It has been quite an extraordinary year for big tech. Giants of the technology sector cannily leveraged the expanding economic opportunities thrown up by the pandemic. But now they find themselves in the crosshairs of regulatory authorities in Europe, America, the UK and China. Will 2020 come to be seen as an inflection point, when traffic lights are finally erected on the digital highway, along with speed bumps, mandatory lay-bys and enforced idling zones? Perhaps.
Around the world, unease about so-called “surveillance capitalism” is throwing up common themes on tech regulation. Mostly, these appear to demand accountability and docility from digital companies, which one senior European official recently described as having grown “too big to care”.
Accordingly, regulators have been busy the past month and it has been pretty brutal for tech companies. In mid-December, the European Commission published drafts of two ambitious pieces of legislation that would force big tech companies to take more responsibility for policing content and to refrain from anticompetitive practices. Transgressors would face heavy fines and the threat of being broken up. Amazon, for instance, might have to pay nearly $30 billion.
Britain followed suit on the same day with proposed laws to fine Facebook, Twitter and TikTok up to 10 per cent of global revenue if they fail to remove and limit the spread of illegal content.
The week before Europe and Britain took aim at digital companies, the US Federal Trade Commission accused Facebook of unfair competition and asked a federal court to break it up. And just days ago, prosecutors in 38 US states and territories accused Google of illegally arranging its search results to push out smaller rivals. This was also the month China levied fines on its own tech leaders Alibaba and Tencent over antitrust violations.
The whole point of regulating big tech is to reassert ownership of knowledge
All of this shades a picture – which began to be sketched years ago – of profound governmental mistrust and the alleged malpractice by tech giants. The warning shots were arguably fired back in October, when the US Congress published a lengthy report on how to update competition law and the US Department of Justice subsequently launched a lawsuit against Google over alleged abuses of its monopoly in search advertising. In theory then, Europe’s proposed Digital Services Act (DSA) and Digital Markets Act (DMA), are not starting a new debate. They are simply turning up the volume on a long-running one.
Quite so. Consider the reception afforded to Harvard Business School professor emeritus Shoshana Zuboff's 2019 book The Age of Surveillance Capitalism. It explained her premise that tech companies were unilaterally claiming private human experience as raw material for data, which would be computed and "packaged as prediction products". Ms Zuboff's formulation hit a nerve. At the very least, it chimed with the overwrought emotions of people who reported being "swamped with Google and Facebook ads for beds and bedding" right after they purchased a bedroom bundle – a mattress, bed base, pillows and sheets. In the past few years, the netizen has increasingly described the feeling of being hunted down by companies like Facebook and Google that provide free online services. It is not surprising then that governments are paying attention.
Europe’s plans will take years of debate before they become law. But as our networked world goes into its third decade and now that more than half the planet’s population is online, it is worth thinking about what the proposed digital rules might mean.
What do regulators and netizens want to achieve by corralling big tech? And what can tech companies do differently to stay in business while staying in touch with the zeitgeist?
These questions have particular resonance during the coronavirus crisis, when educational institutions have been relying on Google services to teach students during lockdown. In the circumstances, a closure – even partial – of the digital highway may not be a good idea.
By all accounts, that is not on the cards anyway. Instead, regulators across the US, UK and EU are agreed on the need for more digital champions – many small, nimble companies – not just a few big beasts in the tech jungle. Europe’s proposed DMA would ban tech companies from preferential treatment of their own products on their platforms and impose a greater obligation for large firms to share data with smaller companies and to ensure interoperability with their own software and hardware.
European Commission vice president Margrethe Vestager, who presides over the bloc's digital policies, has likened the new proposals to the "first-ever traffic light that brought order in the (online) streets". That is an evocative image. In practice, the new order would mean new community habits and new ways of sharing. Search engines such as Google would need to provide their ranking, query, click and view data to rival search engines such as Qwant, a French firm. In a sense, tech regulation would land squarely along the financial sector, in order to curb abusive monopoly behaviour.
In Dave Eggers' 2013 novel The Circle, a giant eponymous California tech company bears a "do no evil" philosophy somewhat like Google in its early phase. But the fictional company's overall creed according to one of Egger's characters is "infocommunism", the belief that no one is entitled to privacy, "secrets are lies (and) and sharing is caring". This subverts the idea of a person's right to control dissemination of their data.
The whole point of regulating big tech is to reassert ownership of knowledge and data and limit licenses for its use.
There is much to be said for the effort.
Rashmee Roshan Lall is a columnist for The National
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MATCH INFO
Uefa Champions League, Group C
Liverpool v Red Star Belgrade
Anfield, Liverpool
Wednesday, 11pm (UAE)
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Directed by Sam Mendes
Starring Dean-Charles Chapman, George MacKay, Daniel Mays
4.5/5
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
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'Nightmare Alley'
Director:Guillermo del Toro
Stars:Bradley Cooper, Cate Blanchett, Rooney Mara
Rating: 3/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
