E-Business
Spontaneous Deregulation Tests Regulatory Gaps on Digital Platforms
By Austin Okere
There is a perfect storm brewing between Regulators and Technology Platforms. Regulators should ordinarily be one of the most critical enablers of a society.
Austin Okere
They, however, tend to be either a source of support or a headwind against progress. The regulator should not constrict the pursuit of opportunity nor act in a manner to entrench protectionism.
While Nigeria has become one of the world’s fastest-growing technology markets, attracting investments of over $216m in the first quarter of 2021 alone, there is a palpable apprehension among technology start-ups, after a series of regulatory headwinds from different government bodies.
These include the Central bank of Nigeria’s ban on cryptocurrency trading and the Security and Exchanges Commission’s clampdown on technology platforms for purchasing shares in foreign companies outside the Commission’s regulatory purview and registration.
In August 2021, the Central Bank of Nigeria froze the bank accounts of six fintech platforms for 180 days, saying it was investigating “illegal foreign exchange trading”.
“The party’s over: China clamps down on its tech billionaires” was the screaming headline in the Guardian of August 21, 2021. In the article, Vincent Ni reported that Tencent had announced fresh restrictions on the number of time children can spend playing its online games shortly after state media labelled gaming “spiritual opium”.
The major news last October was Alibaba’s fintech spinoff Ant Group suspending its IPO shortly before it went public after high-flying founder Jack Ma expressed dissent against regulators.
In July, the country’s largest ride-hailing company, Didi, became a regulatory target less than 48 hours after it floated in New York. It was ordered to withdraw from app stores and banned from accepting new users pending a review of security risks and data management.
The news wiped $22bn from its market value. Individuals have also been affected.
Last July, Colin Huang, founder of e-commerce platform Pinduoduo, stepped down as chief executive. He later relinquished his chairmanship. In May, Zhang Yiming, boss of TikTok’s parent company, Bytedance, announced his resignation to focus on “reading and daydreaming”.
Further afield in America, the story is not much different. “The Trump-Twitter fight ropes in the rest of Silicon Valley” was the headline on Politico.com on Sunday, May 30, 2020. President Donald Trump tweeted about mail-in voting, alleging without evidence that the effort would lead to voter fraud.
For the first time, Twitter marked the tweet with a small notice that read “Get the facts about mail-in ballots,” which linked to facts-based reporting on the subject. Twitter’s fact-check led Trump to issue an executive order targeting social media companies.
In early June 2021, Nigerian President Muhammadu Buhari announced the indefinite suspension of Twitter after the platform deleted one of his tweets and temporarily suspended his account.
The relationship between platforms and regulation has been thorny right from the start and can at best, be described as a keg of gunpowder waiting to be triggered. Has the time come for the trigger to be pulled?
I wrote this article five years ago in June 2016, and it still captures the essence of this fractious relationship.
I facilitated a seminar for the Lagos Judiciary at the Lagos Business School in May 2016, with the theme Digital Economy and Legal Regulation. The aim of the program was to share insights on the emerging Digital Economy with their Lordships and draw attention to the imperative for regulatory evolution in the face of the pervasiveness of Online Platforms of the kind operated by technology giants such as Facebook, Google, Uber and Airbnb.
There is hardly an area of economic and social interaction these days that is left untouched by these Platforms in some shape or form.
Regulatory Gaps
To fill the regulatory gaps in the digital economy, these behemoths have resorted to what could be referred to as spontaneous deregulation. I first encountered this term in an article by Benjamin Edelman and Damien Geradin and has arisen as a result of digital disrupters ignoring laws and regulations that appear to preclude their business model, which is typically based on providing platforms for crowdsourcing and giving rise to the sharing economy.
Believing in the efficacy of their utility model and its appeal to pent-up global demand, these disrupters seem to see many rules and regulations as belonging to the past and impractical for today’s innovative clime. They therefore simply ignore them, opting for their own version of self-regulation, usually based on a mutual rating system between service providers and consumers.
It is this skirting of existing regulation that is referred to as spontaneous private deregulation.
These disrupters make the rules for themselves as they go along, because in fairness to them, as their platforms reshape markets, the scope of activity subject to regulation tends to decrease, and various forms of protection disappear.
These companies operate in interstitial areas of the law because they present new and fundamentally different issues that were not foreseen when the governing statutes and regulations were enacted.
The major areas in which these digital czars have riled the establishment are in transportation embodied by UBER, hospitality embodied by AirBnB and FINTECHs, with their foray into cryptocurrencies, particularly Bitcoin and Ethereum.
The need for ‘platform fairness’
Axelle Lemaire, French secretary of state in charge of all things digital, insists that France is open to platform operators, but consumers have to be protected. She is sponsoring a law to be passed by the French Parliament which will create the principle of ‘Platform Fairness’.
Karnataka state in India, where Uber piloted its India service two years ago has directed taxi aggregators such as Uber to stop operations in the state until they secure a licence from the government, triggering sharp reactions from the corporate world.
Getting a licence would mean no more surge pricing, complying with the maximum fares fixed by the government periodically and registering with local transport authorities.
The question is why has it taken the Karnataka government such a long time to wake up to regulatory gaps in her transport sector? And how many other cities are in this quagmire?
The U.S Supreme Court recently ended a decade-long battle over Google’s massive book-scanning project, declining to take up an appeal by authors who claimed the company violated copyright law ‘’on an epic scale’’.
The justices denied certiorari in Authors Guild v. Google, 15-849, leaving in place a ruling last year by the U.S. Court of Appeals for the Second Circuit that said Google’s project was permissible. The appeals court decision invoked the ‘’Fair Use’’ doctrine, which permits some ‘’socially beneficial’’ use of published works such as news reporting or research, that would otherwise constitute copyright infringement.
Airbnb has had its fair share of issues with one of her largest markets, New York. A major concern is a legal regime within which Airbnb operates; one that is marked by poorly drafted laws that fail to account for challenges presented by the sharing economy.
As explained by Airbnb cofounder Brian Chesky, “There were laws created for businesses, and there were laws for people. What the sharing economy did was create a third category: people as businesses,” to which the application of existing laws is often unclear.
These new business models raise complex questions that have not yet been addressed by either legislatures or courts.
Because the threat of enforcement actions can have a chilling effect on start-ups and their users, state and local government officials should consider how their actions may affect burgeoning businesses. Officials should encourage the sharing economy’s growth through collaborative efforts rather than seek to protect incumbent businesses.
Until more people think they can successfully start businesses and prosper, we will not have enough jobs in the economy
Regulation seems too slow in catching up
The slow pace of regulation evolution seems to strongly suggest that the legal profession itself is ripe for a technology revolution that will optimise the largely manual and laborious process of enacting laws and regulation in the face of the aggressive pace of digital innovation.
I recall the indignation of their Lordships when I cautioned that the learned profession could be more vulnerable than they think when it comes to disruption. Emerging technologies like cognitive computing and other forms of machine learning can help narrow the gap between regulation and innovation.
Green shoots of technology in Law and Regulation
My take expressed to their Lordships after the seminar was that the digital revolution is like a train whose drivers are the entrepreneur disrupters. The passengers are the global customers with pent-up demand for the value and convenience that Platforms provide.
Staying on the right side of the law in a digital world
Naysayers to this phenomenon can stand in front of the train and be crushed, stay on the platform and be left behind, or come on board for a ride into progressive partnerships. Regulators still have much to learn about how to deal with platforms. They have no choice but to get more involved and get the needed expertise. But will they? The jury is still out.
Austin Okere is the Founder of CWG Plc, & Entrepreneur in Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network.
By Reuben Kalu.
In the vast expanse of the digital realm, Google looms large, an omnipresent force shaping the way we navigate, search, and conduct business online.
From its humble beginnings as a search engine to its current status as a multifaceted tech behemoth, Google has entrenched itself deeply into the fabric of the internet.
Its influence is undeniable, its reach unparalleled, and its ubiquity seemingly inescapable. But can you truly run an online business without Google?
The answer, in today’s digital landscape, is a resounding no. You have no choice.
Google’s dominance extends across multiple facets of the online world, making it virtually impossible for businesses to thrive without engaging with its ecosystem.
From search engine optimization (SEO) to online advertising, email services to analytics, Google’s suite of products and services permeates every aspect of the online business landscape.
Attempting to operate without Google is akin to swimming against a relentless tide, fighting an uphill battle fraught with obstacles and limitations.
At the heart of Google’s influence lies its search engine, the gateway through which billions of internet users navigate the vast expanse of online content. .
Google’s search algorithms wield immense power, determining which websites rank prominently in search results and which languish in obscurity.
For businesses seeking to attract organic traffic and expand their online presence, optimizing for Google’s search algorithms is not merely advisable—it’s imperative.
But Google’s influence extends far beyond search. Consider Google Ads, the company’s advertising platform that enables businesses to reach targeted audiences through paid search, display, and video advertising.
With billions of searches conducted on Google each day, Google Ads provides unparalleled reach and visibility, allowing businesses to target potential customers with pinpoint accuracy.
Attempting to compete in the online advertising arena without leveraging Google Ads is akin to entering a battle unarmed—a futile endeavor destined for failure.
Moreover, Google’s suite of productivity tools, including Gmail, Google Drive, and Google Workspace, has become indispensable for businesses seeking to streamline their operations and enhance collaboration.
With seamless integration across devices and platforms, Google’s productivity tools offer unparalleled convenience and efficiency, empowering businesses to work smarter, not harder.
Attempting to eschew Google’s productivity suite in favor of alternative solutions is not only impractical but also unwise, depriving businesses of the tools they need to succeed in today’s fast-paced digital landscape.
Furthermore, Google Analytics stands as the gold standard for web analytics, providing businesses with invaluable insights into their online performance and audience behavior.
From tracking website traffic and user engagement to analyzing conversion metrics and customer demographics, Google Analytics offers a comprehensive toolkit for optimizing online marketing strategies and driving business growth.
Attempting to gauge online performance without leveraging Google Analytics is akin to flying blind, devoid of the critical data needed to make informed decisions and drive meaningful results.
But perhaps the most formidable aspect of Google’s influence lies in its role as a gatekeeper of information and access.
With billions of users relying on Google’s platforms and services each day, the company wields immense control over the flow of online traffic and the dissemination of information.
For businesses seeking to connect with customers and expand their reach, Google’s dominance presents both a tremendous opportunity and a formidable challenge.
Attempting to circumvent Google’s influence and establish an online presence independent of its ecosystem is a Herculean task, fraught with uncertainty and risk.
In essence, attempting to run an online business without engaging with Google is akin to swimming against a relentless tide, fighting an uphill battle fraught with obstacles and limitations.
While alternative platforms and solutions exist, none possess the ubiquity, reach, and influence of Google’s ecosystem.
To thrive in today’s digital landscape, businesses must embrace Google’s dominance and leverage its suite of products and services to their advantage. You have no choice.
In conclusion, Google’s pervasive influence permeates every aspect of the online business landscape, making it virtually impossible to escape its grasp.
From search engine optimization to online advertising, productivity tools to web analytics, Google’s ecosystem encompasses a vast array of products and services that have become indispensable for businesses seeking to succeed in the digital age.
While alternative solutions may exist, none possess the ubiquity, reach, and influence of Google’s ecosystem.
To thrive in today’s digital landscape, businesses must embrace Google’s dominance and leverage its suite of products and services to their advantage.
You have no choice.
E-Business
Hydrogen Hosts Catalyst Workshop, Highlights Resilient Business Models for Fintech Startups
As part of its mission to empower African businesses with tools needed to thrive, garner admiration, and foster global acclaim, leading payment solution company, Hydrogen Payment Services Company Limited (Hydrogen), recently partnered with the Co Creation Hub (CcHub), to host the latest edition of the Catalyst workshop in Lagos.
The discourse addressed the potential risks and opportunities for startups and saw experts advise participants on the need to develop resilient business models that would scale across different economic climes.
Moderated by Miracle Ezechi, Digital Marketing Manager, Hydrogen, the panel session addressed dominant issues about the theme: ‘Adapting Fintech Business Models to Economic Climes: Flexibility, Agility and Customer-centricity’.
Mr. Emeka Awagu, Chief Technology Officer, Hydrogen, who spoke as a panellist, addressed the issue of customer-centricity, which according to him, is key to Fintech growth.
He advised startups to listen to customer demands and understand their needs in order to develop the right solutions that will lead to long term market viability.
“Innovation is key for startup growth. However, understanding customers’ needs and change in behaviour will help any startup to innovate better.
“Startups must be flexible and agile to develop solutions with high interoperability and processing speed, and they must be ready to learn from startups that have failed,” Awagu said.
With an estimated 61.07 percent of startups failing, the participants stressed the need for prudence.
“Statistically, a staggering number of startups fail, often due to financial mismanagement. Hence, founders must prioritise understanding and maintaining a healthy the Cost-to-Earnings ratio.
“It is not just a number, but a pivotal indicator of a company’s financial health as well as being a key attractiveness determinant for investors,” Awagu added.
On his part, Ina Alogwu, the Group Director, Digital Transformation, ARM HOLDCO, who also spoke as a panellist at the session, stressed the need for startups to develop sustainable products and solutions that will help them remain competitive in an environment that is faced with harsh economic realities.
“Many startup businesses fail within their first five years, however upcoming startups should not be discouraged, rather develop a culture that will encourage them to understand the reasons for failure and learn from mistakes.
“Startups should not be too rigid with their solutions and should be ready to accept changes that will drive innovation,” Alogwu stated.
Hydrogen will be deepening its economic impact series with a webinar planned for Thursday, April 25, even as businesses across Africa continue to face an array of challenges, ranging from inflation and currency fluctuations to rising operating costs.
Themed ‘Navigating Economic Challenges: Strategies for Sustainable Growth,’ the webinar will delve into key areas critical for businesses to not only survive but thrive in the face of economic adversity. Register using this link – https://bit.ly/Hydrogenwebinar.
Esteemed panellists for this event include Taofik Odukoya, CEO, Vanguard Pharmacy, and Okechukwu Odimgbe, Chief Financial Officer, Hydrogen. The session will be moderated by Nnenna Sam-Obioha, Ecosystem Orchestrator, Hydrogen.
Dexude, a leading edtech platform with operations in Nigeria, has announced that it has been awarded the prestigious Business Finland TEMPO funding.
Charles Emembolu, founder of Dexude,
This significant funding injection marks a pivotal moment in Dexude’s journey towards transforming education through its AI-powered, live-first, expert-led, and community-driven platform.
The Business Finland TEMPO funding is specifically designed to support startups and SMEs aiming for international growth by building their expertise and solutions into international success stories in innovative ways.
Dexude’s commitment to innovation, coupled with its vision to enable a billion learners worldwide, aligns perfectly with the objectives of the TEMPO funding.
Commenting on this milestone achievement, Charles Emembolu, founder of Dexude, remarked, “We are incredibly honored and excited to receive the Business Finland TEMPO funding. This funding is not only a validation of Dexude’s mission to reinvent education but also a testament to the hard work and dedication of our team. With this support, we are poised to accelerate our efforts in democratizing access to quality education and empowering learners across Nigeria and beyond.”
L-r; Kelvin Chikezie, co-founder of Dexude; Kashifu Inuwa Abdullahi, Director-General/CEO of the National Information Technology Development Agency (NITDA); and Charles Emembolu, founder of Dexude
Kelvin Chikezie, co-founder of Dexude, added, “Securing the Business Finland TEMPO funding is a significant milestone for Dexude. It underscores our commitment to leveraging technology and innovation to revolutionize the way people learn and grow. We are grateful to Business Finland for believing in our vision, and we are excited to embark on this next chapter of Dexude’s journey.”
Dexude is on a mission to redefine education by providing learners with access to influential experts and thought leaders, live interactions, and a vibrant community-driven learning experience.
Through its platform, Dexude aims to break down barriers to learning and empower individuals to pursue their passions and unlock their full potential.
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