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E-Business

Spontaneous Deregulation tests Regulatory Gaps on Digital Platforms

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By Austin Okere

There is a perfect storm brewing on Twitter between the President of the United States of America, Donald J. Trump and Twitter Founder, Jack Dorsey.

“The Trump-Twitter fight ropes in the rest of Silicon Valley” was the screaming headline on Politico.com on Sunday, May 30, 2020.

President Donald Trump tweeted earlier this week 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. The order involves Section 230 , part of a 1996 law that gives websites (including companies like Twitter and Facebook) the ability to moderate content on their sites without worrying about First Amendment violations.

Legal experts have said the move is possibly illegal and difficult to enforce. Facebook, meanwhile, has tried to stay out of the clash, with CEO Mark Zuckerberg weighing to say he has a much different view from Twitter on how Social Media Platforms should handle controversial political speech. Companies like Facebook and Twitter, Zuckerberg said, should not act as “the arbiter of truth.”

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 four years ago in June 2016, and it still captures the essence of this feud. What are your views on this fractious issue?

I facilitated a seminar for the Lagos Judiciary at the Lagos Business School in May 2016, with 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.

The Regulatory Gaps

Justice Opeyemi Oke, representing the Chief Judge of Lagos State receiving the certificate of Participation

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 have 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 crowd sourcing and giving rise to the sharing economy.

Believing in the efficacy of their utility model and its appeal to a 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.

Two major areas in which these digital czars have riled the establishment are in transportation and hospitality; the major ‘culprits’ being UBER and Airbnb. UBER, until recently a relatively unknown company out of Silicon Valley in California employs 160,000 drivers today and is adding an average of 20,000 drivers every month.

This transport services disrupter is now valued at $41b and operates in many major cities across the globe. Airbnb, a previously obscure company with similar roots and reach, has over 1.5m accommodation on her platform, and is now valued at $25b.

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 the 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.

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, and that emerging technologies like cognitive computing and other forms of machine learning can help narrow the gap between regulation and innovation.

Much as it may sound improbable, given its intrinsic consultative nature, I was not surprised when I came across an article on the World Economic Forum’s collaborative platform, announcing that a Law firm Baker & Hostetler has done just that!

Green shoots of technology in Law and Regulation

According to the article, Baker & Hostetler has announced that they are employing IBM’s AI Ross to handle their bankruptcy practice, which at the moment consists of nearly 50 lawyers.

Ross, “the world’s first artificially intelligent attorney” built on IBM’s cognitive computer Watson, was designed to read and understand language, postulate hypotheses when asked questions, research, and then generate responses (along with references and citations) to back up its conclusions. Ross also learns from experience, gaining speed and knowledge the more you interact with it.

“You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns a cited answer and topical readings from legislation, case law and secondary sources to get you up-to-speed quickly,” the website says. “In addition, ROSS monitors the law around the clock to notify you of new court decisions that can affect your case.”

Ross also minimizes the time it takes by narrowing down results from a thousand to only the most highly relevant answers, and presents the answers in a more casual, understandable language.

It also keeps up to date with developments in the legal system, specifically those that may affect your cases. According to CEO and co-founder Andrew Arruda, other firms have also signed licenses with Ross, and they will also be making announcements shortly.

This disruption, happening to the most unlikely profession, with a highly codified ethic is a clear manifestation that no industry is immune from disruption in the impending fourth industrial revolution.

Any industry that does not figure out how to be a part of it might as well write their obituaries. 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 a pent-up demand for the value and convenience that they provide. 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 than 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, the largest ICT Company on the Nigerian Stock Exchange & Entrepreneur in Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network, and on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship. Austin now runs the Ausso Leadership Academy focused on Business and Entrepreneurial Mentorship.


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E-Business

FG Launches Online Citizenship, Business Management Platform

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Ministry of Interior has announced the launch of a new Online Citizenship and Business Management Platform in line with the Renewed Hope Agenda of President Bola Tinubu.

FG Launches Online Citizenship, Business Management Platform

A statement signed by Dr Magdalene Ajani, permanent secretary, Ministry of Interior’s said the initiative forms a key part of its ongoing reforms aimed at promoting transparency, enhancing operational efficiency, and significantly improving service delivery to the public.

The new digital platform is designed to streamline the application and processing of citizenship and business-related services, ensuring faster turnaround times and improved user experience.

The platform allows users to apply for and manage business permits, ensuring that both local and foreign businesses operate legally in Nigeria.

It includes an Expatriate Quota System to manage work permits for foreign employees, helping companies hire skilled workers while complying with Nigeria’s immigration laws.

The Citizenship Administration and Management System provides a streamlined online process for applying, tracking, and managing Nigerian citizenship applications and related services.

Members of the public, corporate entities, and other stakeholders are expected to access the platform through the ministry’s website: https://interior.gov.ng , Direct Portal Access: https://candb.interior.gov.ng , or contact candb-support@interior.gov.ng for support and inquiries.

“The Ministry of Interior remains committed to establishing a more efficient, transparent, and secure framework for citizenship administration, while continuously enhancing service delivery through digital transformation,” the statement read in part.

 

 

 

 

 

 


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NITDA, CISCO Empower Youth with Digital Skills

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Fifty selected young unemployed Nigerians have completed a four-week intensive digital skills bootcamp under the Digital Literacy for All (DL4ALL) initiative, gaining practical training in Data Science, Artificial Intelligence (AI), and IT Essentials.

The programme, a collaborative effort between the National Information Technology Development Agency (NITDA) and Cisco, was hosted at NITDA’s South West Zonal Office in Victoria Island, Lagos.

Speaking on behalf of the Director General of NITDA, Kashifu Inuwa , the Head of the South West Zonal Office, Mrs. Chioma Okee-Agugwo, described the initiative as a vital component of Nigeria’s digital future. “This is not just a closing ceremony. It is the launchpad for new journeys—anchored in digital knowledge and powered by innovation,” she remarked.

According to the Director General, the initiative is rooted in NITDA’s Strategic Roadmap and Action Plan (SRAP 2.0) and reflects key focus areas including Digital Literacy, Emerging Technologies, and Youth Empowerment. It also aligns with President Bola Ahmed Tinubu’s Renewed Hope Agenda, which seeks to accelerate economic diversification through digitisation, innovation, and skills development.

Inuwa noted that the DL4ALL initiative forms part of Nigeria’s broader commitment to digital inclusion—ensuring that no one is left behind in the evolving digital economy. It also supports the ambitious goal of achieving 70% digital literacy by 2027, championed by the Honourable Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani. This national vision aims to equip millions of Nigerians with the skills required to thrive in a tech-driven world.

He further emphasized the importance of empowering youth with globally relevant skills. “They are no longer just consumers of technology. They are creators, innovators, and future employers,” he said.

The NITDA boss explained that throughout the bootcamp, participants engaged in hands-on learning experiences designed to build both technical proficiency and digital leadership capabilities.

“This is only the beginning,” he stated. “Through our zonal strategy, we are bringing innovation closer to local communities. This is how we democratise access and unlock Nigeria’s full digital potential.”

Inuwa expressed appreciation to Cisco for delivering high-impact training and called on stakeholders to continue investing in partnerships, people, and platforms that drive digital inclusion.

He asserted that the newly certified participants are now equipped to contribute meaningfully to Nigeria’s digital economy—armed with the skills to build solutions, secure infrastructure, and launch tech ventures that solve real-world problems.

At the end of the bootcamp, participants demonstrated their knowledge through impressive presentations that showcased the integration of skills acquired across Data Science, AI, and IT Essentials. Many spoke passionately about how the programme had expanded their technical competence and sparked a drive to create job opportunities—not only for themselves but also for others—as entrepreneurs and digital solution providers in their communities.


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Cyberattack Could Cost it Up to $400m – Coinbase

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Coinbase forecast a hit of between $180m and $400m from a cyberattack that breached account data of a “small subset” of its customers, the crypto exchange said in a regulatory filing on Thursday.

Cyberattack Could Cost it Up to $400m - Coinbase

The company received an anonymous email on May 11, claiming to have information about certain customer accounts as well as internal documents.

While some data — including names, addresses and emails — was stolen, the hackers did not get access to login credentials or passwords, Coinbase said.

Still, it will reimburse customers who were tricked into sending funds to the attackers.

Hackers had paid multiple contractors and employees working in support roles outside the US to collect information.

The company has fired those involved, it said.

Separately, the New York Times reported that the US Securities and Exchange Commission (SEC) was investigating whether the company had misstated its user numbers.

Coinbase shares extended losses after the report and were last down 6.5%.

“This is a hold-over investigation from the prior administration about a metric we stopped reporting two-and-a-half years ago, which was fully disclosed to the public,” said Paul Grewal, Coinbase’s chief legal officer.

“While we strongly believe this investigation should not continue, we remain committed to working with the SEC to bring this matter to a close.”

The SEC declined to comment.

The latest developments come days before the company is set to join the benchmark S&P 500 index, casting a shadow over what was expected to be a landmark moment for the crypto industry.

Security remains a challenge for the crypto industry despite its growing mainstream acceptance.

In February, Bybit disclosed a hack in which about $1.5bn worth of digital tokens were stolen — widely described the biggest crypto heist ever.

“The cyberattack may push the industry to adopt stricter employee vetting and introduce some reputational risks,” said Bo Pei, an analyst at US Tiger Securities.

Funds stolen by hacking crypto platforms amounted to $2.2bn in 2024, according to a report from Chainalysis, a US-based blockchain analysis firm.

“As our nascent industry grows rapidly, it draws the eye of bad actors, who are becoming increasingly sophisticated in the scope of their attacks,” said Nick Jones, founder of crypto firm Zumo.

Coinbase has refused to pay a ransom of $20m demanded by the attackers and is working with law enforcement agencies. Instead it has established a $20m reward for information on the hackers.

The company is also opening a new support hub in the US and taking other measures to prevent such cyberattacks, it said.

 

 

 


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