Economics of AI�

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Topic 5: Digital Governance,

Or What is the Role of Nation States on the Internet?”

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Altuğ Yalçıntaş, Ankara University

altug.yalcintas@politics.ankara.edu.tr

Sources: stockanalysis.com (November 2024) and worldbank.org (2023) [Accessed: November 2024]

NVIDIA < US, China, Germany, Japan, India, UK

Luxemburg GDP per capita: 135,000 USD

Prices = 0, Revenues and Profits > 0

Sources: stockanalysis.com (November 2024) and worldbank.org (2023) [Accessed: November 2024]

NVIDIA < US, China, Germany, Japan, India, UK

Luxemburg GDP per capita: 135,000 USD

Prices = 0, Revenues and Profits > 0

By Alessandro Toso, November 2025

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What are our options?

Nation states

or

nation companies?

Source: https://futureoflife.org/open-letter/pause-giant-ai-experiments/ [Accessed November 2024]

Source: https://superintelligence-statement.org/ [Accessed December 2025]

Source: https://youtu.be/P7Y-fynYsgE?si=SkaOwTexjAoDRKKB [Accessed December 2025]

Ekşisözlük

PayPal

Forms of peer-to-peer (p2p) networking

Bitcoin (2009 to date)

What does peer-to-peer mean?

Forms of peer-to-peer (p2p) networking

Forms of peer-to-peer (p2p) networking

The roles of nation states on the Internet

Nation states (try to):

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• tax big data corps. (FB, Google, & others)
• take precautions to prevent manipulations (e.g. Cambridge Analytica), monopolizations (e.g. the EU and the US on Google), violations of privacy (e.g. GDPR and AI Act), and IP infringements (e.g. restrictions on Sci Hub and Lib Gen)
• enforce the rule of law (UBER, Twitter etc.)
• protect the environment (the right to repair)

PTT Messanger

Amazon

Hepsiburada

Uber

Bitaksi

Baykar

TOGG

Netflix

Blutv (now HBO)

Source: The State of Turkish Gaming Industry: An In-depth Analysis Evaluation. 2024. https://www.invest.gov.tr/en/library/publications/lists/investpublications/the-state-of-turkish-gaming-ecosystem.pdf [Accessed May 2025]

Source: https://owlesg.com/2024/03/26/ais-environmental-impact-balancing-innovation-with-sustainability/

Accessed December 2024

Source: Alex Lawson, https://www.theguardian.com/technology/2024/oct/15/google-buy-nuclear-power-ai-datacentres-kairos-power Accessed December 2024

Source: https://news.microsoft.com/source/features/sustainability/project-natick-underwater-datacenter/

Accessed December 2024

Source: David McCabe and Nico Grant, New York Times, 13 August 2024, https://www.nytimes.com/2024/08/13/technology/google-monopoly-antitrust-justice-department.html

An observation

Censorship and the violation of the freedom of speech have been among the most significant issues of the Internet economy since the 2000s.

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The freest countries:

1. Estonia
2. Iceland
3. Canada
4. Germany
5. Australia
6. The US
7. The UK

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The least free countries:

1. China
2. Iran
3. Syria
4. Ethiopia

13. Russia

15. Turkey

16. Sudan

Source: Freedom on the Net 2018. Freedom House.

The freest countries:

1. Iceland
2. Estonia
3. Canada
4. Costa Rica
5. The UK

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The least free countries:

1. China
2. Myanmar
3. Iran
4. Cuba

5. Russia

16. Turkey

17. Sudan

Source: Freedom on the Net 2023. Freedom House.

Source: Freedom on the Net 2020: The Pandemic’s Digital Shadow. Freedom House.

Source: Freedom on the Net 2023. Freedom House.

Source: Freedom on the Net 2020: The Pandemic’s Digital Shadow. Freedom House.

Source: Freedom on the Net 2020: The Pandemic’s Digital Shadow. Freedom House.

Source: Freedom on the Net 2023. Freedom House.

Source: Freedom on the Net 2020: The Pandemic’s Digital Shadow. Freedom House.

Source: Freedom on the Net 2020: The Pandemic’s Digital Shadow. Freedom House.

An observation

Censorship and the violation of the freedom of speech have been among the most significant issues of the Internet economy since the 2000s.

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However,

• Since the advent of the VPNs, there has been less concern among individual users on the Internet about the violation of the freedom of speech and censorship.

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Source: Global VPN Usage Statistics in 2020, https://www.top10vpn.com/global-vpn-usage-statistics/ [Accessed November 2021]

Source: Dipen Pradhan and Aashika Jain. 2023. “VPN Statistics And Trends In 2023” Forbes https://www.forbes.com/advisor/in/business/vpn-statistics/ [Accessed December 2023]

Source: “Why do people use VPNs and how? We’ve asked you and here are the answers” Ad Guard https://adguard-vpn.com/en/blog/vpn-features-survey-adguard-us-iran.html [Accessed December 2025]

Source: “Why do people use VPNs and how? We’ve asked you and here are the answers” Ad Guard https://adguard-vpn.com/en/blog/vpn-features-survey-adguard-us-iran.html [Accessed December 2025]

Censorship and the violation of FoS: �Inconsistent, inapplicable, & nonsense

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• Wikileaks has been partially or totally banned in many countries, including the US,
• but the docs have been in circulation and Twitter and Facebook accounts related to Wikileaks are up & running.
• Sci Hub and Lib Gen infringe on proprietary IP rights; they are banned in many countries, including Italy,
• but the mirror sites, which are frequently used by the scholars in North America and Northern Europe, are up & running.

Censorship and the violation of FoS: �Inconsistent, inapplicable, & nonsense

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• Wikileaks has been partially or totally banned in many countries, including the US,
• but the docs have been in circulation and Twitter and Facebook accounts related to Wikileaks are up & running.
• Sci Hub and Lib Gen infringe on proprietary IP rights; they are banned in many countries, including Italy,
• but the mirror sites, which are frequently used by the scholars in North America and Northern Europe, are up & running.

TikTok and WeChat banned since 2020

Censorship and the violation of FoS �in North America and North Europe

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• Napster, Pirate Bay, …, Wikileaks, SciHub, LibGen, torrent sites, … TikTok, WeChat …
• Face recognition systems

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• Netflix, HBO etc.: geoblocking
• Twitter:
• Donald Trump’s account (2016)
• Ekrem İmamoğlu’s account (2025)
• YouTube: anti-vaxxer channels and videos

By governments

By internet corporations

Source: John Bohannon. 2016. “Who is downloading SciHub? Everyone’” Science

http://www.sciencemag.org/news/2016/04/whos-downloading-pirated-papers-everyone [Accessed May 2018]

An observation

Censorship and the violation of the freedom of speech have been among the most significant issues of the Internet economy since the 2000s.

​

However,

• Since the advent of the VPNs, there has been less concern among individual users on the Internet about the violation of the freedom of speech and censorship.
• Social media platforms are also concerned (sometimes, more than individual users) because the sharing economy requires more open and more free flow of data.

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Source: https://blog.wikimedia.org/2018/05/02/we-miss-turkey/ [Accessed June 2019]

Forms of peer-to-peer (p2p) networking

The roles of nation states on the Internet

• Since the 1960s,
• governments have been a digital player on the Internet
• governments have invested in the Internet infrastructure
• Since the 2000s,
• governments have monitored the netizens on the Internet
• Today,
• governments implement policies of digital protectionism and national planning

Digital protectionism �as a new form of national planning

In the coming years, a more significant issue will be digital protectionism.

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Digital protectionism �as a new form of national planning

A governmental policy aiming at

• Controlling the international flow of data
• Localizing the data (net data exporter 🡪 net data importer)
• Incentivizing local social media corps. to develop alternative platforms
• Domesticate / internalize profits and collect taxes*

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*Although data is a commodity and creates value, it is not included in GDP calculations (in many countries).

Kaynak: UNCTAD. 2021. Digital Economy Report 2021

Kaynak: UNCTAD. 2021. Digital Economy Report 2021

Source: Nigel Cory. 2017. “Cross-Border Data Flows: Where are the Barriers, and What do they Cost?” Information Technology and Innovation Foundation, https://itif.org/publications/2017/05/01/cross-border-data-flows-where-are-barriers-and-what-do-they-cost [Accessed June 2019].

Source: https://mobile.reuters.com/article/amp/idUSKBN222066 [Accessed April 2020]

The roles of nation states on the Internet

Nation states (try to):

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• tax big data corps. (FB, Google, & others)
• take precautions to prevent manipulations (e.g. Cambridge Analytica), monopolizations (e.g. the EU and the US on Google), violations of privacy (e.g. GDPR and AI Act), and IP infringements (e.g. restrictions on Sci Hub and Lib Gen)
• enforce the rule of law (UBER, Twitter etc.)
• protect the environment (the right to repair)

Tools (selected)

• Competition law
• IP law
• GDPR (2018)
• The AI Act (2024)
• More to come…

World Trade Report 2018, WTO

The Future of World Trade How Digital Technologies are Transforming Global Commerce. World Trade Report. WTO. 2019.

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• Page 149: While many analysts consider that there has been a rising trend towards “digital protectionism” or “digital trade barriers”, it has also been argued that measures alleged to constitute barriers to digital trade may often serve legitimate public policy objectives (Aaronson, 2016).

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Aaronson, S. A. (2016), “The Digital Trade Imbalance and Its Implications for Internet Governance”, Paper Series No. 25, Waterloo: Global Commission on Internet Governance.

Good practices - Turkey

• Baykar
• Dergipark
• Ekşisözlük
• Retail stores: Getir, Hepsiburada, Trendyol (despite Amazon)
• Turkcell Apps (such as BIP, Fizy, Paycell)
• PTT Messanger (???)

Digital protectionism �(China, Russia, Iran, Turkey)

Source: Author, 2019

Conclusions

In the coming years, a more significant issue will be digital protectionism.

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However,

(a) More nation states do not necessarily mean more censorship.

Conclusions

In the coming years, a more significant issue will be digital protectionism.

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However,

(a) More nation states do not necessarily mean more censorship.

(b) More internet corps do not necessarily mean more freedom.

Source: Wikileaks, 1 of 41 slides about the activities of NSA, revealed by Edward Snowden, 2013.

2018. Public Affairs Books.

Professor Shoshana Zuboff, Harvard Business School

Conclusions and Policy Implications

• The relevant policy question is not “how should policy makers achieve digitalization at national levels?”

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It is rather:

• How should the netizens protect themselves from the harmful consequences of digitalization that has already been underway?
• What roles should nation states play in structuring the data that flows internationally?

Conclusions and Policy Implications

Force social media corps. and nation states to

• release the proprietary rights of data produced by the netizens (except for private data) so that data are open, free, and decentralized
• pay the netizens for every piece of data that they own

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• Invest in blockchain social media

such as Steemit (a paying platform, data is encrypred and decentralized)

Reading Suggestions

• Uçar, Müge and Altuğ Yalçıntaş. 2023. “GDPR and Digital Protectionism in the EU: The Cases of Android and iOS” Journal of Economic Issues 57 (4): 1079-1094.
• Yalçıntaş, Altuğ and N. Alizadeh. 2020: “Digital Protectionism and National Planning in the Age of the Internet” Journal of Institutional Economics 16 (4): 519-536.
• Yüksel, Uğur and Altuğ Yalçıntaş. 2020. “Büyük Veri Çağında Uluslararası Politik Ekonomi: ABD ve Çin’de Dijital Korumacılık” Historia 1923 7 (Kış): 76-93.
• Yardımcı, Gizem and Altuğ Yalçıntaş. 2020. “Türkiye’nin Dijital Politikaları: Fırsatlar, Tutarsızlıklar ve Çözüm Önerileri” İktisat ve Toplum Dergisi 114 (Nisan): 65-74.
• Yalçıntaş, Altuğ. 2021. Dictionary entries: “Dijital Korumacılık” In: Ekonomi Sözlüğü. Edited by Kudret Emiroğlu, Bülent Danişoğlu, Binnur Berberoğlu. İstanbul: Islık Yayınları.

Watching Suggestions

• Yalçıntaş, Altuğ. 2020. “Dünyada ve Türkiye’de Dijital Korumacılık” Yıldız Technical University, Webinar of the Department of Economics, April 23 [Link].
• Yalçıntaş, Altuğ. 2020. “Covid Öncesi ve Sonrası İthal İkameci Dijitalleşme” Ankara University, ANKUZEM Webinars, 8 June [Link].
• Yalçıntaş, Altuğ. 2021. “İktisadi Planlama Açısından Kripto Varlık Piyasaları” Kripto Varlıklarda Düzenleme Arayışı, 8 July [Link]