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Platform Regulation and AI in China

Both academic and policy-oriented research about online platform technologies and their regulation in North America and Europe is active and widespread. Especially many researchers from industrial organization (within economics), competition law (within jurisprudence), and information systems and computer science are active here. Given the high economic significance of the area, the European Commission established the independent expert group to the EU Observatory on the Online Platform Economy a few years ago, which should advise the Commission on the main trends of the online platform economy and analyze potentially harmful practices there (see here and links from there). Now, after several years of work and scrutiny, the first reports are ready and about to being published.

One of them is a report with a novel topic that looks in exploratory fashion beyond the realm of the Western digital sphere and beyond how the internet works in democratic countries: “Regulation of Digital Platforms and the State’s Use of Platform Technologies in China” (co-authored with Inge Graef and Doh-Shin Jeon). Platform technologies (Artificial Intelligence and Data Analytics) are not only used in the West but also in autocratic countries. While the major players in the West are privately-owned big tech firms, in autocratic countries the government assumes a much more active role. China is the most advanced of these countries. This report takes stock of China’s current state of digital platform markets and regulation of platform technologies, including a series of recent governmental interventions and a description of the Chinese Central Bank Digital Currency. It also offers a view on the current use of platform technologies by the Chinese government and the Chinese Communist Party (CCP), including Social Credit Systems and the surveillance state. Based on these insights, we identify key challenges for EU policy makers and formulate crucial questions for future (more quantitative) research.

As both the Chinese government and Chinese businesses are fully embracing digital technologies and, in particular, AI, this piece is set to be only a first (and qualitative) step. A scarce literature is being created. More knowledge is dearly needed if we want to better understand (and counter, where necessary) the Chinese approach to platform technologies.