|Issue:||Asia-Pacific II 2014|
|Topic:||Why are Asian Internet startups lagging behind (and what we can do about it)?|
|Title:||Head of Government Relations & Associate General Counsel|
Steven Liew is the Associate General Counsel & Chief Government Relations Officer, eBay Inc. Asia Pacific Region
Prior to eBay, Steven was responsible for the setting up and management of Nokia Corporation’s Asia Pacific Brand Protection Department and Louis Vuitton Malletier’s Greater China Anti-Counterfeiting Department. In both in-house counsel roles, Steven developed and executed successful IPR policies and enforcement programs.
Steven started his legal career as a solicitor at Baker & McKenzie in Hong Kong. In that role, he serviced the IPR needs of multinational brand owners in Asia. His work included counseling clients on IPR issues, enforcing his clients’ IPR and conducting extensive government lobbying on IPR policy in the region.
Midway through his legal career, Steven spent three year living his childhood dream of becoming a police officer. After leaving the Singapore Police Force, Steven continued to serve as a reserve police officer holding the rank of Deputy Superintendant of Police. His last appointment before his retirement in 2013 was the reserve Commanding Officer of Marina Bay Neighborhood Police Center.
There are particular challenges faced by Asian Internet startups, including internal and external factors on the aspirations of the companies’ founders and CEOs, which essentially require the urgent reduction in regulatory burdens. There should be a concerted effort by all Asian governments to remove unnecessary regulations that do nothing but add to the operating costs of all companies.
In 2013, the Asia Internet Coalition (AIC) collaborated with the Economist Intelligence Unit (EIU) to find out what key factors impact the general state of the Internet industry in Asia (http://is.gd/aic_gtg_EIU ).
The report examines the business environment faced by Internet companies in Asia, and the impact of internal and external factors on the aspirations of the companies’ founders and CEOs. It is based on interviews with senior executives from more than 30 Internet companies’ founders, senior executives and investors around the region. In the survey, we asked our respondents questions relating to their business models, financial architectures, the talent market and government support – including the regulatory and legal environments. The key findings of the research are as follows:
1. There is global demand for Asian content and platforms, but very few Asian Internet companies are thinking globally.
2. Asian Internet companies typically focus on home markets, either because their markets are huge or because they feel they need to build scale before venturing abroad.
3. Monetization is an uphill battle for many Asian Internet companies.
4. Online payment channels are fragmented and under-developed, hindering business.
5. Internet regulation is on the rise, and many governments are focusing more on control than enablement, failing to understand the negative impact on the sector.
6. Asia’s market for technology talent is being fought over globally and is getting fiercer by the day.
These findings have led us to conclude that more can be done on the regulatory front to grow the entire Asia Internet industry, rather than to hold it back. There should be a concerted effort by all Asian governments to remove unnecessary regulations that do nothing but add to the operating costs of all companies. We also think that if Asian governments are serious about their policy aim to attract foreign or nurture their own entrepreneurs to start their Internet companies in Asia rather than in the Silicon Valley, the governments ought to be thinking about deregulations rather than more regulations.
We are of the view that Asian governments ought to do more to reduce the regulatory burdens on Internet companies in Asia as a lot of our survey respondents are expanding a lot of their time and resources navigating regulatory mine fields rather than trying to coming up with the next killer app.
As a coalition, we have been engaging actively with governments across the region such as Vietnam, Philippines, Malaysia, Thailand, Japan, Australia, Hong Kong, India, South Korea, Indonesia and Singapore to help them understand the extent of the harm they are causing by passing laws which hold back new technologies and new business models.
In 2014, the AIC will continue to engage with Asian governments to reduce unnecessary regulatory burdens confronting the entire Internet industry. Specifically, we will be advocating for more open policy and regulatory environments in these areas:
1. Localization of Data
Post-NSA/Snowden, this risk has risen significantly. Brazil, Russia and China are at the forefront of issuing and enforcing laws which require Internet companies to localize their operations, build data centers within these countries’ borders and subject themselves to the laws of the countries in which they operate. Increasingly, we are also seeing governments in Southeast Asia, Korea, Taiwan and India promulgating and enforcing similar requirements. This is now a global issue that has gained significant traction with Asia Pacific. The AIC does not agree that keeping data within national borders is a good way to protect the privacy of Internet users. Instead, such laws will drive up the costs of data access for both consumers and developers who want to access data however, wherever and whenever they want data.
2. Content and Usage Regulations
This is a broad topic which includes public policies relating to online safety, protection of vulnerable communities like children, cyber-bullying, intellectual property protection, consumer protection, privacy, financial services regulations, national security and so on. Governments in the region have not just issued and enforced laws against the creators or distributors of objectionable contents, products and services, but have also tried to extend liabilities to intermediaries such as Internet platforms which may have hosted or listed these contents or items.
The AIC has made some headway in working with governments, NGOs, the communities at large and academics to develop policies and codes of conduct which taken into the unique challenges of the openness and instantaneous of Internet communications and services. The AIC will continue to engage all relevant stakeholders in the development of laws and policies which will not stifle the growth of the Internet industry.
3. Bilateral and Multilateral Trade Agreements
There are several pieces of trade agreements which are currently under negotiation. In almost all of the agreements, there are chapters which have significance to the Internet industry – ranging from cross-border data flow, eCommerce, electronic payments, taxation of cross-border products and services, etc. The AIC has been very engaged with the Trans-Pacific Partnership negotiations. The AIC will continue to stay engaged and provide timely inputs to the negotiators. Our goal is to develop and roll-out appropriate responses which can address any chapters in those agreements which the AIC may find problematic.
It is also the AIC’s long-term mission to work with Asian Internet start-ups to help educate and support their discussions with governments as they grow their businesses. There are many activities and initiatives that are undertaken by the AIC to advance our policy agenda. It is our hope that Asian Internet companies, whether start-ups or existing players, will join us in some of the activities we have planned for 2014.
It is not easy to persuade governments to make laws and policies which will help our businesses. There are many competing interests which a good government need to balance when formulating and implementing policies. Over the last 4 years, the AIC has conducted many different initiatives to engage governments across the region and also globally to help the Coalition’s member-companies. We believe that the most straight-forward and effective way to engage law-makers or regulators is to have a face-to-face meeting with them. It could be done during a public forum where there are multiple stakeholders present all competing for the attention of the decision maker. It could be an informal meet-and-greet on the sideline of a public conference. Or it could be at a formal congressional committee hearing. Finally, the engagement can be in the form of written submissions.
What is common in all these different ways of direct engagement is the amount of preparatory work needed to “tee-up” the discussion. The policy issue must be thoroughly researched and the arguments must be well-written. The AIC has over the last 4 years built up the capabilities and credibility to be a persuasive group which can open doors and have the industry’s collective voices heard.
The Internet industry is inherently about disruptive changes. The disruption can be to existing business models or technologies or both. Disruptions will always lead to incumbent players being forced to step up their game to compete. If they don’t change, they will be forced out of business. Governments may sometimes be swayed by incumbent interests to pass laws which protect the incumbents and preserve the status quo. The AIC does not think that is a long-term viable strategy for any government that wishes to promote innovation and entrepreneurship in their country.
We believe, working hand-in-hand, we can groom more local technology talents, facilitate the free flow of goods and money across national borders and make it easier for Internet start-ups to monetize.
We are confident that we will soon see more Asian Internet giants offering exciting and interesting services globally.
• Preserving the open interconnected nature of the public internet;
• Public policies that encourage the adoption and unhindered development of internet enabled communications and e-commerce;
• Promoting the full potential of the internet to benefit society, the economy and citizens; and
• Public policies that encourage individual rights and freedom of communication and access to legitimate internet content, services and applications.