Opportunities for APEC To Build Trust in the Digital Economy

Global trade is dependent on trust. Exchanges between people inherently involve uncertainty, vulnerability, and dependence. For example, when a buyer and seller engage in a transaction, much can go wrong. The goods may be defective, the payment may be fraudulent, and neither party may be who they say they are. Therefore, trust is essential to facilitate successful exchanges, and economies have developed various safeguards, such as banks, law enforcement, and consumer protection laws, to facilitate trust.

On the Internet, the problem of trust is amplified because of many factors. Distance and anonymity have replaced face-to-face interactions, which makes it harder to establish trust. Globalization means that not every jurisdiction may have the same, or sufficient, safeguards. Decentralization means trusted intermediaries do not always exist who can reliably tell others who they can trust. Finally, the size of the network-billions of Internet users interacting with one another-requires trust not just between a few institutions and their users (one-to-many), but a web of trust between peers (many-to-many).

One of the earliest success stories for building trust on the Internet was the padlock icon that appeared in the address bar of web browsers. First introduced in the 1990s by Netscape, it soon became an industry norm to indicate when a website uses encryption to securely communicate over the Internet. This trust signal was crucial to the early days of e-commerce because it gave consumers valuable information about whether a website was secure before they submitted sensitive information, such as payment information. While some browsers still have this icon, Google recently retired the icon from the Chrome browser. Websites using secure connections are the norm today, not the exception, and now the browser indicates when a website is not using a secure connection. Moreover, replacing this icon helps avoid confusion for consumers who might otherwise believe a secure connection means the website itself is safe when the truth is that even malicious websites loaded with malware or masquerading as legitimate sites can use secure connections.

As the digital economy continues to evolve, factors such as increasing cybersecurity threats, a rise in inscrutable algorithmic systems, and a growing volume of misinformation, make improving trust an even more crucial priority. Sometimes the private sector is leading necessary changes. For example, Meta and Apple have made end-to-end encryption a bedrock of their digital messaging platforms to protect against surveillance, and platforms like Uber and Airbnb leverage user ratings so strangers can interact safely. But the private sector cannot solve trust on its own, nor can any individual economy.

One of the Asia-Pacific Economic Cooperation's (APEC) core strengths is its ability to have diverse stakeholders come together to create voluntary, principles-based agreements to strengthen economic trade. Therefore, APEC economies should turn their attention to building socio-technical solutions-technical measures designed with careful attention to underlying social dynamics and human processes, like the padlock icon in web browsers-that will improve trust in the digital environment, including in emerging technologies like artificial intelligence (AI) and on existing e-commerce and social media platforms.

Consider some of the following opportunities:

• Creating Digital IDs: Creating secure, interoperable digital identity systems would allow individuals to securely prove their identity, or aspects of their identity (such as age, employer, or nationality), using only their phone. Widespread access to digital IDs would allow users to more easily purchase age-restricted products online, securely sign legal documents digitally, and execute contracts online. Some APEC economies have national digital IDs, or plans to create them, but few are interoperable, although some countries are working to address this problem. For example, Singapore, Brunei, Thailand, and the Philippines are developing interoperable digital IDs to work throughout the ASEAN region and pursuing policies of mutual recognition.
• Improving Content Provenance: With the rise of generative AI, some people are concerned that bad actors will flood digital platforms with misinformation and disinformation. It is not possible to eradicate all fake content, but it is possible to change the environment in which users consume information. Instead of trying to add watermarks that help people understand what is AI-generated, a better approach is to add trust signals that help people understand the origin and history of content. For example, the Content Authenticity Initiative has established a protocol for adding cryptographically secure metadata to content that allows users to see the entire lifecycle of content, such as when a photographer captured an image and when a news agency published it.
• Combating Fake Reviews: Online reviews are an important trust signal, but many businesses manipulate reviews, such as by creating false positive reviews about themselves or false negative reviews about competitors. The Federal Trade Commission in the United States just released new rules banning fake reviews, including prohibitions on buying or selling fake reviews, creating incentives for fake reviews, and insiders from posting reviews without disclosing their relationship. Creating better laws and safeguards around online reviews, including technical solutions to identify bots, would make these reviews more trustworthy.
• Stopping Counterfeits: Counterfeit goods can undermine markets and harm consumers. Bad actors leverage e-commerce to distribute counterfeit goods. In the United States, DHS has worked with third-party marketplaces, carriers, shippers, payment processors, and search engines to identify best practices to stop the spread of counterfeits, including by creating terms of service that penalize offenders for violations (including account suspensions), vetting third-party sellers, limiting high-risk products, and establishing efficient notice-and-takedown procedures. But they have also started working together to create a data-sharing platform to share information between e-commerce platforms and law enforcement agencies to pursue bad actors across multiple platforms.
• Building Data Sharing Models: Data is a key driver of economic growth in the digital economy, but one of the biggest challenges is ensuring that those who can use data productively have access to it. To facilitate access to high-quality, trustworthy data, economies should explore common data-sharing models including data consortia (where organizations pool their data together), data trusts (where entities delegate their data rights to an independent intermediary), and data cooperatives (where entities negotiate collectively for access to their data).
• Testing AI Models: As developers integrate AI models into an increasing number of applications, one of the key questions will be the extent to which developers have tested these models. Just as APEC successfully created the Cross-Border Privacy Rules (CBPR) as a global alternative to the EU's General Data Protection Regulation (GDPR) for privacy, APEC should now create a voluntary, interoperable, risk-based framework for AI model testing, evaluation, validation, and verification based on common principles.

Many economies instinctively turn to more regulation to increase trust, but often new regulations are neither necessary nor helpful. By pursuing a range of voluntary socio-technical solutions to enhance trust that works across borders, APEC has an opportunity to significantly enhance the safety and security of the digital economy and unlock new opportunities for economic growth and development.