Artificial Intelligence, FinTech and competition policy - new standards, new goals

Continuing from my previous post on the DEPA module based trade agreement between Chile, New Zealand and Singapore, I tried to explore what is the additionality that this arrangement provides.

In Module 8, titled Emerging Trends and Technologies, of the DEPA, FinTech, Artificial Intelligence (AI), impact of digital economy on government procurement and competition policy for the digital economy are the new areas that are touched upon. They are mostly "soft law" in nature with co-operation and capacity building as the focus.

Why a specific provision on Fintech one would wonder? The growing importance of the industry and the extent of impact it could have on the economy, is why it thrusts its way into a free trade agreement. The FinTech provisions engage private business to co-operate and explore possibilities of collaboration. 

The provisions on AI encourage the parties to aim for an " adoption of an ethical and governance frameworks that support the trusted, safe and responsible use of AI technologies (AI Governance Frameworks)." Is this the beginning of international norm setting for AI? Will national frameworks converge on this count? 

Singapore already has a national governance framework for AI as discussed in this WEF post. This report from McKinsey outlines the potential of AI to the growth of the world economy. The EU guidelines on a trustworthy AI is found here. Are we going to see a multilateralisation on these guidelines and what impact would they have on competitive advantages for firms in the AI sector across geographies.

And finally Module 8 has the elephant in the room - competition policy for the digital economy. A major tussle is on between competition regulators across the globe and large technology companies. How anti-competitive are their policies? Article 8.4 states, inter alia,

1. Recognising that the Parties can benefit by sharing their experiences in enforcing competition law and in developing and implementing competition policies to address the challenges that arise from the digital economy, the Parties shall consider undertaking mutually agreed technical cooperation activities, including: 

(a) exchanging information and experiences on development of competition policies in the digital markets; 

(b) sharing best practices on promotion of competition in digital markets; and 

(c) providing advice or training, including through the exchange of officials, to assist a Party to build necessary capacities to strengthen competition policy development and competition law enforcement in the digital markets.

Though subject to dispute settlement, these are best endeavour, co-operation based provisions to enhance understanding. An incremental approach to more hard law approaches later in the day. Could there be a universal competition law framework for the digital economy in the future?

The DEPA does explore new frontiers, in an incremental way. How much of co-operation the DEPA spurs and how rules will emerge from that interface is what needs ro be watched in the coming years.