The World's Four Internets
It has been clear for years that the US and China live in different digital spaces. My phone has no less than eight full pages of apps, my browser hundreds of bookmarks, and I have at least than a dozen different methods to send and/or receive payments. China famously has WeChat, where you can do everything from pay bills to buy movie tickets to ordering a cab to share a social photo all in one place. When I want any of my payment apps to communicate with my social apps, I have to do a two-way approval process typically involving one (if not more) two-factor authentication side-steps in between.
But while that permissions-based structure domestically might be a bit tedious, the flipside of the Chinese model is rampant government surveillance. A one-company-fits-all model is far easier to regulate to the point of near-management than a more diffuse model that require more generally-applicable legal standards and frameworks. Chinese government officials routinely censor reams of content including down to the keyboard and text message level, use intimate messages as the basis for litigation and immediate arrest, shut down & start sock puppet organizations frequently, all without an ounce of disclosure to the 1.1 Billion monthly active users.
Whatever you think of WeChat, it's clear that we outside the Great Firewall have different experiences online. Chinese users rely often on number slang to convey a point faster than typing in Chinese characters, while helpfully avoiding government censorship of certain terms. There’s a more widely-understood not-immediately-apparent meanings of certain emojis that can spread on a whim, a phenomenon that Gen Z has only recently introduced to the American online discourse.
The technical line in the sand may have been around privacy, native interoperability, and monopoly control but it has led to greatly different experiences based on those early decisions. Lately, choices by the European Union have started to draw early lines around their continent as well that in my view are leading to a third kind of internet distinctively anti-Chinese & anti-American. It will be simpler, with higher barriers to entry, and therefore likely less of a part of day-to-day life. Rather than deciding whether a distributed versus singular approach makes more sense for their respective economy, Europe has decided that they would simply rather not have a modern tech economy at all.
Whether you agree or disagree with the reams of legal paperwork flowing out of the EU, European regulators have made decisions that will certainly lead to a different experience for users. This week’s decisions on Meta’s Pay-or-Okay model and last weeks on Apple’s similarly payments-based DMA compliance model essentially tell these companies that they are charging too much margin for their products and must accept lower revenues in Europe. Meta’s case started when the EU introduced new consent-based privacy laws last year that led to European Facebook users getting the option to use Facebook for free while consenting for their data to be used for targeted advertising within Meta’s ecosystem, or not have their data be used but pay a subscription fee for the service. But on Monday this week the EU said no, that is actually also illegal, because “For there to be a free choice for the user and a valid choice for the user […] the consumer needs to be in a position to choose an alternative version of the service which relies on non–personalisation of the ads.” I.E. Facebook is too successful building a business through personalized ads, so they must now not have personalized ads nor subscription revenue. They must get revenue…a secret third way? I have no idea.
Apple’s case is similar – yes Apple charging 30% for in-app revenue across the board was ludicrously high. Yes there needs to be a workaround model, but rather than doing that the EU regulators used the opportunity to define a whole set of firms as ‘gatekeepers’ to regulate differently. Gatekeepers essentially are defined as the big tech companies, who are now required to offer the following to all their users:
Choice screens — one for picking a default browser on Android devices and one for picking a default search engine in the cross-platform Chrome browser — coming to the European Economic Area (EEA) after March 6th.
More links to competing sites when searching Google for things like flights and hotels, including a dedicated space for comparison sites. Google will also remove some of its own widgets, like the Google Flights box.
An opt-out for sharing some data across YouTube, Search, ad services, Google Play, Chrome, Google Shopping, and Google Maps. Users’ choices will take effect on March 6th.
A new Data Portability API for developers to build on its Google Takeout service, which lets users move data out of Google services.
The option for Play Store app developers to direct users in the EEA outside their apps to promote alternate payment offers, part of a larger overhaul of Android payments in Europe.
Each decision can easily be defended on its face, but the actual user experience will essentially become a wider set of these checkboxes before using any common digital service, but now with choices for browser, search, video streaming, etc options before using a product:
The result of these decisions is immediate & obvious – new features simply will not be shipped to Europe.
Europe is 7% of Apple's revenue, 23% of Metas, and 30% of Google’s (inclusive of wider EMEA). Apple is already heavily reducing its feature set in the EU. Meta and Google are similarly not bringing any of their AI developments across the pond. At a certain point, which we are already well past, the calculus of bringing new products and services to market didn’t make sense when weighed against the (falling) revenue coming out of the EU.
The irony is that the pay-or-okay model of user privacy choice that Facebook was attempting to use has already been established by German publishers like Bild or Der Spiegel, and retailers like Tesco are providing advertising capability against their users backed by combining in-store and online purchase data. The designation of big tech companies as ‘gatekeepers’ essentially says that for these specific companies, there are different rules. They simply must accept less revenue through less personalized advertising and therefore less efficacy, and they also (uniquely) cannot connect data across platforms in a myriad of ways, and must constantly provide user choice to their direct competitors.
Given even a few years of development in this age of rapid AI and accompanying software explosion that we’re in, it won’t take long until these currently-superficial differences become real day-to-day differences in how the web is used in society. It’s a theory of anti-big-tech, not for any clear economic benefit but simply as a theory for its own sake. Push on the DMA officials and they will say these rules are for user privacy and user protection, but it’s not like there were riots in the streets demanding Facebook stop personalized advertising on Instagram, or huge destruction of local economies due to Facebook's presence. On the contrary, the rise of Instagram and Facebook have provided huge boons to a range of EU tourism-based economies, and the free service has been shown over and over to contribute at minimum hundreds of dollars per person, per month to the half a billion of the EU’s citizens.
Deciding that the leading tech companies are worth greatly restricting and must be a smaller part of everyday life is a huge economic decision, especially at this moment in digital history. On a shorter time horizon than we think, Europe will create a siloed internet on the continent that is far less a part of day-to-day life than either the US or Chinese model. It will be the first modern kneecapping in history done to a growth industry for totally non-economic (or safety) reasons. Even the push to end child labor happened only after developments in schooling, demography, household income and technology. The DMA and similar regulations in years past have created no clear economic benefits for users of the internet in Europe, but has made the EU the world's laggard in tech innovation and associated revenue.
The future world of the EU looks like a more restricted version of today, where digital services are there to post pictures and text friends, but any deeper connection into life is unconscionable. Life is out there, and automation cheapens the beauty. Self driving cars? AI automation? These things replace workers doing real blue collar building & service professions. The internet? Glad it can give me directions.
These three worlds can be seen from a usability perspective as Europe on the one end and China on the other, with the US somewhere in the middle, or through a privacy/choice axis in the same way. The paragraph above might sound great to you, and at some point in my life when I retire it sounds pretty good to me too. But it is quietly one of the biggest economic decisions Europe has made in decades.
The fourth internet is the mobile-first, function-first internet of Southeast Asia, India, and parts of Africa. The internet that brought global connectivity through a smartphone and maybe a family tablet, taking people with zero digital connectivity to near parity with both the West and China almost overnight – yet with no local control over the device nor its content. In the last decade as local firms have exploded, that has been changing. The fourth internet is being modernized faster than the other three, changing almost most every day, and deserves its own post next week.