Tech investors read this: you can speculate on digital risks for 2020

digital nomads rights of data

At a time of regulatory and geopolitical uncertainty, investors should look for tech companies that understand how human rights standards build trust.

Several companies have made notable improvements since the first RDR Corporate Accountability Index started evaluating many of the world’s most important internet, mobile, and telecommunications companies back in 2015.

Most of the industry, however, has focused on legal compliance and lobbying to shape further regulation. Companies otherwise have done little to be proactive in response to widespread public concerns about their social impact.

They continue to expose users and investors to risk by failing to disclose adequately what happens to users’ data or how they can control its collection and use.

Companies do not disclose enough information about who has the power to amplify online messages and under what circumstances, or about how online speech and access to or about information are enabled, restricted, and shaped through digital platforms, services, and devices.

The RDR Index offers investors a clear framework to evaluate how companies can prevent or mitigate risks to users’ privacy, expression, and information rights, in alignment with the UN Guiding Principles for Business and Human Rights.

Look for companies with policies, practices, and governance that go above and beyond legal compliance box-checking. Despite significant shortcomings in policy, practice, and disclosure, some progress has been made. The highest-ranked tech companies in the 2019 RDR Index disclosed policies and practices that exceeded baseline privacy and internet-related laws and regulations in their relevant jurisdictions, thereby meeting higher human rights standards in at least some areas.

One sign that regulatory drivers can reshape behavior came with the General Data Protection Regulation (GDPR). After the regulation came into force in May 2018, companies improved, albeit unevenly. The quality of privacy and security policies, practices, and disclosures by EU-based telcos varied widely in the 2019 RDR Index.

For example, Deutsche Telekom (the highest ranking European telco) out-scored Orange (the lowest-ranking European telco) by nearly double in the privacy category.

CEOs and boards need to take responsibility for the human rights risks and negative social impacts associated with their business models. The 2019 RDR Index evaluated whether companies carry out comprehensive due diligence addressing the full range of risks to internet users and affected communities associated with their business operations.

No companies disclosed any evidence that they conduct due diligence or human rights impact assessments in connection with targeted advertising business models. This performance gap is striking at a time when widespread media reports backed by academic research show that personal data shared by companies with advertisers can be abused to target specific groups of people with discriminatory practices or with blatant disinformation that can incite violence or sway political outcomes.

Investors need to focus on governance issues that affect how dominant social media platforms’ content rules are formulated and enforced as well as how algorithms and artificial intelligence are used to shape content or profile users.

Applying Mountain Thinking to Artificial Intelligence

These issues matter because Facebook, Twitter, and Alphabet’s Google (parent of YouTube) have not offered any evidence of having conducted human rights impact assessments on their rules, content policing processes, or their use of algorithms, machine learning, or other artificial intelligence tools.

Ranking Digital Rights (RDR), an independent research initiative housed at the Open Technology Institute at New America, is releasing its Winter 2020 Investor Update (links to PDF) this morning. The concise, 12-page guide is an easy-to-use tool for institutional investors, policy advocates, journalists, and others to evaluate technology companies using a methodology based on rigorous, peer-reviewed human rights research. 

The Investor Update is packed with original analysis and concrete, actionable information that investors can use to get a clear picture of risks and opportunities undertaken by some of the world’s most powerful tech companies. It contains uses data from RDR’s 2019 Corporate Accountability Index, an annual ranking of the world’s most influential digital platforms and telecommunications companies. 

The Update is written by digital rights expert and RDR Director Rebecca MacKinnon and by veteran investment analyst Melissa Brown. It draws on research conducted by a team of tech policy and human rights experts led by RDR’s research director Amy Brouillette. 

Says MacKinnon, “Responsible and accountable corporate governance of digital rights risks is a growing investor concern. Ranking Digital Rights’ Investor Update cuts through the fog of opinion and outrage about tech company ethics and provides a clear framework for investors to evaluate human rights risks, and engage with companies about how such risks can be better anticipated and mitigated.”

More regulation on digital privacy and online content is coming – but are companies ready? Given the pace of technological change, anticipating regulatory risk means thinking beyond compliance with laws that have already been passed.

The Ranking Digital Rights Investor Update offers clear guidance to investors on how evaluate tech companies’ ability to be proactive and responsible about how their products and services are affecting society. 

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