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31. It’s time for the European Union to rethink personal social networking

Author:
Fiona Scott Morton
Publication Date:
12-2024
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The European Union’s Digital Markets Act (DMA) includes interoperability requirements for messaging services but not for personal social networking platforms. These gatekeeper platforms have seen little increase in competition under the DMA. Interoperability requirements – meaning different services should be able to communicate with one another – should be expanded to cover social networks, enabling entry by overcoming the single-homing tendencies of strong network effects. Interoperability could be vertical and horizontal. Vertical interoperability would require incumbent platforms to maintain network infrastructure while allowing third-party curators to create their own networks ‘on top’ of the platform. Horizontal interoperability would enable social networks that run their own infrastructure to connect to existing networks through standardised application programming interfaces (APIs). Both designs entail some shared requirements, including APIs that enable basic content sharing, systems for verifying the identities of users communicating across networks and ways of ensuring safety and security. Government systems for licensing entrants and credentialing users would provide baseline support for interoperability. While vertical interoperability lowers barriers to entry by using the dominant firm’s platform as the basis for interoperability, it gives that firm greater leeway to discriminate against rivals running on the platform. It also creates long-term questions about the price of access to the network, since its costs are borne by the gatekeeper. Horizontal interoperability requires each firm to maintain its own platform independently, but comes with the increased risk that the gatekeeper will discriminate against external traffic. Increasing interoperability – either through horizontal or vertical methods – would encourage competition on content algorithms, customisation, locality and monetisation. By expanding the scope of interoperability requirements, the DMA could significantly reduce the market power of gatekeepers, provide users with more choice and create opportunities for new social networks – and models for social networking – to emerge. As messaging and social networking platforms continue to converge, extending interoperability standards will best support the continued development of competition in these sectors.
Topic:
European Union, Digital Economy, Social Media, Microeconomics, and Digital Markets Act (DMA)
Political Geography:
Europe

32. Buffer or Bottleneck? Employment Exposure to Generative AI and the Digital Divide in Latin America

Author:
Paweł Gmyrek, Hernan Winkler, and Santiago Garganta
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Empirical evidence on the potential impacts of generative artificial intelligence (GenAI) is mostly focused on high-income countries. In contrast, little is known about the role of this technology on the future economic pathways of developing economies. This paper contributes to fill this gap by estimating the exposure of the Latin American labor market to GenAI. It provides detailed statistics of GenAI exposure between and within countries by leveraging a rich set of harmonized household and labor force surveys. To account for the slower pace of technology adoption in developing economies, it adjusts the measures of exposure to GenAI by using the likelihood of accessing digital technologies at work. This is then used to assess the extent to which the digital divide across and within countries will be a barrier to maximize the productivity gains among occupations that could otherwise be augmented by GenAI tools. The findings show that certain characteristics are consistently correlated with higher exposure. Specifically, urban-based jobs that require higher education, are situated in the formal sector, and are held by individuals with higher incomes are more likely to come into interaction with this technology. Moreover, there is a pronounced tilt toward younger workers facing greater exposure, including the risk of job automation, particularly in the finance, insurance, and public administration sectors. When adjusting for access to digital technologies, the findings show that the digital divide is a major barrier to realizing the positive effects of GenAI on jobs in the region. In particular, nearly half of the positions that could potentially benefit from augmentation are hampered by lack of use of digital technologies. This negative effect of the digital divide is more pronounced in poorer countries.
Topic:
Employment, Digital Economy, Artificial Intelligence, and Labor Market
Political Geography:
Latin America