What Facebook’s Data Scandal Really Means for Regulators
China is racing against the U.S. to dominate the development of Artificial Intelligence.
The scandal over the alleged abuse of Facebook Inc.’s user data is unfolding a long way from China, and yet privacy regulators in Beijing have been watching intently.
Their interest shows how all three big players in the technology world — the Americans, Chinese and Europeans — are feeling their way to balance the demands of consumers for privacy and of governments for security.
But they’re also competing to shape the rules of the game for internet companies and, for the U.S. and China in particular, to maximize access to data for a bigger goal: to dominate Artificial Intelligence, the next frontier in machine learning.
“All of these governments and companies are in the middle of trying to figure out what data governance should look like,” said Samm Sacks, senior fellow in the technology program at the Center for Strategic and International Studies, a Washington think tank. “And this is happening in a global context that will have implications for trade and for research and development in AI.”
New Chinese privacy standards take effect on May 1. The European Union’s sweeping General Data Protection Regulation enters force just over three weeks later.
Now the prospect of tighter data privacy legislation in the U.S. just got a little closer too. Facebook Chief Executive Officer Mark Zuckerberg is preparing to testify to Congress on how Cambridge Analytica, a company that worked on Trump’s election campaign, secured the data of 50 million Facebook users. That news helped to send tech stocks tumbling in the U.S. and China last week.
“This Facebook incident sounded the alarm for Chinese data regulators and controllers,” said Lu Chuanying, a cyber-security researcher at the Shanghai Institute for International Studies who helped draft the new data privacy standard for China’s tech companies.
“If that’s a problem for the largest social network platform in the U.S., then that can be a problem for Chinese companies,” as they wrestle with potential responsibility for third-party data abuse, he said.
AI has exploded in recent years as ever more datasets become available to be mined by algorithms.
From robotics, to language and image recognition, to heath care and military applications, many expect AI to drive future economic growth and define great power competition. As Russian President Vladimir Putin put it last year, “the one who become the leader in this sphere will be the ruler of the world.”
China’s President Xi Jinping has set out an ambitious plan to dominate in AI by 2030, overtaking the U.S. It would see gross output from China’s AI industry increase 10-fold within the next three years, to 150 billion renminbi ($24 billion), and to 1 trillion renminbi by 2030.
Lu said that vision plays a part in drafting regulation. He described the stringency of China’s current data-privacy rules as falling deliberately somewhere between the U.S. and the EU. That’s partly because of competitive concerns over access to big data.
The U.S. government’s goal is to maintain its global lead in AI development. The EU, which has no big data-collecting corporations on the scale of Facebook, Amazon.com Inc., or Chinese giant Tencent Holdings Ltd., has said it wants to lead in the ethical use of data. It too, though, is beginning to worry about getting left behind on AI.
A study by Jeffrey Ding for Oxford University’s Future of Humanity Institute published this month found that China currently trails the U.S.
