Interview: BSA speaks on emerging tech, innovation and digital trade

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by | August 8, 2018

BSA is “The Software Alliance”, the “principal trade association for the world’s most innovative software companies” and while it is famously known for its “compliance programs that promote legal software use”, the organisation also “advocates for public policies that foster technology innovation and drive growth in the digital economy”.

Not just an anti-piracy organisation, BSA reminds us that it “actively engages governments and other stakeholders on a range of issues relevant to emerging data-driven technology”.

BSA’s Jared Ragland (senior director, Policy – APAC) and Darryn Lim (director, Policy – APAC) were in Australia during the last week of June 2018, and offered an interview on “how well-positioned Australia is to lead the region on matters pertaining to the digital economy, as well as elements for digital trade that Australia could embrace in its negotiations with the EU”.

I wasn’t able to catch up with both gentlemen when they were in town, but I took the opportunity to ask the BSA a series of questions in an email interview, which was conducted with Ragland which is in full below.

In light of the Turnbull administration’s recent announcement on 23 May of the opening of negotiations with the European Union, the BSA noted that it sees an opportunity for Australia to lead the region in advancing rules and initiatives to support on-going innovation”.

In your original email to me, you state that “such rules and initiatives are important for small and medium-sized enterprises, as the announcement recognises, and also the broader Australian economy”, and note that you’d both be happy to talk about “how well-positioned Australia is to lead the region on matters pertaining to the digital economy, as well as elements for digital trade that Australia could embrace in its negotiations with the EU.”

Can you please expand on this – what can Australia do to not only lead the (presumably APAC) region in advancing rules and initiatives to support on-going innovation, but how can this leadership help drive a better outcome for Australia in any EU FTA agreement?

Jared Ragland: Today’s digital economy relies heavily on the ability to transfer data across borders.

Cloud computing and other emerging technologies are the underpinning of the digital economy and are democratising access to affordable and scalable storage and information processing and sharing capabilities for enterprises both large and small. This allows them to take advantage of new business opportunities, enhance their productivity, achieve cost savings, strengthen data security, and even help the environment. Colleagues and clients can collaborate across the globe in ways never before possible.

All of these activities are reliant on cross-border data transfers.

The Australian Government acknowledged the immense personal and economic benefits of data-enabled innovation in its recent Digital Economy Strategy. (“The Digital Economy: Opening Up the Conversation”, September 2017, available here.)

The report wisely noted that Australia enjoys a competitive advantage in “energy resources and medical and mining related technologies” that can be better leveraged through sound data innovation policies. This is not just a theoretical opportunity. In fact, McKinsey predicts that policies that encourage better uses of data could boost the Australian economy by $140 billion to $250 billion over the next eight years.

Australia has taken a leadership role in negotiating the ground-breaking digital economy related provisions in the Comprehensive and Progress Trans-Pacific Partnership, or CP-TPP. These provisions, which require CP-TPP parties to permit the cross-border transfer of data and prohibit them from adopting requirements to locate data processing and storage infrastructure onshore (among other things), are precisely the types of policies that will help Australia realise the full benefits of the digital economy.

Australia is also actively shaping the digital trade landscape through other multilateral and bilateral fora, including at the World Trade Organisation and in regional investment agreements.

The EU-Australia FTA is yet another forum in which Australia has the opportunity to advance these modern rules and initiatives to support on-going innovation.

The inclusion of strong digital trade provisions in the EU-Australia FTA will not only benefit Australia-EU trade relations, it also would have a significant positive impact on the region – the EU is pursuing free-trade agreements with several other countries, including Indonesia and New Zealand, and having high-standard digital trade provisions in the EU-Australia FTA will serve as a strong foundation on which the EU’s other free-trade agreements can be modelled, which would benefit Australian companies doing business with those markets as well.

BSA is encouraged by, and strongly supportive of, Australia’s role in advocating digital trade rules in the international area. Given the work that Australia has already done, and is pursuing in the area, Australia is in a good place to continue leading the region in this area.

What are the digital trade principles you’re working on as the BSA?

We urge a well-constructed and modern trade agreement that includes truly 21st century obligations that drive job creation, competitiveness, and innovation. No digital trade framework would be complete without protections for the development of emerging technologies, which allow companies to expand and create new jobs. These provisions are critical for the future of the global economy.

We accordingly strongly support a modern agreement that:

Builds on existing international law on e-commerce and the emerging international consensus on digital trade;
Addresses the current and anticipated challenges faced by the software industry; and
Establishes rules in evolving areas, especially on data-driven economic activity.

The driving principle should be: no market access barriers and no discrimination against innovative software services. For more information, we refer you to BSA’s digital trade agenda, “Modernising Digital Trade: An Agenda for Software” which you may find here.

What emerging technologies are you talking about and targeting?

Software innovation is fostering the development of a range of cutting-edge technologies, such as artificial intelligence and blockchain, that offer great promise to improve lives and help solve intractable problems.

AI solutions are already leading to improvements in healthcare, advances in education, more robust accessibility tools, stronger cyber security, and increased business productivity and competitiveness, impacting every sector. AI also has the potential to generate substantial economic growth and enable governments to provide better and more responsive government services while addressing some of the most pressing societal challenges.

We recently weighed in with the Department of Communications and the Arts about one practical step to help spur greater AI innovation in Australia. Updating the Copyright Act to ensure that researchers and businesses can engage in “text and data mining” will be key to recognising Australia’s ambitions for the digital economy. You may find our submission here.

Blockchain is perhaps best known as the underlying technology behind Bitcoin, enabling users to verify purchases, track exchanges of funds, and keep records that anyone can audit. However, it has applications that extend beyond currency transactions. Uses and implementations open a world of opportunity for industries and end users. Indeed, blockchain is slowly emerging as a virtual foundation for massive shifts in how business is conducted across different sectors and industries.

AI and blockchain are but some of the emerging technologies that we are seeing. Given the pace of advancement of technology, it is certain that we will continue to see more innovative technologies being developed.

To ensure that these emerging technologies can deliver their greatest positive potential, industry, government, academics, and public interest leaders must all work together to advance policies and practices that enable us as a society to take full advantage of them. A flexible policy framework is necessary to enable successful deployment of AI and blockchain in global markets, and this is where BSA is able to effectively advise policymakers.

How do the digital trade rules in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and other trade agreements we are party to, differ from those we have in mind for the EU, and if they are different, why?

The CP-TPP was the first agreement to include binding commitments among the participants to allow international data transfers and prevent on-shore localisation requirements of servers and other data processing systems, among other things. This represents a new foundation for modern trade agreements adapted to promoting digital trade in the modern economy.

The Department of Foreign Affairs and Trade’s “Future of Digital Trade Rules” discussion paper contains an outline of the provisions that Australia pursues in its trade agreements in general. Those provisions are similar to those found in the CP-TPP.

You speak the importance of ensuring the free-movement of data across borders and avoiding data localisation mandates – isn’t data generally already free to move where it wants? Obviously you talk about data localisation mandates, but with countries mandating company and private data remain in-country, how can you avoid this? If you avoid it, isn’t it breaking the laws of particular countries?

Some countries in the world, and in the region, place restrictions on international data transfers. We often see these restrictions applying to personal data, financial data, and public sector data. These requirements are frequently driven by the myth that data is not secure when it is processed in other jurisdictions.

Australia has been a leader in pushing back against these requirements through the CP-TPP, which creates an important precedent. The reality is that the location of the service provider has little impact on its ability to secure customer data. We can achieve data privacy and security through accountability mechanism, not localisation mandates.

How does the GDPR fit into the above?

At BSA, we support policies that both address privacy concerns and spur innovation that can improve lives and create jobs. We recognise the GDPR’s importance in harmonising data privacy laws across the European Union, improving legal consistency across member states, and increasing business certainty. While there is no universal approach to privacy, we encourage governments throughout the world to implement effective privacy regimes that encourage informed consumer choices, while safeguarding the ability to transmit data across borders. This is critical to ensuring that economies and consumers continue to derive the benefits of cutting-edge software-based innovations.

Strong support for encryption is laudable, and we see Apple leading the charge to keep private data private and encrypted – at least on devices. In the cloud, or specifically iCloud, if the government asks Apple for the data, it is effectively obliged to provide it, as opposed to encrypted devices which Apple says it isn’t obligated to decrypt – or at least, in the US.

You refer to the “related debate in Australia around law enforcement access to encrypted information” – what can the tech industry, the BSA and its members do to help Australia’s Government and those around the world to respect encrypted information, and what will the BSA and its members do if Australia legislates they must give that data up?

BSA and our members have been involved in discussions with governments, policymakers, and industry bodies around the world for several years on efforts to facilitate law enforcement access to communications in a way that balances associated concerns.

Through these discussions, our experience is that moving the encryption debate forward, and finding an enduring solution, requires many groups to come together to balance the legitimate rights, needs, and responsibilities of governments, citizens, providers of critical infrastructure, third party stewards of data, and innovators. Drawing on this experience, BSA has developed the BSA Encryption Principles, a set of eight principles against which, in our view, an encryption regulation or policy should be evaluated.

The eight principles are:

Improving data security;
Enhancing law enforcement and counter-terrorism activities;
Promoting privacy;
Protecting confidential government information;
Encouraging innovation;
Defending critical infrastructure;
Understanding the global impact; and
Increasing transparency.

You may find these principles here.

We recognise that the digital age has created both opportunities and obstacles for law enforcement. On the one hand, the volume of digital evidence available to law enforcement is greater than ever before. On the other, criminals are availing themselves of the very technologies used to secure our critical infrastructure in order to obfuscate their communications.

These are real challenges. Our goal is to work with lawmakers to help identify practical solutions that balance these eight aforementioned principles.

How actively are BSA members developing even stronger encryption, and what involvement does the BSA itself have with that work?

Securing the data at the heart of our modern digital economy is a never-ending effort tied to multiple, interconnected parties. This involves not just our members, who create products and services, but the consumers who rely on those products and services to power their daily lives, the companies that encrypt human resources, sales, or other data, and even the law enforcement officials who investigate crimes. With so many interests at stake, it is vital that discussions about the future of encryption involve all perspectives.

An enduring solution to the encryption challenge must balance the legitimate rights, needs and responsibilities of:

Governments to protect personal and confidential information they hold and to prevent terrorist and criminal acts and prosecute offenders;
Individual citizens’ right to secure the privacy of their personal information.
Providers of critical infrastructure and essential services — including water, electricity, transportation, banking, and health — to protect their operations from cyberattacks;
Third-party stewards of personal data and confidential business information to protect the data entrusted to them;
Innovators to develop products and services that improve our daily lives and drive economic growth free of government mandates.

The BSA Encryption Principles discussed above incorporate these considerations, and drawing on this work, we are continuing to engage with policy-makers and other stakeholders around the world to seek balanced regulatory environments that ensure that all legitimate interests are addressed.

What bodies does the BSA work with in Australia in government and elsewhere beyond its members?

BSA is the leading advocate for the global software industry before governments and in the international marketplace. Its members are among the world’s most innovative companies, creating software solutions that spark the economy and improve modern life.

With headquarters in Washington, DC, and operations in more than 60 countries, BSA pioneers compliance programs that promote legal software use and advocates for public policies that foster technology innovation and drive growth in the digital economy.

We have offices around the world. In the Asia-Pacific region, we have offices in Bangkok, Beijing, New Delhi, Seoul, Singapore, and Tokyo.

In Australia, we engage with parliamentarians from both the ruling and opposition parties, with responsibilities for cyber security, law enforcement access, digital economy and intellectual property, and with agencies in charge of implementing such policies, including the Department of Communications and the Arts and the Department of Foreign Affairs and Trade.

Who are the BSA’s members?

BSA’s members include: Adobe, Amazon Web Services, ANSYS, Apple, Autodesk, AVEVA, Baseplan Software, Bentley Systems, Box, CA Technologies, Cadence, Cisco, CNC/Mastercam, DataStax, DocuSign, IBM, Informatica, Intel, MathWorks, Microsoft, Okta, Oracle, PTC, Salesforce, SAS Institute, Siemens PLM Software, Splunk, Symantec, Trend Micro, Trimble Solutions Corporation, and Workday.

What are the BSA’s top three actions against piracy in Australia of all time?

BSA runs numerous campaigns and initiatives across APAC in our effort to create awareness of the pitfalls of unlicensed software use, and educate businesses and individuals on how to mitigate these risks. In Australia, our top three actions include:

Running an enforcement campaign on behalf of members which consists of taking legal action against commercial entities that use unlicensed software. All of BSA’s actions in Australia have, to-date, resulted in out-of-court settlements. Our top three settlements each consisted of at least A$200,000 in damages. On top of paying damages, the infringers also purchased original software products from authorised resellers.
Encouraging people with sufficient evidence to step forward to report the use of unlicensed software by commercial entities, and rewarding them up to A$20,000 for their co-operation.
Spreading awareness through bi-annual publication of BSA’s Global Software Survey, which quantifies the volume and value of unlicensed software installed on personal computers in more than 110 countries and regions.

What activities is the BSA undertaking in 2018 to remind companies and individuals of their intellectual property and non-piracy obligations?

In 2018, BSA released the Global Software Survey: Software Management – Security Imperative, Business Opportunity. This survey quantifies the volume and value of unlicensed software installed on personal computers in more than 110 countries and regions, and includes nearly 23,000 responses from consumers, employees, and CIOs.

In this biannual report, BSA urges Australian businesses to assess the software on their networks and eliminate unlicensed software in an effort to reduce the risk of cyberattacks and boost their bottom line. BSA also continues to run its reward program, through advertising on social media channels, encouraging people with knowledge of unlicensed software use to come forward and file a report.

Is the reward still $5000 or has it increased?

For those with sufficient evidence of a company using unlicensed software, they can file a report confidentially and be eligible for a cash reward of up to A$20,000.

In a world of cloud and subscription services, how much has piracy decreased?

While industries do see a general declining trend for copyright infringement, there is still a lot more to be done, as the economic impact of piracy remains high. To that end, BSA also educates organisations through its suite of software asset management solutions.

SAM Advantage is an online course aligned to the ISO/IEC19770-1 SAM standard designed to educate users on SAM best practices and how to proactively increase IT efficiencies and reduce risks.

BSA also commissioned a Global Software Survey around piracy, conducted by IDC, which calculated that merely by increasing its software compliance rate by just 20% (for example, lowering an unlicensed software rate from 24% to 19%), an enterprise with annual revenue of US$83 million — the average in our survey — could increase profits by an astounding 11%.

What do you both think the BSA will be working on over the next decade, what might the BSA of 2028 look like?

BSA’s policy agenda focuses on issues that have the greatest impact on members’ ability to innovate and participate in the global economy. As the technology and regulatory environment evolves, BSA will continue to work actively with our members to ensure that the issues that we are engaged in remain relevant to them. One area that we’re very excited about is emerging technology, such as artificial intelligence, blockchain, and quantum computing.

What’s the BSA’s final message to iTWire readers in this interview?

The software industry has seen more change in the last five years than most industries experience in a lifetime. With software innovation evolving ever so rapidly, it’s even more crucial for governments and multilateral organisations to keep up with policies that reward innovation in an increasingly complex global policy environment.

At BSA, we are committed to working closely with our members, who are among the world’s leading software companies, to drive innovation in the digital economy. We are well positioned to do so, given our influence through our substantive depth of knowledge and expertise and our global network of policy and legislative professionals in 60 countries.


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