About China’s Social Credit Score System

As if it was modelled on dystopian fiction, China is trying to build a society built on user ratings with a “social score” at its core and it’s looking more and more like Orwell’s magnum opus.

And the western world might be following suit closer than we think if we don’t fight for our right to own our personal data.

It was a sunny day of June in Paris and I was listening to a radio show that I’d been listening for almost 20 years.

Besides being the oldest radio show still in existence in Europe, “Le Masque et la Plume” (literally “the Mask and the Dip pen”, a 63-year-old show this October) is also known for the way its columnists can fight tooth and nail over a book, a play or a film.

Though I’d usually enjoy listening to the row, thinking it was so inconsequential, this time was a bit different. It was about the new French translation of George Orwell’s 1984.

Amongst a sea of changes, there was a stark one: though Orwell wrote this seminal book in the past, this new translation was written in the present tense.

As others, I was shocked by this. It was going a step too far, it was messing the original masterpiece of George Orwell I thought. But then, as a columnist of the radio show made a case for this new translation, it hit me.

Of course, it was told in the present, with the consent of arguably the biggest publisher in France, Gallimard.

It is written in the present because it is almost our present.

Certainly, it seems to be for Chinese citizens, that are now rated for almost every action they do, good or bad, and get publicly shamed for bad deeds and even banned out of some services in case of score too low.

The invisible hand of Chinese authoritarianism

In 2014, the Chinese party set out a plan, to be implemented by 2020.

With a simple goal: to have a record of every Chinese citizen with its associated data from public and private sources, encompassing almost everything from name and date of birth to biometric information and your shopping habits.

That system would track the reputation of every individual, through the various actions they do.

That tracking would lead to a number, that would allow or ban you from taking the train or an airplane, and even how much you pay for certain things like a bike rental, or if you’re eligible for financial services like credit.

The aim for the Chinese government is to influence the behaviour of its population towards what the party considers to be beneficial to society.

Though the formula is obviously a state secret, various behaviours are openly targeted such as bad driving, smoking in non-smoking zones, posting too much on social media, sharing what is deemed “fake news” or even playing too much video games.

Though an extreme take on the concept by the Chinese government this policy is not actually new nor originated from China. At the base of China’s efforts are what is referred to as the “Nudge Theory”.

It’s netted US economist Richard Thaler a Nobel prize in 2017, for his works in behavioural economics and more specifically how to nudge people, leading them subtly towards a particular course of actions.

The problem is that China applies the ‘nudge’ theory on a totally unprecedented level.

And if having ratings for every individual seems familiar to you, it’s probably that you’ve seen Black Mirror, a TV science fiction anthology that deals with the inconsiderate ways that we use modern technology.

In an episode entitled “Nosedive”, it is common practice for the average citizen to rate every social interaction they have, with deep consequences on their socioeconomic status.

In one scene, the main character can’t board a flight because her rating has been dropped after an argument with her brother and is escorted out of the airport when she starts to lash out at the flight attendant at the gate.

In another, the main character talks with a woman who stopped caring about ratings after her husband was denied lifesaving medicine and died from a cancer, because his rating was not high enough.

Even for China, this second situation might still be some ways off. But the system, which has been launched on a national scale on May 1st has reportedly blocked people from taking over than 11 million flights and 4 million train trips.

Compounding this, China operating the largest network of surveillance cameras in the world, has started to shame publicly people on massive screens in the streets. Whether it’s for jaywalking or crossing when traffic lights are red.

The facial recognition software used with the cameras is said to have led to more than 3,000 arrests according to Face++, the company behind the software.

This company like many others in China pride themselves in working with the government. That’s because the government is never far away in Chinese economy with several executives in the Chinese government in major investment funds or having members of their families in them.

It’s also good business since the government is very likely to be your biggest customer in the years to come. This is all the more evident about the creation of a national social credit score system.

Institutionalized surveillance with the help of the not-so-private sector

While the Chinese government was conducting a large-scale experiment of its social credit system in Shanghai in 2017, giants of the private sector had also been running their own private score systems, based on the browsing, shopping history of their consumers for several years.

And it’s hard not to notice the odd resemblance between the two, very opaque systems. It’s probably because China’s private sector, is never exactly private. Especially when it comes to the new Chinese giants such as Tencent or Alibaba.

Alipay is a gigantic Chinese mobile payment platform that you may have never heard about. It overtook PayPal as the leading mobile payment platform in 2013, centuries ago in the Internet age.

Yet, Alipay is only the finance arm of the much larger, Alibaba, that broke the $500 billion market cap in January 2018, meaning its valuation is about the same as Facebook and bigger than banks such as Bank of America, JPMorgan Chase or oil giant Exxon.

The relation between Alibaba and the Chinese government? Founder and CEO of Alibaba, Ma Yun -know more widely as Jack Ma-, has been clear about the benefits of the Chinese single party model.

Comparing China with the US he sees this as its biggest advantage “China’s political stability, there’s no other country in the entire world with this type of environment.”

The relationship between Ma and the Chinese establishment goes both ways. Ma repeatedly supported the vision of President Xi on various subjects like its Internet policing strategy.

The Chinese establishment seemed to be a major party to Alibaba’s 2014 IPO in the US.

According to a New York Times report, Alibaba exclusively sold shares to four Chinese firms that are helmed by family members of executives of the Politburo Standing Committee, a key institution in the Chinese government.

The expertise that Alibaba (and Chinese rival Tencent) had acquired in algorithms was the starting for their own private credit score, such as Ant Financial for Alipay.

This expertise is thanks to the gigantic amount of data that Alibaba or Tencent can get on the Chinese population, where the very notion of “privacy” doesn’t exist.

Their main sources of data are Alipay and WeChat, “super apps” that acts as portals encompassing almost everything you could want.

You want food delivery? get it within the app, there’s an Alipay/WeChat service for that. Pay your parking? You can also do that, provided you add your driver license, license plate and engine number of your car. Book a doctor’s appointment, pay your holidays, your electricity and gas bill? You can do all that and more, within a single app.

If the flow of data that Google, Facebook and other western Internet giants is akin to a small river, then in comparison, the flow coming to Alibaba and Tencent datacentres is the Amazon flowing through the tropical jungle of Brazil.

The thing is, to get all those services, you must get an Alipay ID (or the equivalent for WeChat) and can only get one after entering both your phone number, bank account number, city of residence, and scanned your national ID card.

From its own press releases in 2015, Alibaba (and probably Tencent also in the case of WeChat as they are subject to the same rules and regulations) has been working with the government to share data on a “blacklist” of about 6 million people that have unpaid court fines.

It’s then a bit naive to think that all this work and connections would not feed into each other, something alluded to in a 2016 report from the Financial Times that humorously advised to

“avoid logging on between 2am and 4am, steer clear of websites offering quick loans and beware of changing your mobile phone handset too often. A good rule of thumb is to order curtains for your office, and when shopping online, choose scuba gear over photographic equipment.”

But, surely, we’re not doing this bad, are we?

There’s the short, immediate answer: obviously, no.

And one could argue there’s even encouraging signs in the EU, with the enactment of the GDPR and other texts on the horizon such as ePrivacy -if they’re not gutted by lobbies that is- but for all those positive signs there’s also some nightmarish scenarios just waiting to happen.

Surveillance in China is mainly political, whether it’s done by the government or the private sector, the end goal is always to monitor better the population. Ensure “harmony” across society as Chinese officials would put it.

In Europe and in the West in general, the danger is not so much coming from the political side than it is auctioning any privacy for profit to the highest bidder.

Though the argument could be made that with several countries such as Poland, Hungary or more recently Italy and Brazil on the cusp of fascism, the danger could -also- be political surveillance.

But for the moment, the closest equivalent to the Chinese social credit is private credit score systems which exists in various forms around the world.

In the US for instance, the election of Trump signalled a new era of concentration and general abuse from large companies that can litigate their way out of troubles for years, if not decades.

While there is no plan for a national credit score system, there’s already plenty in the way of local private initiatives coming from banks, insurers and other players at state-level.

And as a matter of fact, this private score system is messed up on its own, as shown a couple years ago by John Oliver on its show “Last Week Tonight”.

According to an FTC report cited “One in four (credit reports) had an error and one in 20 were seriously wrong,”. And this can have life-altering consequences for people who have an error in their file.

Indeed, the problem lies with the fact that “seriously wrong” in this case means that the person has been mistaken to be a terrorist, a sex offender or simply dead.

Which can all lead to refusal for a job application, housing or a new insurance policy.

And 1 in 20 in the case of the US means 10 million people, corresponding to the entire population of Sweden, Oliver says.

In the EU, third party credit report is much more regulated, but the hunt for personal data has pushed companies to innovate and create new products that are sometimes surprisingly invasive, with no or few pushbacks from public regulators.

One such case is the “youdrive” product commercialized in France by a brand of the French insurance giant Axa. In exchange for installing and running an app that records massive amounts of data about the way you drive, you can have a discount on your insurance.

Though this has been approved by the French data protection commissioner the CNIL, there has been criticism about this new model, both in France and in the EU.

The Irish data protection authority for example indicated that the products of insurers, targeted towards young drivers could pose a problem regarding privacy. Some devices can speed, location, and other data points that make for an “extremely detailed personal profile” according the authority.

The next step is then health insurance, with products already on the market in the US, by various insurance companies like Discovery or John Hancock Insurance. If you agree to

The problem is always the same, with companies pretending it’s a fair deal with each party getting more out of the contract.

The truth is, you might be paying way more even after getting a discount if you’re giving away your personal data.

There’s also the issue of cybersecurity.

In September 2017 for instance, Axa Insurance saw a massive data breach in Singapore that hit more 5,400 people and saw their name, date of birth, mobile phone number leaked.

Finally, a time where conservatism and nationalisms seem to dominate the world stage, Europe could choose to lead by example.

The European Union and its members have the opportunity to defend high moral values.

This could be a defining moment, like the one more than half a century when Nations came together to create the EU in order to establish peace on the European continent.

In law, privacy is already enshrined in the Universal Declaration of Human Rights via the Article 12 as well as in the European Convention of Human Rights (Article 8) and the European Charter of Fundamental Rights (Article 7).

Maybe it is time to enshrine personal data in our constitutions as well and actually enforce laws and regulations. We need to give a chance to individuals to defend themselves against giant companies and governments.

The battle for data as a human right could be one of the major civil rights movement of this century, so let’s make sure we don’t lose it.