Regulations can’t keep up with rapidly changing digital platforms that harm end users with misinformation, offensive content, breach of privacy, and business users with restrictive policies. Because it takes so long to pass regulations, and laws can differ from country to country, digital platforms continue to cause these and other problems. But a solution could be a voluntary certification system, according to an Academy of Management Perspectives article. Lavie and coauthors Oreste Pollicino of Bocconi University and Tommaso Valletti of Imperial College London identified the different kinds of harms digital platforms inflict in their article, “Certification of Business Practices and Algorithms as a Complementary Approach to Platform Regulation. the certification process would include: (1) Identifying potentially harmful practices and defining standards for best business practices that serve stakeholders and create evaluation metrics for these practices, (2) Inspecting platform business practices and algorithms by a reputable third-party organization with expertise in computer science, business administration, and law, (3) Analyzing software code and assessing AI training data to detect biases and harmful practices, and (4) Providing a standardized rating system so users can compare platforms, track improvements, and make informed decisions. Lavie noted that “an advantage of certification, as opposed to regulation, is that regulation laws take many years to craft. Certification standards can be updated every year or every six months. In addition, the whole idea of certification standards is that of preemption, because you are going to set a standard, and the companies would want to meet the standard upfront before they get inspected. The idea is to motivate them to achieve a favorable rating. It’s about market share, business reputation, and the ability to offer a value proposition to customers. Certification can help differentiate their products and services and increase their market share. Lacking certification could hurt their reputation, putting them at a disadvantage. It’s unlikely that the Big Tech firms would be the first to certify their platforms, but other small entrepreneurial platforms that seek to serve the interests of their users, may leverage certification to signal a unique value proposition.” “Certification is voluntary, so companies are not forced to certify. But for those of us who care about this, we will have a way to follow our preferences and choose between different digital platforms and decide which option is better for us. Certified companies can differentiate themselves by saying, ‘We are better at serving the needs of customers, by keeping their data private, by not exploiting our stakeholders.’ And other companies would say, ‘We are low cost, we are efficient. But we might do it in ways that you wouldn’t like.’ Companies and customers would have these option, but at the moment, we don’t have many options when it comes to digital platforms,” he said.
Source: Academy of Management Insights article by By Michael E. Bratsis