Net.Wars: Pause For Thought

Wendy Grossman’s weekly Net.Wars column, coverage of the latest skirmishes in the border wars between cyberspace and real life.

The great playwright, director, and drama critic George S. Kaufman once famously remarked, “Satire
is what closes Saturday night. This week, satire got 12 people killed at the French magazine Charlie Hebdo. The papers have far more details than net.wars can, and others such as Jon Stewart, Tina Fey, Conan O’Brien, myriad cartoonists, and Ian Hislop have expressed shocked condolences more eloquently, though see also Jacob Canfield for an unsentimental view of the magazine’s output (and the Nielsen-Hayden-hosted discussion where I found that link). The Economist put it this way: Nothing can be done with a pencil or a keyboard that warrants a reprisal with a Kalashnikov.

But this is 2015 and, unfortunately, anyone interested in freedom and privacy can’t pause to contemplate the significance of an awful crime but must immediately plot strategy against the probability that opportunistic authorities will seize the shocked aftermath to propose whatever repressive policy has been politically unacceptable until now. It’s hard to believe there’s anything left to add to the surveillance and censorship now endemic in many Western supposed-to-be democracies, but the depressing likelihood is that they’ll think of something. The upshot is that at the moment when we should most be thinking of other people, we are under pressure to think instead of ourselves and the battles that may lie ahead.

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The earlier part of Week 1 of 2015 was preoccupied with the much more ordinary internet storm around the so-called VATmess. Unnoticed by most people until it came into force on January 1, the EU’s new rules require retailers of digital goods to collect VAT based on the location of their customers (in VAT-speak “the place of supply”). The fairly obvious goal is to stop large (mostly US) companies from taking advantage of varying tax rates across the EU to compete on unfairly favorable terms and diverting tax revenues to low-rate areas such as Luxembourg. The irony, as many have pointed out, is that the result will likely be to enrich those same (mostly US) companies by forcing microbusinesses to sell through large, third-party platforms rather than directly from their own sites, further damaging not only them but the open internet. Oops. The alternative is to stop selling into EU countries other than their own or register for VAT and the MOSS (“mini-one stop shop”) service in their country and keep records of everyone’s location for ten years.

Life is one closely complicated angle, Gilbert and Sullivan’s Don Alhambra complained in The Gondoliers – and his creators never had to deal with VAT, let alone 28 countries with 75 different rates among them. TechCrunch has a nice summary of the migraines all this will cause, especially for sole traders and start-ups. What the rules need, of course, is a threshold below which people can trade based on their own location instead of that of their customer’s. More details on how to comply – and how to protest – on Github, courtesy of Rachel Andrew.

It’s clear that the people who dreamed up these new rules did not think sufficiently long and hard about the consequences of their plan before taking action. I understand it thusly: government tax authorities are staffed by the opposite of sole traders and entrepreneurs: People With Jobs. PWJs often understand large organizations reasonably well because they work for them, but I believe that to them People Without Jobs are their shiftless cousin who sleeps all day on their couch and is always “borrowing” money. Entrepreneurs and sole traders – that is, *us* – are not, to PWJs, people who *work*. We’re unemployed – and if we have money we must have gotten it by nefarious means. It’s only a theory, but I think it accounts for the attitude of general distrust.

Also in play may be the generation for whom the internet is Facebook and apps: for latecomers with smartphones and tablets who are almost wholly internet *consumers* the notion that everyone who sells anything works through app stores and third-party platforms seems entirely reasonable. The reality, of course, is that digital goods are sold in all sorts of ways, from public web pages to private email, and that people accepting payment via Paypal need know nothing more than the customer’s registered email address. In the old, manual days, the quickest way to get these rules to go away would have been for everyone flood their VATpeople with returns requiring the calculation and transfer of dozens of tiny sums, making the system uneconomic to operate. Now, however, with required electronic submission via the internet and automated calculation via computer, the authorities can afford to create far more burdensome rules than they could in the past. Ain’t technology wonderful?

There’s another aspect of these rules that might be worth worrying about. HMRC’s guidance says suppliers of digital goods – ebooks, music, images, software – must collect each customer’s billing address and credit card sort code and store that information for ten years (which also means registering with the information commissioner as a data controller). This means far greater stored detail about what cross-border customers access and think about – and consequently a whole new vector for
surveillance.

It seems only yesterday we were all enthusiastic about the new year. Holiday’s over.

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier
columns in this series. Stories about the border wars between cyberspace and real life are posted occasionally during the week at the net.wars Pinboard – or follow on Twitter.