A ‘Class’ Apart: The Problematic Case of Social Media in the WTO
With more than 2 billion worldwide downloads,[[i]] TikTok has been one of China’s leading successes in the digital sphere. But of late, as growing concerns mount over China’s handling of personal data collected by applications, it has found itself in hot water. When India decided to enforce a ban on 59 Chinese applications in June 2020, TikTok was prominently included in the list.[[ii]] This was followed in quick succession by the USA, Australia, the EU and Japan[[iii]] calling for its ouster amidst privacy concerns. In light of the potential bans on the app, China may well consider filing a petition at the WTO.[[iv]] This might be a troublesome situation, not least because Social Media Services find no mention in the General Agreement on Trade in Services (GATS) Classification at all. This lack of clarity regarding the classification of Social Media is something that needs to be tackled on an urgent footing.
What is Classification?
Services under the GATS are classified through the ‘Services Sectoral Classification List’ (W/120),[[v]] which works in tandem with the UN Provisional Central Product Classification,[[vi]] with the former providing a comprehensive list of service sectors and sub-sectors and the latter, providing relevant numbers assigned by the UN for classifying trade statistics. These form the basis for a member’s Schedule of Specific Commitments, which outline the market access and national treatment obligations a country has undertaken in each sector. The list of sectors specified is exhaustive in nature, and more importantly, the sectors laid out in a Schedule are mutually exclusive.[[vii]] A service can thus, only fall under a single sector, and not two at the same time.
In order to accommodate for e-commerce and internet technology, the principle of technological neutrality[[viii]] was promulgated, which focuses on the ‘nature’ of the services to classify them, not the technology involved. The Work Programme on Electronic Commerce has clarified that, ‘the electronic delivery of services falls within the scope of the GATS, since the Agreement applies to all services regardless of the means by which they are delivered’.[[ix]] If the nature of services is the same, the commitment made in a Schedule is valid even for those means of delivery that were not technologically foreseeable at the time they were made. [[x]] A pertinent distinction between ‘new services’ and ‘new means of delivery’ is made here. A Member has no commitments for services that are not listed in its schedule.[[xi]] New services would thus be exempt, while new means of delivery would be subject to the Schedule’s commitments.
Classification of TikTok under Pre-existing Sectors
Social media did not exist during the Uruguay Round negotiations and is thus not listed in any classification regimes. Since they are not explicitly covered by the Service Sectoral Classification List, they can be classified either as a new means of delivery of an already existing service or as a completely new service. While determining which pre-existing sector is most accurate to classify social media platforms such as TikTok, plausible classifications include i) Telecommunications Sector[[xii]] (CPC 7523, which includes Data and message transmission services) and ii) Computer and related services[[xiii]] ( CPC 844), specifically Data base services. Each classification option covers within its scope, certain intrinsic characteristics of the application. However, there are important overlaps between computer services and telecommunication services, which raise serious classification issues.[[xiv]]
TikTok is marketed as a video sharing platform that allows users to post short videos that are subsequently enjoyed by viewers.[[xv]] Based on the popularity of a user’s content, they begin to amass a following within the app. Users collaborate with each other and react to each other’s videos. Additionally, TikTok has a function for direct messaging through which users can directly communicate with their friends. In short, it can be said that TikTok allows users to communicate and interact with a network of followers through videos and messages.[[xvi]] The essential function of social media is often understood as a form of computer mediated communication through which users create online communities to share information, ideas, personal messages, and other content.[[xvii]] Using this functional approach,[[xviii]] classification under Telecommunication Services seems appropriate.
However, there are certain aspects of TikTok that fall out of the scope of Telecommunication services and into the purview of Data base services. Apart from merely communication, it is the movement of data that is at the forefront of social media services. TikTok for instance, is centered on a ‘For You’ page. Content is generated by the app’s AI on this page by monitoring user activity such as the kind of videos the user searched, liked and interacted.[[xix]] The app collects user data, stores it in a database and utilizes this data to create a personalized page dependent on user preferences. Thus, it can be said that TikTok is founded on a structured database provided through a communication network.[[xx]] This puts it well within the scope of Data base services.
TikTok as a New Service
While Telecommunication services cover the communication and network creation aspects of social media and Data base services capture the movement and creation of databases, no single bracket nails down all the elements of a social media platform. Over time, social media has grown beyond being merely an electronic mode of communication to a ‘construct encompassing relationships between individuals, groups, organizations, or even entire societies’.[[xxi]] This lends credence to the argument that since the intrinsic nature of social media cannot constitute merely a ‘new means of delivery of any existing service’, it can be classified as a ‘new service’. This contention holds weight because social media platforms did not exist at the time of making commitments. Thus, an act such as banning TikTok could be considered WTO compliant by Members like the aforementioned countries, merely because social media is a ‘new service’, with no pre-existing commitments in their schedules.
Conclusion
Considering that disputes surrounding the bans on TikTok are expected to arise in the near future, the matter of its classification will prove to be a major challenge. The ambiguity regarding said classification could be exploited by countries to shirk away from their WTO commitments. Members could have conflicting interpretations on where social media is to be classified and whether it constitutes a new service entirely. WTO jurisprudence has shown that lack of clear definition of services and commitments often lands members in trouble.[[xxii]] The current classification regime lacks clarity and is unfit to deal with the classification of new, but prominent services such as social media. Ultimately, this is not conducive to the spirit of free trade and transparency that the WTO seeks to uphold. Service classification needs to keep up with the fast changing nature of technological advancements. Updation of service sectors, or at the very least, a clarification on the classification of social media might be essential at this juncture.
[[i]] Craig Chapple, ‘TikTok Crosses 2 Billion Downloads After Best Quarter For Any App Ever’, (Sensor Tower, 29 April 2020) <https://sensortower.com/blog/tiktok-downloads-2-billion>, accessed 14 August 2020
[[ii]] Ministry of Electronics and IT, ‘Government Bans 59 mobile apps which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order’ (Press Information Bureau, 29 June 2020)
<https://pib.gov.in/PressReleasePage.aspx?PRID=1635206> accessed 13 August 2020
[[iii]] Jennifer Hassan and Ruby Mellen, ‘It’s not just the United States: These governments see TikTok as a growing problem’, The Washington Post (London, 3 August 2020) <https://www.washingtonpost.com/world/2020/08/03/its-not-just-united-states-these-governments-see-tiktok-growing-problem/> accessed 14 August 2020
[[iv]] ‘China says India’s ban on Chinese apps may violate WTO rules’, (The Economic Times E-Paper, Reuters, 30 June 2020) <https://economictimes.indiatimes.com/tech/ites/china-says-indias-ban-on-chinese-apps-may-violate-wto-rules/articleshow/76713829.cms?from=mdr> accessed 14 August 2020
[[v]] Services Sectoral Classification List, MTN.GNS/W/120 ,10 July 1991
[[vi]] Central Product Classification (CPC), ST/ESA/STAT/SER.M/77/Ver.2.1, United Nations (New York, 2015) <https://unstats.un.org/unsd/classifications/unsdclassifications/cpcv21.pdf> accessed 14 August 2020
[[vii]] Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R [172], circulated on 20 April 2005
[[viii]] Work Programme on Electronic Commerce, Progress Report to the General Council, Council for Trade in Services, 1999, S/L/74
[[x]] Ruosi Zhang, ‘Covered or not covered: That is the question – Services classification and its implications for specific commitments under the GATS’(2015) WTO Staff Working Paper, No. ERSD-2015-11, <http://dx.doi.org/10.30875/a9bb5d91-en> accessed 13 August 2020
[[xi]] Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services (GATS), Council for Trade in Services, 2001, S/L/92
[[xii]] Council for Trade in Services, Telecommunication Services – Background Note by the Secretariat, S/C/W/299, circulated on 1 June 2009
[[xiii]] Council for Trade in Services, Computer and Related Services – Background Note by the Secretariat, S/C/W/45, circulated on 14 July 1998
[[xiv]] Lee Tuthill and Martin Roy, GATS Classification Issues for Information and Communication Technology Services, in Trade governance in the digital age, ed. by Mira Burri and Thomas Cottier, (Cambridge University Press, 2012) 157
[[xv]] ‘TikTok- Make Your Day’ (Google Play Store), <https://play.google.com/store/apps/details?id=com.zhiliaoapp.musically&hl=en_IN> accessed 12 August 2020
[[xvi]] Rebecca Jennings, “TikTok, explained” (Vox, 12 July 2019) <https://www.vox.com/culture/2018/12/10/18129126/tiktok-app-musically-meme-cringe> accessed on 11 August 2020
[[xvii]] ‘Social Media’ (Merriam-Webster Dictionary, 6 August 2020) < https://www.merriam-webster.com/dictionary/social%20media> accessed 13 August 2020
[[xviii]] WTO Committee on Specific Commitments, ‘Informal Discussion of Classification Issues on Computer and Related Services (CRS) on 10 March 2011 – Summary by the Chairperson – Addendum’, JOB/SERV/44/Add.1, 27 May 2011, para [8]
[[xix]] ‘How TikTok recommends videos #ForYou’, (TikTok, 18 June 2020) < https://newsroom.tiktok.com/en-us/how-tiktok-recommends-videos-for-you> accessed 10 August 2020
[[xx]] Rolf H. Weber and Mira Burri, Classification of Services in the Digital Economy, (Springer-Verlag GmbH Berlin Heidelberg Publications, 2013) 118
[[xxi]] Rolf H. Weber and Mira Burri, Classification of Services in the Digital Economy, (Springer-Verlag GmbH Berlin Heidelberg Publications, 2013) 115
[[xxii]] Ruosi Zhang, ‘Covered or not covered: That is the question – Services classification and its implications for specific commitments under the GATS’(2015) WTO Staff Working Paper, No. ERSD-2015-11, <http://dx.doi.org/10.30875/a9bb5d91-en> accessed 13 August 2020