HANNAH TSANG
The emergence of private social credit systems in China has recently caught the attention of Western media. Many have coined such a system as Orwellian, in reference to George Orwell’s famous dystopian novel Ninety Eight-four. While such analogies pass for great headlines, they are not accurate reflections of the current reality in China.
In China, a social credit system takes the form of private corporations producing a credit score based on their analysis of the user’s profile. Its function is to track individual’s relationship and behavioural patterns to help determine lending systems, and ultimately the trustworthiness of citizens.[1] The ‘Sesame Credit’ system developed by Alibaba is a notable example of this. Although these private systems fall short of a fully-fledged governmental scoring scheme that serves as a tool to tighten control over citizens’ private life (as dramatized in Netflix’s ‘Black Mirror’), they hold a diverse range of implications for digital rights protection and the data protection landscape.
GIVING THE SYSTEM CREDIT
In some ways, the private social credit systems are an upgraded version of credit rating scores provided by traditional credit rating agencies; these companies look at customers’ social behaviour as well as their financial activity. The advantages of the traditional credit rating approach are still present in the social credit systems. The addition of the social element to the algorithm generating the credit score has its own merits, some of which may be vital to a community like China.
The social credit system gives incentives to citizens to be upstanding citizens. China has a 1.4-billion-strong population, [2] and law enforcement may not be strict, especially in some rural areas. A recurring problem in the Chinese legal system is people not paying their court fines. The gigantic population makes tracking every person who has outstanding court fines an enormous effort that does not guarantee cost-effectiveness. This is where Sesame Credit comes in. China’s supreme court shares a “blacklist” of people who haven’t paid court fines with Sesame Credit, and they deduct users’ scores until they pay their debt. Furthermore, bad behaviour (e.g. forging board passes, stealing suitcases, disrupting or blocking check-in counters or airport corridors, and cheating in video games) results in social credit scores penalties. In addition, it is also an alternative and arguably more practical way of evaluating an individual or a company’s credit risk, especially when reviewing loan applications. In China, many citizens do not own houses, cars or credit cards, so these types of financial information are not available to measure. The central bank has financial data from 800 million people, but only 320 million have a traditional credit history. [3] The private social credit systems perform its function of evaluating credit risk and predicting ability to pay back the debt and the likelihood of default perhaps better than its traditional counterpart in this respect.
HARMFUL IMPLICATIONS FOR CITIZENS’ RIGHTS
However, social credit systems are controversial exactly because they include social behaviour in calculating credit scores. Credit systems usually use algorithms to calculate individual scores, by feeding in a lot of data and utilizing artificial intelligence technology. Social credit systems obtain their data through various sources, and often these sources are not transparent. The general public does not know what information companies track and utilize to analyse behaviour. It could lead to an over-intrusion into citizens’ private life. More specifically, citizens’ right to online privacy is infringed by the usage of these applications. For example, Sesame Credit describes the way their social credit system calculates scores as a “complex algorithm”, and they refuse to disclose how exactly their scores were calculated. The kind of personal data companies collect on citizens still remains unknown. The Sesame Credit spokeswomen claimed that Sesame Credit tracks “financial and consumption activities of our users, and materials published on social media platforms do not affect our users’ personal Sesame Credit score”. Despite the companies’ promise that they do not track social media behaviour, the sources they could track, and are tracking, are still shocking. The company claimed that they judge the types of product their customers buy online, with Sesame’s technology director telling the press that someone playing video games for 10 hours a day would be considered an idle person, and someone frequently buying diapers would be considered as probably a parent, and on the balance of probabilities, more likely to have a sense of responsibility. [4] The fact that private social credit rating companies are tracking online shopping history and using this information to determine one’s personality is horrifying and intrusive. It could even be said that these private social credit rating agencies opened Pandora’s box. If one’s consumption pattern would affect their ability to take out a loan, what is the next social behaviour being fed into the algorithm? The possibilities are unimaginable, and they may be already happening. This is a huge violation of the right to online privacy. It also infringes the right not to be subject to a decision based solely on automated means (a right provided for in the General Data Protection Regulation but only applies in the EU).
EVALUATION
Such an expansion of credit rating from purely financial activities to social behaviour and footprints may be desirable especially because of China’s unique demographic. It is meritorious in deterring people from bad behaviours and encouraging good behaviours amongst citizens. Yet, too big of an expansion might lead to an intrusion into online privacy and citizens’ private life, violating citizens’ basic rights as well as digital rights, and might ultimately resemble a Black Mirror episode – where everyone lives their private social life under the shadow of their social credit. A delicate balance needs to be reached concerning the extent of expansion so that its benefits could be reaped and its intrusion and infringement of rights minimized.
SCOPE OF DATA CORPORATIONS HAVE ON CITIZENS
The rise of these social credit system is perhaps of no surprise to the Chinese citizens. The dominion of giant corporations like Alibaba and Tencent pretty much renders online privacy a long-lost myth to Chinese citizens. People in China feel like there are no privacy and information security. One of the most telling tales is WeChat chat histories with Tencent. Tencent is the single most popular communication application in China. Tencent claimed in an official statement that the company did not store the chat history of users and that they would never use chat history for big data analytics. [5] However, the reality tells otherwise. WeChat users had been arrested because of what they’ve said on WeChat, conversations have been cited as evidence in court proceedings, and activists alleged they were followed based on WeChat messages. Moreover, too many aspects of a citizen’s life are accessible by these giant companies. For example, some of Alibaba’s services include digital payment systems, entertainment services and search engines. Tencent’s services include e-commerce, messaging applications, digital payment systems, games, television and even microblogging. The data these companies store is overwhelming and might be feeding it into an algorithm to determine social credit ratings. Aside from it being an enormous violation to online data privacy and digital rights concerning profiling and automated decision making, the implications, more specifically what corporations could be capable of wielding from the huge amount of data in their hands, are endless.
CONCLUSION
To conclude, the emergence of
private social credit rating corporations has its merits in deterring bad
behaviour, encouraging good conduct from citizens and gauging credit risk of
citizens in China. Nonetheless, a delicate balance should be struck as to the
extent of social behaviour and data utilized in the calculation process, in
order to avoid repercussions, protect citizens’ rights, especially rights to
private life and rights to online privacy, and reap the benefits at the same
time. If not, the dystopian world Western media is so concerned about might
just be analogous to reality.
[1] https://www.nytimes.com/2018/01/04/business/china-alibaba-privacy.html; see also https://www.wired.co.uk/article/china-social-credit
[2] http://www.worldometers.info/world-population/china-population/
[3] https://www.bbc.co.uk/news/world-asia-china-34592186
[4] Ibid.
[5] https://www.nytimes.com/2018/01/04/business/china-alibaba-privacy.html
