In October 2016, just two weeks before Prime Minister Narendra Modi made his controversial policy statement on demonetisation, some 3.2 million debit card accounts were hacked in leading banks such as State Bank of India, ICICI Bank, Axis Bank and Yes Bank. A few weeks earlier the banks had started asking customers to change passwords, indicating that they knew of the vulnerability of the systems to hacking.
Barely a month earlier the American giant Yahoo! had its 500 million accounts hacked, of which credentials for 200 million were listed in the black market for hacked material on the Web. Meanwhile authorities in Jharkhand discovered a racket which was phishing for bank details from unsuspecting customers.
This is only the tip of what is making the digital economy a risky place. Apart from the risk to bank and email accounts, the digital world is fraught with risks to privacy, where the companies that run the Web have information on a person’s habits and preferences, as revealed in her browsing history. Moreover there is a real danger of access to emails being given to intelligence agencies. All this springs from the highly concentrated nature of ownership and control of the digital economy.
With the Indian government now promoting a digital India with so much gusto, what is often overlooked is the overall control it has on our lives. The Aadhaar card, the PAN number, bank accounts, passport, driving licence, railway and airline reservations, payments made by credit or debit cards and the purchase of property are now all linked in a digital system that provides ample opportunity for snooping. If a government is sufficiently determined, it could lead to totalitarian control.
What is certainly happening is a loss of privacy, of concern to the individual but seen as an opportunity by a government eager to roll out a “digital” India. Not only can the government snoop into our private lives, but the Internet becomes an opportunity for fraudsters and cyber criminals who can penetrate out accounts. This is all the more so with payment banks and rural banks, where the possible thefts are not understood or the account holders are gullible.
Another danger is market control and manipulation if private interests are involved. At the moment in India the only companies that have an interest in digital transactions are either companies like Amazon and Flipkart that only sell through Internet channels, or telecom companies like Reliance Jio and Bharati Airtel, who provide the telecom channel for people to approach the Internet. There are at the moment no Internet search engines like Yahoo! or Google, or those who service social contact like Facebook, or large equipment or software providers like Microsoft or Apple.
Of the 10 largest corporations in the world, six — Google, Apple, Microsoft, Amazon, AT&T and Facebook — are linked to the Internet, software or to telecom. This oligopoly with market capitalisation of $2.6 trillion (compared to India’s GDP of $2.1 trillion) is controlled by a few individuals or corporations but can decide the destiny of countries. No anti-trust legislation to regulate them can be passed even in the US. They are a law onto themselves. Their influence is so great that the Harvard Business Review comments: “Digital is not just part of the economy — it is the economy.”
These and other Internet giants consider the information or data on various individuals to be a marketing gain. The commercial risk of the Internet goes beyond personal privacy to crucial sectors such as banking, defence, transport and energy. That none of these is fully secure is evident from the ease with which WikiLeaks was able to penetrate government firewalls in the US.
This is because digital transactions and use are all-pervasive, and without computers, the software they use and the Internet that allows them to transfer data between corporations and within them the present economy could not work. One result of this is that collaboration between many companies makes sure they work together in a number of highly complex areas, including healthcare, home automation and city administration. But because of this wealth is getting more concentrated, there is an intrusion of basic privacy, and because of innovations like Facebook people are unable to relate to each other directly but do so through such an intermediary.
The surrender of private information such as one’s search history on the Internet, and even private emails to search engines like Google and list of all friends with their peculiar tastes and preferences to social sites such as Facebook are mined by these companies to market advertising at that person. This is because with the digital traces left behind, “the Internet is thus constituted as a vast virtual shopping mall, with its users bombarded with a constant stream of advertising.”
In her book, The Cybertariat Comes of Age, Ursula Huws argues that: “The internationalisation of capital and globalisation of markets has brought about a dramatic reduction in the ability of any given national government to exercise the kinds of control over capital that were in place… things like the antitrust laws that enabled states to break up monopolies, and the ability of governments to tax corporations.”
Of all the dangers, the ones to the banking system, which has relied so much on digitisation, are the most pernicious. The fears of cyberwar aimed at financial institutions is at the top of national security concerns. US President George W. Bush was informed after 9/11 that: “If the 9/11 perpetrators had focused on a single US bank through cyberattack, and it had been successful, it would have had an order of magnitude greater impact on the US economy than the physical attack.” This led in a few years to more cybersecurity, which meant a greater surveillance of citizens, and a loss of personal freedom and privacy. The present regime in India may have already crossed that bridge over stormy waters.