelines for mobile payments were issued bythe Central Bank. However, uptake continues to be low, withmistrust in electronic payment systems, combined with otherfactors such as poor connectivity and low literacy. More recently, financial regulators have begun to recognizethe high risks associated with leaving the sector in aregulatory void. They are also cognizant of how micro-creditand other alternative finance instruments have spawnedcycles of predatory lending and debt traps among vulnerablegroups.

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FRIC

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(Brazil, China, Mexico, Nigeria, Uruguay)

Fintech platforms areincreasingly being looked to asan effective way to expandfinancial inclusion in severalparts of the world wherepopulations are unbanked(lacking access to formalfinancial instruments such asbanking and credit) orunderbanked (having pooraccess to financial instrumentsfor credit and savings). Using theubiquitous smart phone as adelivery mechanism, fintechplatforms have seen greatpopularity, especially in countrieswhere formal financialinstitutions have failed to coverpeople comprehensively.

This analysis draws from research undertaken by Ogunyemi et al (2018), Aguirre & Garcia (2018) and Chen (2018)

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Brazil and Mexico have established industry specificregulatory frameworks. In addition to updatinglicensing and compliance requirements for fintechplatforms, these policy measures also provide for taxincentives and other support mechanisms includingregulatory sandboxes, innovation hubs and fundingsupport.

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The Central Bank of Uruguay (UCB) has proposed anew categorization for “Peer to Peer LendingAdministration Companies”, which will apply totechnology platforms offering financial mediation. Suchentities will have to prescribe the limits of lending andwill not be allowed to manage client funds, thuseliminating the risk of speculative investing. In 2017,the country also passed a law that requires electronictransactions between financial intermediaries andmoney issuers via mobile phones and websites toensure interoperability between fintech actors andtraditional players. 26

BRAZIL & MEXICO

URUGUAY

China, which has seen aproliferation of payment apps,was one of the first states toregulate its large and growingfintech market. As early as2010, the People’s Bank ofChina (PBC) officiallymandated that all “non-financialpayment service-providers”seek appropriate approvals andlicenses from PBC. In 2017, thePBC required third partytransaction data on the apps tobe routed through its clearinghouse and capped the amounton QR code transfers at 500yuan. In 2018, UnionPay, anassociation of the Chinesebanking industries, developed anational technical standard formobile payments, thus creatinga common protocol. 25

CHINA

Policy Intervention

Video-on-Demand

IT for Change

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positive discrimination, with state policies seeking to make upfor the imbalance between international (mostly US) and localproduction and distribution, through cross-funding. TheNational Agency of Cinema, referred to as Ancine, has put inplace regulations that mandate levies from movie distributorsthat go towards the Audiovisual Sector Fund for funding theproduction of independent cinema. Cable operators are alsoobligated to carry public, community and universitybroadcasters free of charge. In addition, the Braziliangovernment requires a minimum quota of national content,including independently produced content, to be broadcast oncable television. Companies are incentivized in different waysto invest their taxes in national production. However, the advent of Netflix is increasingly rendering thisregulatory paradigm inapplicable. While Brazil is one ofNetflix's largest markets, the latter does not contribute in anyway monetarily to the domestic media economy. The processof content discovery is made out to be ‘neutral’. And yet, theplatform’s USP - its algorithmic recommendations for content(the primary way in which audiences make viewing decisions)- is not open to scrutiny. Netflix does not also make any dataavailable on its titles, user preferences and viewing statistics.Netflix positions itself as new and different from traditionalmedia content formats, exempting itself from regulationapplicable to traditional market players. Independent media inBrazil is thus at the mercy of a private data model that favorspopular cultural content from the global North.

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With higher speeds and more stable broadbandconnectivity, and the widespread availability ofsmartphones, the trend of Video-on-Demand (VoD) hasbeen on the rise. Netflix, once a home rental service forDVDs and now a VoD streaming service, is today in theranks of FAANG (Facebook, Amazon, Apple, Netflix andAlphabet [Google]), tech companies with the bestperforming stocks. With a global footprint thatencompasses over 190 countries, Netflix has emergedas a media powerhouse, producing content in differentregional and national markets that is distributed throughits platforms. Along with its contemporaries such asAmazon Prime Video and Hulu, Netflix has significantlychanged the way media content is distributed, accessedand consumed. VoD platforms are transforming habits, markets andcreative practices throughout the world, and existingregulatory frameworks are becoming increasinglyirrelevant to address the gaps in the media market. In thecase of Brazil, Netflix has directly affected the traditionalaudiovisual market, compromising local production,access to culture, and cultural diversity. The Brazilian media regulatory framework has providedstrong support and encouragement for local andindependent media production. The production of localmedia content in the country has historically relied on

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(Brazil, Thailand)

This analysis draws from research undertaken by Valente et al (2018) and Klangnarong (2018)

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In 2017, a bill was introduced toregulate VoD in Brazil, to ensure parity,put in place minimum quotas fornational content and mandateinvestment obligations in the nationalmedia industry. Proposed regulationwould also require VoD platforms toregister with Ancine, employ Braziliannationals with editorial responsibilities,disclose revenues and other businessinformation to Ancine, includeinformation about parental ratings, andposition Brazilian content prominently intheir catalogues. The bill is inpreliminary stages of discussion.

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Policy Intervention

In the EU, policies on local contentquotas for VoD platforms are currentlyunder deliberation, which will require thelatter to fund media content produced inEurope either by commissioning contentfor the platforms, or by supportingnational film funds throughlevies/surcharges on subscriptions, as isthe case in Germany.

In Thailand, where the market for content is yet to mature andconsumer choices with regard to media are limited, self-regulatorymechanisms are seen as a useful governance mechanism in theshort run. There has been a move in the ASEAN bloc to advocate forindustry self-regulation in the VoD sector. In August 2018, anagreement was reached following a round table discussion withrepresentatives from Netflix about putting in place a code of conductthat lays down commitments for VoD platforms companies on ratingfor appropriateness of content and complaint and redressmechanisms. In the longer term, policies on taxation and regulationto ensure fair competition and consumer protection will need to beput in place.

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Care work

As labor gets platformized, work as we know it has undergone atransformation. Care work, which refers to traditionally feminizeddomestic work including cooking, housekeeping, child-care etc.,has also come to be sought and arranged through digital platforms.These digitally mediated labor arrangements and negotiationsacquire gender specific complexities and contribute to discursiveideas about care work. In the Philippines, care work platforms are popular with upper classhouseholds and the urban elite who rely on apps such as WantedYaya and Cleaning Lady. These platforms, catering to new urbanmarkets in Metro Manila’s business hub, while advertising moderncleaning and care services that are professionalized and digitallymediated, continue to draw upon an established culture of viewingkasambahays (domestic workers or ‘yayas’ as they are referred tolocally) as maternal figures. These motifs and themes are evident intheir branding and marketing. For instance, as has been noted inIndia, advertisements of platforms offering care work services tendto reinforce social hierarchies and gender stereotypes, even asthey attempt to make it seem like a win-win for service seekers andproviders. Often, the argument made in favor of gig work is greater flexibilityand control for workers. What is observed in the case of care workplatforms - where there is a folding in of informal workarrangements into the formal sector - is the introduction of anadditional layer of control between the workers and their clients.The workers on these platforms are in effect the employees of theplatform owners, and not the independent economic actors thatthey are often portrayed to be.

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IT for Change

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(Philippines)

This analysis draws from research undertaken by Garcia et al (2018)

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Catering

to new urban

marketsPopular 

with upper

class

households

Given the grey legal zone that care work often operatesin, such a law is a progressive step towards ensuring fairwork practices and benefits for workers. However, in thecontext of on-demand cleaning platforms in thePhilippines, home cleaners, who happen to be mostlywomen, are considered third party or independent serviceproviders and do not qualify as domestic workers, as theyare understood to be taking up occasional gigs throughcleaning platforms. They are not eligible to receive any ofthe government mandated benefits received by regularemployees. Classified as “independent contractors”, theyneed to apply for social security benefits on their own, aprocess that proves to be difficult, cutting many out of thesafety net.

In 2013, the Philippines passed theBatas Kasambahay Act tostrengthen the rights of domesticworkers in the country. The Actoutlines the terms and conditionsof a domestic worker’s employmentincluding the scope of their duties,period of rest, minimum wage, andbenefits. Under this Act, adomestic worker or kasambahay is"any person engaged in domesticwork within an employmentrelationship, such as, but notlimited to, the following: generalhousehelp, nursemaid or "yaya",cook, gardener, or laundry person."

The Philippines Batas KasambahayAct excludes any person whoperforms domestic work onlyoccasionally or sporadically and noton an occupational basis.

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PolicyIntervention

Tourism &

Hospitality

Tourism as a sector has undergone many transformationsthrough platformization. Travel platforms such asTripAdvisor have become a veritable one stop shop -providing travel and tourism information, offering ratingsand reviews of experiences, places and accommodations,and facilitating bookings and reservations. For countrieswhose economies are highly dependent on tourism suchas Indonesia, travel platforms take the place of criticalgatekeepers who control the narrative of tourism. Curatedfor the gaze of the potential visitor, with a widely trustedratings and ranking system, these travel platforms havebecome a make or break decision factor for the moderntourist. This has both advantages and disadvantages forsmall operators in the industry. There are undeniablegains from visibility on travel platforms that small touroperators and property managers will attest to. However,given the fact that it is economies of scale that benefitmost from network effects, it is arguable if small playerswill benefit from platform mediation in the long run. In the case of Indonesia, given a decentralizedgovernance structure with high levels of local autonomy,disruptions brought forth by platformization of touristactivities throw up a mixed scenario. While Indonesia hasan evolved policy framework around its tourism economyin the form of a Master Plan for Tourism and a 10 Balisinitiative, it does not touch upon the role of platforms.

Policy actors such as the Indonesian government and unionshave also yet to fully recognize and respond to the advent oftravel platforms. Locally spearheaded boycotts of ridesharingand food delivery apps, which cut into the business of localtaxi operators and restaurants, indicate that there is anunderstanding of how the sector is vulnerable to digitaldisruptions, even though policy response is yet to emerge. In several European countries, services such as Airbnb thatconnect property owners and travellers for short term rentalshave revolutionized the hospitality industry. In fact, withoutowning any properties, Airbnb is today the largest provider ofaccommodation in the world. The growing popularity of rentalplatforms, considered by many to be a cheaper alternative tohotels, has created tensions between the traditionalhospitality industry and rental platforms. Platformization of travel rentals has also had an unanticipatedimpact on the housing market as more property ownerschoose to rent on Airbnb for small durations at premiumprices rather than opt for long term leases, thus effectivelyreducing access to affordable housing. Combined with other factors such as rising gentrification,these trends have squeezed housing markets. For instance,in Paris, where platforms such as Airbnb and Homeaway arepopular, properties are now exclusively being designed andmanaged to be let out on short-term rentals. Residentassociations, city councils and rental platforms are locked invarious contestations.

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(Belgium, France, Indonesia, Italy)

This analysis draws from research undertaken by Ducato et all (2018), and Bentley & Maharika (2018)

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In Belgium, guests have to pay theregional taxes applicable to touristaccommodations on bookingsmade through platforms. However,hosts are currently exempt fromtaxation, although platform basedservice providers are otherwisesubject to a tax regime. 42

PolicyIntervention

The French government has introducedthe Law for a Digital Republic, whichincludes specific provisions for homesharing arrangements that are platformmediated. Further, the provisions of theFrench Code of Tourism were modifiedand now stipulate that short termrentals booked through online platformsmust be declared to the local authoritiesand have a registration procedure inplace if operating in a municipality ofover 200,000 residents. The modifiedcode also prohibits home owners fromrenting their properties on platforms formore than 120 days over a year. Butthe measures have seen weakenforcement and easy workaroundthrough loopholes. More penalty basedmeasures are currently underconsideration.

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PlatformGovernance :

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 Crosscutting

  Issues

Setting the contextThe sectoral snapshots point to how platformization hasbeen a transformative phenomenon across sectors,reorganizing value chains and reconfiguring laborarrangements in ways that maximize control for corporations,while minimizing their liability. The ability of platforms toharness the large amounts of data generated through digitalactivity for building digital intelligence is at the heart of thiscontrol. It is the economic value of intelligence that propelsplatform companies today, the infinite possibilities toexternally monetize data through analytics and AI intorevenue models. However alternative models do co-existwith mainstream models, following principles ofcooperativism. The all-encompassing consolidation of the data regime in thehands of private technology corporations, and the associatedpotential for platform excess and abuse, is perhaps the mostpressing global policy challenge of our times. Data is withoutdoubt the starting point of conceptualizing any effectivegovernance of the platform economy.

They have also pointed to the need for strengthening theoffice of the Privacy Commissioner, which currently lacksenforcement powers. Similarly, with respect to datajurisdictions, Canada’s long standing policy has beenthat of data responsibility rather than data localization.This position is now more contentious as significant tradenegotiations underway, such as the Trans-PacificPartnership and the North Atlantic Free TradeAgreement, could determine how Canadian citizens’ datarights will be decided. As algorithms move privacydebates in new directions, there is an increasingrealization that new approaches which recognize thethreats of surveillance capitalism are needed. The EU General Data Protection Regulation (GDPR),which came into effect in May 2018, marks theculmination of long debates about privacy and personaldata protection in a surveillance society and economy.Undoubtedly the most comprehensive data protectionregulation to emerge from the developed world, theGDPR is today the gold standard of personal datagovernance and reinforces citizens’ rights to be free fromcorporate and state surveillance. The law, which clearlyincludes platforms in its scope, defines consent as activeand ongoing, affording individuals the right to withdrawconsent at any time. It also stipulates purpose limitationrequirements and prohibits the processing of sensitivepersonal data. Significantly, the GDPR has extraterritorialapplicability and covers data controllers and processorsoutside the EU if they offer goods and services to, ormonitor the behavior of, EU data subjects.

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Countries that have had long standing policies on data todayfind themselves engaged in the task of bringing legacyframeworks up to speed. For instance, Canada’s PersonalInformation Protection and Electronic Documents Act(PIPEDA) foregrounds the soft power of self regulation toensure that personal data is ethically brokered. However, in anage of commonplace data violations, civil society and policyactors within the country have pointed to the Act’stoothlessness and weak compliance.

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Trends in developed countries (Canada, EU) 

22 | This analysis draws from research undertaken by Reilly & Munoz (2018), and Hintz & Brands (2018)

While a groundbreaking first for data protection, thepolitical economy of platformization has rendered aninstrument like the GDPR limited in its ability to securethe rights of users. Consent is often a relatively easybarrier for most platforms to cross. Critics of dataportability have also highlighted that its scope is toolimited to significantly counter platform power, asplatforms still get to exercise control over derived data ofthe data subjects to build the algorithms that drive theirrevenue models. With the rapid strides in AI, datacapitalists thus continue to be main arbitrators of theglobal marketplace. The realpolitik of trade and the ability of countries tocomply with the exacting cross-jurisdictionalrequirements of an instrument such as the GDPR hasalso been highlighted by policy actors in the global Southas a barrier to development. Given that even developedcountries like Canada are concerned about theircontinued ability to do transatlantic business in the newdata protection regime, developing countries who simplycannot hope to bring data capabilities and compliancestandards up to date in a quick time frame stand to losefar more. This is not merely about a loss of markets, butalso, people's livelihoods. It is vital that countries of the global South define andcarve out their approaches - national and global -accounting for their economic history and the concreteopportunities of the fourth industrial revolution. Whileframeworks of the North offer indications and insights,the task ahead for countries of the global South is clearlyto reflect upon, and adopt, strategies for data and digitalinfrastructure that work for the rights and developmentpriorities of their citizens.

As a way out, platformscan pursue “legitimateinterests” as a legalground for processingdata. Recital 47 of theGDPR states: “[t]heprocessing of personaldata for direct marketingpurposes may beregarded as carried outfor a legitimate interest.”

What it says... But...

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GDPR, a score card

Consent as an activeand ongoing choice, withthe right to withdrawconsent at any point,and tighter requirementsfor expanding purposelimitation.

Users can moveinformation acrossplatforms, preventingvendor lock-in.

Platforms are still able tomonetize derived data.

Covers data controllersand processors outsidethe EU if they offergoods and services to,or monitor the behaviourof, EU data subjects.

Creates exactingcompliance demandsfor developingcountries.

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1. Macro-economic policy frameworks for an inclusive digital economy

Meaningful inclusion in the digital economy is aboutensuring that macro-economic structures supportthe flourishing of human capabilities and well-being,thereby furthering Amartya Sen’s vision of‘development as freedom’. Ongoing trends inplatformization and datafication of the economy -the rise of the digital corporation, exacerbation ofwealth and income inequality and theenvironmental crisis that confronts us - make this adaunting task. The global network-data structure“brutally expels” people, places, and ways of life thatdo not fit into its logic. Given that there is no sector of economic activitythat is outside the digital paradigm, a new vision andapproach is needed to ensure that the digitaleconomy can be inclusive. Emerging policydilemmas and directions in a range of sectors havebeen discussed in the previous section. Protectingcitizen rights and furthering economic and socialequality demands renewed effort to tackle cross-cutting concerns such as competition law, laborrights, consumer protection, tax justice, platformneutrality, and so on.

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There are no national level datasets that can helppolicymakers assess the specific implications ofdigitalization, platformization and datafication in order toplan for the digital/ digitalizing economy. Nationalgovernments across the board find themselvescompletely lacking the measurement tools andparameters to systematically assess changes ineconomic value, job structure (potential job creationand loss), levels of inequality, environmentalsustainability etc. This is a barrier to the development ofevidence-based policy frameworks for an inclusivedigital economy.

Government agencies, especially in the global South,are not fully able to grasp the complexities of the digitalcontext as it intersects with traditional policy domains.Working with an ‘ICTs-as-tools’ framework, they often donot account for the paradigm shift underway. This leadsto a governance deficit in the platform economy.

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A key mandate forinternationalagencies addressingeconomicdevelopment is thecreation of indicatorsfor measuring thedigital economy, withan explicit focus onvalue creation anddistribution.

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Governments should invest in the creationof a holistic, evidence-based strategicroadmap. They need to:

build the capacities of officials in publicsystems to appreciate the systemicchanges and respond to the complexity inthe digital economy.

assess potential gains and losses in thetransition to a digital economy, withparticular focus on citizen rights, equity andsustainability.

adopt a two pronged approach, reframingpolicies in traditional socio-economicsectors and design differentiated policiesfor data (personal, community, corporate,infrastructural and sectoral).

WHAT CAN BE DONE?

create institutional mechanisms for socialaudit of platforms.

introduce applied computational thinkingin educational curriculum to create futurecitizens who can optimally participate inthe platform society.

The prevailing culture of data extractivism can becountered only by moving to a data governanceframework that acknowledges privacy protection andeconomic justice as interrelated end objectives. Theconversation on data governance should therefore notbe limited only to reasonable grounds for personal dataprocessing. It should concern itself equally with theskewed distribution of value and concentration ofeconomic power in the digital economy. This calls forsafeguarding the right to economic self-determinationof individuals and communities and their right todevelopment.

2. Data governance for economic sovereignty

In the digital economy, big tech consolidates itsposition through the digital intelligence it cancapture through unrestricted cross-border dataflows. With no space for domestic digital industryto grow, developing countries find themselveslocked into low value parts of the digitaleconomy.

Even countries that were promising tech hubs inthe last decade - with vibrant IT-ITeS sectors - are losing out, as digital intelligence-ledeconomic reorganization undercuts theiradvantage.

The potential of data and AI innovation to furtherpublic interest outcomes in key sectors such asagriculture, health, education, city planning etc.,remains largely unexplored.

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Governments need to develop a roadmap for public datainfrastructure. This includes the creation of sectoral dataand digital intelligence systems for core socio-economicdomains such as agriculture, transport, trade andcommerce etc., that can, inter alia, support policydecision-making. Strategies towards this include:

Digital industrialization pathways and national datastrategies that focus on infant industry protection forlocal digital and AI startups can encourage a vibrantculture of data-supported innovation.

WHAT CAN BE DONE?

Defining concretely how ‘AI for social good’ can beharnessed to further equality and inclusion isanother imperative.

Digitizing legacy data sets to build digital intelligencesolutions with due attention to privacy, transparencyand accountability safeguards. Mandating that private platforms in key sectors sharecritical data they collect with state agencies, withsafeguards for protecting user and citizen privacy.To support essential public services, like citytransport or health care, companies must beobligated to open up such public data for publicinterest. For example, the municipality of Curitiba inBrazil enacted legislation that requires platformcompanies such as Uber to share trip-relatedinformation with municipal authorities, except routinginformation, which may compromise user anonymity. Building public digital infrastructure that can, overtime, contribute to the aggregation of data and thecreation of digital intelligence solutions. For example,the Government of India’s FarmerZone project seeksto build a universally accessible, centralized cloud-based platform that brings together data setspertaining to various aspects of the agricultural valuechain currently fragmented across variousinstitutions and agencies.

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As per the draft National E-commerce Policy2018, India envisages a differentiated approachto the governance of cross-border data flows; aremoval of all restrictions in the interest of thedomestic IT & startup sectors, provided thatthere are no personal or community dataimplications, and a localization approach,privileging local economic autonomy, for born-digital, ‘community data’ collected by variousplatforms.

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Developing countries need to evolve a policyresponse to data flows/data localization that issegmented and sector-specific, and in line with theirstrategic economic interests.

Digital platforms often self identify as mere intermediaries. Such conceptualization has gained tremendous ideologicalcurrency, influencing the discursive frameworks in whichpolicy makers develop regulatory responses. However, withthe growing clout of technology giants and the associatedpolitics of their data capture, there is a growing rethink abouthow they can be regulated. For a healthy platform economy,robust frameworks are needed - to prevent anti-competitivepractices, create fair and equitable taxation regimes, enforceaccountability of platform intermediaries, and evolveappropriate policies for foreign capital flows. In addition tothis, positive discrimination policies to foster domesticinnovation and boost the chances of MSMEs in a datafiedeconomy are vital.

Canadian thinktank CIGI pointsout that “Data holdings are now akey element of a business’ abilityto dominate a market and stifle

competition.”

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3. Level playing field in the age of digital platforms 

Governments find current competition frameworksinadequate to deal with the unprecedented growth ofplatforms, with most existing frameworks being siloedin their approach and anti-trust authorities lacking theknowhow to deal with the new paradigm. It is worryingthat in 2016, the South African competitioncommission ruled in favor of Uber despite the strongcase presented by the South African Metered TaxiAssociation regarding its antitrust practices. Uber hasconsistently maintained in different jurisdictions that itis not a transportation provider but a technologyservice.

MSMEs are struggling to succeed in a scenariowhere they have only two options - either be ‘boughtout’ or ‘run out of business’ by big platforms.

Tech giants wield inordinate control over the digitalintelligence regimes critical for success in theeconomy that smaller players do not have access to.

Global capital flows in the platform economy follow anorth to south trajectory. Southern governmentseager to invite investments may hence choose tooverlook platform excess.

Convenient ambiguities allow for high levels of taxevasion, which means that local economies do notreceive revenues due to them.

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At the national level, countries need to adopt a domainagnostic competition law that can apply to allcommercial activities, including platforms and onlinebusinesses, to prevent bid-rigging, predatory pricing,tying and bundling by dominant players, unfair exerciseof monopsony power, and anti-competitive mergers andacquisitions (such as the Philippines Competition Act,2014 and the proposed law under deliberation inNigeria).

Domestic innovation needs to be fostered throughincentivizing startups and MSMEs, through:

Public data strategies for open data and public AIarchitectures in various domains. For example,intelligence based on climate or soil data can beof great use for women-run farmer producerorganizations.

Startup incubators such as the 1000 startupsprogram in Indonesia. Tax incentives to allow MSMEs greater capitalstability. For example, the proposed InnovativeStartup Act in the Philippines provides for taxexemptions to local startups during the first twoyears of their establishment.

States should invest in upgrading infrastructure insectors such as connectivity, banking and logistics toenable MSMEs' integration into the platform economy.

WHAT CAN BE DONE?

Countries should create tax-compliancepolicies to ensure local economies benefitfrom the presence and operations of digitalplatforms. The European Commission has pushed forplatforms to be liable for VAT taxes whenimporting goods from third party states. In France, the ministry of finance has publisheda report on taxation of earnings generatedthrough platforms that advocates three tiertaxation. In Belgium and France, information regardingrevenues generated by the platform isautomatically relayed to the tax authorities,should they opt into the graded tax system. In Belgium, a bill was passed in July 2018addressing taxation of “collaborative economy”platforms, covering interactions between non-professional peer users. Licensed users canbenefit from a tax exemption rate of up to EUR6000 under the rule. In 2013, the Philippines introduced a specifictax on electronic commerce purchases.

The re-engineering of labor marketsthrough increased automation hasled to a slew of inevitable questionsabout the ‘future of work'. Those atthe lower rungs of formalemployment and others in theinformal sector are highly vulnerableto enforced obsolescence or loss ofeconomic autonomy.

Developing countries increasinglydeal with a technical workforce that isunderskilled to perform optimally innewer paradigms driven by ArtificialIntelligence, thus losing out oninnovation opportunities.

The guise of flexibility accorded togig work does not hold up. Mostplatform workers face high degreesof precarity in their operations, workunreasonable hours and findthemselves unable to avail even themost minimum of social benefits andsecurities.

A gender based segmentation in thegig economy reinforces women’s lowjob status and earnings.

4. Platformization and livelihood security

In the era of platforms, there is a reconfiguration of labor and assetarrangements from internally sourced/held to externally managed. Often times, these are hidden or invisibilized. Platforms orchestratea distribution logic that is inherently designed to exploit the weakestlink. What we witness today is a breakdown of the traditional socialcontract, with an absence of bargaining power for those withoutsocial capital. The precarity of work in the platform economy needsto be addressed through policies that can ensure people do not fallout of the safety net and can be guaranteed fair and equitablewages and decent conditions. In addition, the livelihoods of peopleat the margins, small traders or farmers, who may be vulnerable inthe shift to platformization, need to be protected.

In terms of ride-hailing, China has one of the most clearlyregulated markets. However, decentralization at theprovince level has created disparities in who can, andcannot, work for a ride-hailing platform. For example,Beijing has in place strict "double local" rules which requiredrivers to have a Beijing residence registration and vehiclesthat are registered in the city. Shenzhen, on the other hand,allows migrant workers without local residence permits tobecome drivers. Thanks to recent regulatory measures, workers can avail ofportable social security benefits through an online socialsecurity platform. While these measures stress the need forcompanies to provide social security to contracted workers,the benefits of such measures do not accrue to a majority ofplatform workers who are considered “affiliated partners”and denied any direct or indirect labor relations with theplatform.

Ride-hailing in China - implications for labor

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WHAT CAN BE DONE?

Social protection and traditional employment benefits mustbe extended to platform workers. This should include:

Supportive tax mechanisms to allow them to reportearnings and be taxed fairly. The Belgiangovernment has introduced favorable tax regimesfor gig workers and is also reviewing options toextend social protection to them.

Systems of liability for platforms, including thirdparties managing workers. In France, a new law - for providing accident insurance, continuingprofessional training, and collective bargaining rights- was introduced in the Labor Code in order toextend protection to platform workers.

Portable benefits scheme that allows workersto avail social security and health care benefits.

Targeted approaches that promote equalparticipation of women in the gig economy, withdue attention to their rights.

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Policies promoting ‘solidarity economy’ models cancatalyze new forms of work organization at locallevels. They can also enable better bargainingpower with bigger platforms. Gig workers in Francehave been able to take advantage of existingcooperative institutions to further their rights.

In many recent decisions across the world, whereworkers have moved the court for fairer gig workterms and conditions, and the right to berecognized as employees, verdicts have beenfavorable. The judiciary needs to be at the forefront of newreadings of the digital economy and ensure thatthe law can uphold the spirit of labor and livelihoodrights. In May 2018, the Supreme Court of California stateruled that employers must treat workers who dowork related to a company's "usual course ofbusiness" as full-fledged employees. The case,which directly applies to delivery companyDynamex, also sets a precedent that couldpositively impact many types of workers inCalifornia, including care givers, drivers and otherkinds of gig workers.

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Governments need to invest in upskilling populations,especially vulnerable groups, to ensure they can fullyparticipate and avail of the opportunities in the platformeconomy. Such efforts must take special care to beinclusive of people whose livelihoods and occupations arevulnerable to the onslaught of digitization (automation,redundancy) and protect their long term economicinterests.

The digital economy has far reaching impacts on the rights ofcitizens. From the right to privacy and economic participation tothe right to cultural autonomy, datafication transforms the verymeaning of rights and claims of citizen-users. As workers,citizens maybe expected to forsake the right to privacy foraccess to livelihood. The marketplaces orchestrated byplatforms call for a new consumer consciousness thatcorresponds to the highly sophisticated, yet inscrutable,processes of platformization. Not only as individuals, but alsoas collectivities, citizens are experiencing the invasion of theircultural spheres, as platformization remediates consumption.

5. Citizen rights in a datafied society

Frameworks of data privacy hinge too heavily on‘informed consent’. Simplistic assumptions aboutuser ability to make rational choices about datadisregard data subjects’ differing capacities andlocations. They are also individual centric and do not account for community rights to data and thecontexts in which the latter may be harmed.

Current consumer rights frameworks are stillsteeped in older models of commerce and cannotmake platforms accountable to consumers andusers for unethical practices. These include:

In the push model of Video-on-Demand, platformsexpertly personalize content through algorithmicrecommendations. Thus, content that is notmainstream, not highly viewed or reviewed, notbacked by commercial boost strategies or from thecultural margins of communities and people riskserasure and obsolescence. Not only does this meanthe demise of media industries at the periphery, butalso a worrying universal content model led bypowerful VoD platforms.

Brokering and monetization of datawithout informed consent of consumers. Engaging in predatory pricing/lending toconsumers through data basedtargeting. For example, in the context offintech, the Financial Stability Board ofUruguay has expressed concern thatunchecked growth could lead topredatory lending.

Following discriminatory and harmfulpractices such as red-lining andinformation distortion.

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WHAT CAN BE DONE?

Frameworks of dataprivacy must maximizereal choice forcitizens. They mustprotect from harm andexploitation, includingthrough workplacesurveillance, and takeinto accountgroup/community rightto data, establishingthe data sovereignty ofthe data subject.

Consumer rightsframeworks should beupdated to apply to digitalplatforms. The FrenchGovernment has taken afirst step towards thisthrough its Law for a DigitalRepublic which adds to theFrench Code of ConsumerProtection. This provisionexpressly applies to digitalplatforms and requires themto clearly specify theprofessional or non-professional quality of theindividual providersoperating through them. Additionally, the GDPRenforces consumers rightstowards their data.

Governments shouldenforce quotas for local,indigenous andindependent content inthe catalogues of VoDplatforms that areintegrated and boostedthrough ‘search andrecommend’ functions,and afforded visibilitythrough positivealgorithmicdiscrimination.

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Today, companies with more than USD one billion in annualrevenue account for nearly 60 percent of total global revenue and65 percent of market capitalization. Big Tech companies are ontop of this heap, occupying five of the top 10 slots in the list oflargest companies in the world by market cap. Meanwhile, thelack of network infrastructure and data capabilities inhibitscountries in the global South from reaping the benefits of digitaltransformation. An increasing divide between, and within,countries suggests that the rules of the digital paradigm areantithetical to a fair and just world. Addressing the inequitabledistribution of income and wealth by putting in place institutionalframeworks that make the digital economy work for people and theplanet is an urgent imperative at international levels.

6. Reframing global economic justice

Transnational digital corporationsoftentimes flout national legislation,capitalizing on locational advantages.Holding them accountable for malpracticessuch as tax evasion, market distortion,failure to comply with labor laws, consumerrights violations etc., is one of the biggestchallenges in the current paradigm.

Existing trade regimes reinforce thedomination of northern digital corporations,blocking economic development pathways ofdeveloping countries.

The platformization of the everyday hasgone hand-in-hand with the financializationof everything. The conventional relationshipbetween technology companies and capitalmarkets has been altered by the entry ofventure capital wings of investment banksinto the space of funding digital startups andplatform companies. In many instances,venture funding pumps up firms andartificially keeps them afloat. The alliancebetween big tech and big finance points tothe risk of volatility in capital flows,especially in markets in the global South.

Current corporate tax regimes do not enablecountries to further the agenda ofredistributing economic value.

In 2016, OXFAM estimated that 82 percent of the overall wealthcreated went to the richest one per cent of the global population,while the 3.7 billion people who make up the poorest half ofhumanity, mainly women, got close to nothing. Economies ofthe global South find themselves unable to move into highervalue segments of the global economy. Within countries, thedivide between the share of capital and that of labor in the GDPis widening. This can be attributed to automation-induced jobdisplacement and shrinking opportunities for stable employmentas platformization ushers in asset light business models. Marketconcentration and monopolistic tendencies are becomingincreasingly entrenched. Trends indicate that in every sector ofthe economy, a few large corporations with data and AIcapabilities reign supreme, while smaller firms and startups findit increasingly difficult to disrupt the market.

The global inequality crisis

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Digital TNCs need to be brought into thebinding treaty for TNCs being negotiatednow. They have a responsibility to: 61

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WHAT CAN BE DONE?

The ongoing negotiations in the UN on ‘a legally bindinginstrument on the human rights obligations of transnationalcorporations and other business enterprises’ should beclosed without further delay. Specific provisions on theobligations of digital companies must be incorporated inthe binding treaty.

Strategic interests of developing countries can be betterprotected through regional blocs, for a fair e-commerceagenda.

Initiatives such as the EU’s Proposal for Fair Taxation ofthe Digital Economy, which calls for a shift in the basis oftaxation regimes from "physical presence" to "territorywhere profits are generated", present useful directions fornational policy.

Developing countries need to regulate their capitalmarkets by drawing up strategic Foreign Direct Investment(FDI) regulation. Current debates point to the need forprotection of critical and nascent economic sectors fromcapital market volatility. Mergers and acquisitions ofdomestic firms by transnational companies need informedregulatory oversight.

Uphold the right to free expression andassociation and not exercise private censorshipor control.

Respect and promote cultural diversity byincluding marginalized people's voices, content,languages and culture in line with existing globalframeworks, including UNESCO Convention onthe Protection and Promotion of the Diversity ofCultural Expressions.

Safeguard rights to privacy and personal dataprotection by being accountable to nationalprivacy and data protection regulators.

Comply with local presence obligations andsector specific regulatory frameworks, includingsubmission of compliance audit reports to hostcountry regulators.

What we know today as the platform economy is not a singularnarrative. The far-reaching negative impacts of unfetteredcapitalism on well being of people and the planet prompted arethink in the aftermath of the 2008 global financial crisis. Ascommunities, especially in the global North, soughtsustainable alternatives to the dominant economic model,digital technologies emerged as the primary conduit forrealizing the ideas of ‘collaborative consumption’. New socialand economic arrangements of work and consumptionenabled through digital intermediation quickly gained currency,albeit on local scales. It is worthwhile noting that it was thesuccess of early digital experiments that came out of theconceptualization of the sharing economy’, which paved theway for platformization of the global economy as we know ittoday. However, the rapid datafication of digital networks ledto a new model of informational capitalism, one that has in factexacerbated the very problem of market consolidation in thehands of a few large companies that collaborativeconsumption models attempted to move away from. Digital technologies have demonstrated the possibility forrevolutionizing production and consumption. What is reallymissing is the vital link in a platformizing economy todistributional equity, so that the gains of technology areavailable for all. The older ideas of social and solidarityeconomy, organized around values and practices thatforeground basic needs, inclusion, equity and sustainability, can find a new lease of life through alternative conceptions ofplatformization. The key here is a concerted policy effort tomove towards well functioning local economies that valuediversity in the marketplace, ensuring that innovation goeshand in hand with inclusion and equity.

7. Strategies for equitable platformization

Transnational models ofplatformization use networkedintermediation to organizeeconomic transactions that arenot accountable to local contexts.

Big platforms gear theirinnovations towards aggrandizingvalue generation for themselves.They are highly extractive,producing environmental andhuman externalities that are noteasily visible.

There are demonstrated platforminnovations that have optimizedvalue distribution in favor ofmarginalized communities, whichneed to be further developedthrough scaling strategies that areeffective.

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WHAT CAN BE DONE?

Governments should create regulatoryframeworks and incentivization mechanisms toencourage alternative platform models to takeroot. This includes: Enabling environments that formallyrecognize and support alternative platformmodels. France’s law on the Social andSolidarity Economy (SSE) of 2014 recognizesSSE actors, including cooperatives, as a specificmodel of entrepreneurship. The law promotesmeasures for SSE actors, such as, access tofinancing and public procurement andconsolidation of their networks. Innovative national policy pathways throughapplied research. In 2013, the Ecuadorgovernment set up a research effort for thecountry's transition to a “Social KnowledgeEconomy” based on peer to peer principles ofopen networks, peer production and aknowledge commons. Provisioning of public goods - digital(payment systems, data sets, connectivityarchitectures) and non digital (logistics,transportation infrastructure) - to lay theground for a culture of innovation. The UnitedPayments Interface, set up by India on a publicgoods model, allows all players - commercial orotherwise - to have a stable, trustworthy digitalpayments option.

Thingery, Canada - a platform startup that offersan inventory management and data trackingsystem for cooperatively run, community-levelgoods sharing services that operate out of urbanparks in the city. The co-operative project followsa membership based model. Members alsobecome owners of the Thingery and can takedecisions about its operations. Ekgaon, India - a technology solution provider incentral India that has successfully integrated itsFarming as a Service (FaaS) platform suite intothe operations of a network of farmer producercompanies. As a social enterprise, Ekgaon worksto pass value downstream in the supply chain,thus localizing the gains of the platform business.

Alternatives in action

Local governments should take the lead increating equitable and locally responsive modelsof platformization. City-owned public platformscan fill infrastructural gaps and directly feed intothe local economy. Seoul, in South Korea, hasplaced some restrictions on big platforms andpromoted the development of local alternatives. It has been working as part of the ‘Cities Alliancefor Platform Economy’ to create networkedmunicipal ownership models for platforms. Seoulalso offers a city-operated ride-hailing service. 68

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Research study

STUDY NAME

Investigating operational and laborpolicy frameworks for taxi-hailingplatforms: Uber and Taxify inSouth Africa

Admire Mare, Shepherd Mpofu, Sarah Chiumbu

South Africa

Protection of users in the platformeconomy: A Europeanperspective

Alain Strowel, Rossana Ducato, Anne-Grace Kleczewski, Enguerrand Marique, Céline Wattecamps

France, Belgium, Italy

Data policies: Regulatoryapproaches for data-drivenplatforms in the UK and EU

Arne Hintz, Lina Dencik, Joanna Redden

UK

Deliver on the promise of theplatform economy in China: Apolicy agenda for inclusivedevelopment

Julie Yujie Chen, Jack Qiu, Sophie Ping Sun

China

Caitlin Bentley, Ilya Fadjar Maharika Indonesia Making travel platforms work forIndonesian workers and smallbusinesses

Team Countries

Kemi Ogunyemi, Martha Onyeajuwa, Ogechi Adeola, Uchechukwu Aneke, Chika Nwogu, Onyinye Akagha, Azeezat Ajibola

Nigeria Towards inclusive platformization inNigeria

This report has been compiled from ongoing research as part of the 'Policy frameworks for digitalplatforms - Moving from openness to inclusion' project. Insights presented here draw from preliminarypolicy analysis undertaken by the research network. (See table for details).

Research study

STUDY NAME

Farm to Fork: Understanding therole of digital platforms inagriculture, e-tail and FaaS

Anita Gurumurthy, Deepti Bharthur, Nandini Chami

India

A new land of giants: Policy fordigital platforms in media andaudiovisual markets in Brazil

Francisco Brito Cruz, Mariana Valente, Maria Luciano

Brazil

Mapping Rioplatense platformeconomy: The case ofMercadoLibre in Uruguay andArgentina

Alejandro Artopoulos, Ana Rivoir, Santiago Escuder, Jimena Huarte

Argentina, Uruguay

Peer to Peer lending platforms astools for financial inclusion inUruguay

Mercedes Aguirre, Sandra Garcia-Rivadulla

Uruguay

Katherine Reilly, Carol Muñoz Nieves

Team Countries

Lisa Garcia, Jessamine Pacis, Titanne Barrameda

Philippines Overworked and undervalued: Arelocal digital platforms transformingthe narratives of care workers in thePhilippines?

Canada Research and policy makingthrough the data of platformenterprises

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References

1. Kenny, M., & Zysman, J. (2016). Rise of the platformeconomy. Issues in Science and Technology, 32,3.Retrieved from http://issues.org/32-3/the-rise-of-the-platform-economy/ 2. Cohen, J. E. (2017). Law for the platform economy. UCDLReview, 51, 133. 3. Chadha, S. (2014, December 9). Uber, Meru, Ola andothers: All taxi services refuse liability for drivers behaviour.First Post. Retrieved fromhttps://www.firstpost.com/corporate-business/uber-meru-ola-and-others-all-taxi-services-refuse-liability-for-driver-behaviour-1999231.html. 4. Decree of the Shenzhen Municipal People's Government2018 (Shz) no.29 (China). 5. Regulation (EU) 2011/181 of the European Parliamentand of the Council of 16 February 2011 Concerning theRights of Passengers in Bus and Coach Transport andAmending Regulation (EC) No 2006/2004 2011 (EU) 6. No Author. (2016, July 19). Global e-commerce market isworth 22 trillion: UNCTAD. Economic Times. Retrieved fromhttps://economictimes.indiatimes.com/industry/services/retail/global-e-commerce-market-is-worth-22-trillion-unctad/articleshow/53274475.c 7. See reference 2. 8. Akhtar, O. (2013, March 22). Rakuten: The biggest e-commerce site you’ve never heard of. Fortune. Retrieved from http://fortune.com/2013/03/22/rakuten-the-biggest-e-commerce-site-you-havent-heard-of/ 9. No Author. (2016, July 28). How Jumia earned theposition as the African Amazon in just four years. TextMaster. Retrieved fromhttps://www.textmaster.com/blog/jumia-african-amazon/ 10. Baron, E. (2018, August 28). Amazon delivery drivers

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worked without breaks, weren’t paid for overtime:federallawsuit. Mercury Times. Retrieved fromhttps://www.mercurynews.com/2018/08/28/amazon-delivery-drivers-worked-without-breaks-werent-paid-for-overtime-federal-lawsuit/ 11. PTI. (2017, September 23). Amazon, Flipkart, Snapdealviolate FDI rules, alleges CAIT. New Indian Express.Retrieved fromhttp://www.newindianexpress.com/business/2017/sep/23/amazon-flipkart-snapdeal-violate-fdi-rules-alleges-cait-1661751.html 12. Ezeamalu, B. (2018, September 11). How Nigeria'sonline stores flout country's tobacco control law. All Africa.Retrieved fromhttps://allafrica.com/stories/201809120011.html 13. Ekekwe, N. (2017, May). How digital technology ischanging farming in Africa. Harvard Business Review.Retrieved from https://hbr.org/2017/05/how-digital-technology-is-changing-farming-in-africa 14. No Author. (2016, February). Agriculture and food: therise of digital platforms. Paris Innovation Review. Retrievedfrom http://parisinnovationreview.com/articles-en/agriculture-and-food-the-rise-of-digital-platforms 15. Nielson. (2015). The Future of Grocery e-Commerce,Digital Technology and Changing Shopping PreferencesAround the World. Nielson. 16. Banerjee, S. (2016). Cobweb of the e-Marketplacemodel: FDI Guidelines for e-Commerce. Economic andPolitical Weekly, 51,36. 17. Government of India. (2017). Economic survey 2016-17.Department of Economic Affairs. Economic Division. Ministryof Finance. 18. Inc42. (2017). State of Indian Agritech 2017. Inc42

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19. AgFunder. (2016). Agtech Investing Report-Year inReview 2016. AgFunder. Retrieved fromhttps://research.agfunder.com/2016/AgFunder-Agtech-Investing-Report-2016.pdf 20. Morgan Stanley. (2016). AlphaWise eCommerce Survey:Here Comes Online Grocery. AlphaWise, Morgan Stanley 21. NITI Aayog. (2018). Discussion paper on nationalstrategy for Artificial Intelligence. NITI Aayog. Retrieved fromhttp://niti.gov.in/writereaddata/files/document_publication/NationalStrategy-for-AI-Discussion-Paper.pdf 22. No Author. (2017, September). Data driven solutions tosupport smallholder farmers make climate smart solutions.ICRISAT Happenings Newsletter. Retrieved fromhttps://www.icrisat.org/data-driven-solutions-to-support-smallholder-farmers-make-climate-smart-decisions/ 23. Central Bank of Nigeria. (2014). Guidelines on MobilePayment Services in Nigeria. Central Bank of Nigeria 24. Liebkind, J. (2017). Could Fintech enable a resurgencein predatory lending? Tech.Co. Retrieved fromhttps://tech.co/fintech-resurgence-predatory-lending-2017-04 25. Administrative Measures for the Payment ServicesProvided by Non-financial Institutions 2010 no.2 (China) 26. Decree No. 106/017, added to the Financial InclusionLaw 2014 19.210 (Uruguay). 27. Proposed Regulation on Cybersecurity Policies and theProcurement of Data Processing, Data Storage, and OtherCloud Computing Services 2017 57/2017 (Brazil). 28. Law for the Regulation of Technology-based FinancialInstitutions 2017 (Mexico) 29. No Author. (n.d). What are 'FAANG Stocks'.Investopedia. Retrieved fromhttps://www.investopedia.com/terms/f/faang-stocks.asp 30. No Author. (n.d). Where is Netflix available? Netflix.Retrieved from https://help.netflix.com/en/node/14164 31. Audiovisual Law 2001 no.8401 (Brazil) 32. Rouanet Law 2006 (Brazil) 33. Ancine Regulatory Notice on VoD Service 2018 (Brazil) 34. No Author. (2018, June 22). Asean VOD services

announce content code. Bangkok Post. Retrieved fromhttps://www.bangkokpost.com/business/news/1490014/asean-vod-services-announce-content-code 35. Jain, M. (2015, November 3). This online companyprovides maids - and let’s you pick them by religion andregion. Scroll. Retrieved fromhttps://scroll.in/article/766490/this-online-company-provides-maids-and-lets-you-pick-them-by-religion-and-region 36. Domestic Workers Act 2013 No. 10361 (Philippines) 37. Morris, H. (2017, November 9). The world's most prolificAirbnb owner has 881 properties in London and earns£11.9m a year. Telegraph. Retrieved fromhttps://www.telegraph.co.uk/travel/news/airbnb-top-earnings-cities-landlords/ 38. Silver, J. (2018, August 23). The Airbnb and the shortterm rental revolution. The Conversation. Retrieved fromhttps://theconversation.com/airbnb-and-the-short-term-rental-revolution-how-english-cities-are-suffering-101720 39. Alba, D. (2016, June). Airbnb is none too pleased aboutSan Francisco’s new crackdown. Wired. Retrieved fromhttps://www.wired.com/2016/06/airbnb-none-pleased-san-franciscos-new-crackdown/ 40. French Digital Republic Act 2016 Art.51 (France) 41. Décret n° 2017-678 to the Tourism Code 2017 (France) 42.Ordinance on the Regional Tax on TouristAccommodation Establishments 2016. No.2017-678(Belgium) 43. The Personal Information Protection and ElectronicDocuments Act (PIPEDA) 2015 (Canada) 44.Sen, A. (1999). Development as Freedom. Oxford:Oxford University Press. 45. Rodriguez-Montemayor, E. (2018, July 18). How thedigital economy has exacerbated inequality. INSEAD.Retrieved fromhttps://knowledge.insead.edu/responsibility/how-the-digital-economy-has-exacerbated-inequality-9726

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46. Sassen, S. (2014). Expulsions: Brutality and Complexityin the Global Economy. Harvard University Press. 47. An important step in this direction is the Working Groupon Measuring E-commerce and the Digital Economy set upby UNCTAD in February 2018. 48. Gurumurthy, A., & Chami, N. (2018). Data frameworksfor a right to development (2018). UNRISD. Retrieved fromhttp://www.unrisd.org/TechAndHumanRights-Gurumurthy-Chami 49. See reference 2. 50. Scholz, T. (2016). Platform cooperativism. Challengingthe corporate sharing economy. Rosa Luxemburg Stiftung 51. French Labor Code 2018. Art. L7342-1 (France). 52. Finley, K. (2018, May). A California ruling threatens thegig economy. Wired. Retrieved fromhttps://www.wired.com/story/a-california-ruling-threatens-the-gig-economy/ 53. French Digital Republic Act 2016 (France). 54. French Consumer Code 2017 (France). 55. Mckinsey. (2015). Playing to Win: The New GlobalCompetition for Corporate Profits. Mckinsey. 56. Pan, L., & Woelderen, S. (2017). Platforms: Bigger,Faster, Stronger. ING. Retrieved fromhttps://www.ingwb.com/media/1985605/platform-foundations-report-20170706.pdf 57. Oxfam. (2018). Reward work, not wealth. Oxfam BriefingPaper. Retrieved from https://d1tn3vj7xz9fdh.cloudfront.net/s3fs-public/file_attachments/bp-reward-work-not-wealth-220118-en.pdf 58. UNCTAD. (2018). Digital trade and industrialisation:Perspectives from the south. UNCTAD. Retrieved fromhttp://unctad.org/meetings/en/SessionalDocuments/gdsecidc20180308_Key%20Messages%20of%20the%20Meeting.pdf

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59. See reference 45. 60. The Economist. (2016). The Rise of the Superstars.Special Report. Retrieved fromhttp://www.economist.com/sites/default/files/20160917_companies.pdf 61. IT for Change. (2017). Draft input text for the UN treatyon TNCs and human rights. IT for Change Retrieved fromhttps://www.itforchange.net/draft-treaty-on-transnational-corporations-and-human-rights 62. Castells, M. (2017). Another Economy is Possible:Culture and Economy in a Time of Crisis. John Wiley &Sons. 63. No Author. (2013, March). All eyes on the sharingeconomy. The Economist. Retrieved fromhttps://www.economist.com/technology-quarterly/2013/03/09/all-eyes-on-the-sharing-economy 64. Lanfranchi, G., & Madariaga, J. (2018). Collaborativecities: the digital economy transforming urban developmentin G. Lanfranchi,. & J. Madariaga.,(Ed) Urban Transport inthe Sharing Economy Era-Collaborative Cities. CIPPEC.Retrieved from http://www.cippec.org/wp-content/uploads/2018/09/UrbanTransport-completo-web_CIPPEC.pdf 65. ILO. (2015). Public policy in the social and solidarityeconomy: Towards a favourable environment. ILO.Retrieved fromhttps://www.ilo.org/global/topics/cooperatives/publications/WCMS_535625/lang--en/index.htm 66. Law on the Social and Solidarity Economy (SSE)2014. No. 2014-856 (France). 67. Bauwens, M., & Restakis, J. (2015). CommonsTransition: Policy Proposals for an Open KnowledgeCommons Society. P2P Foundation: Amsterdam. 68. See reference 50.

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