Philip Ellis
News & Views
Asian entrepreneurs face an uphill struggle

Just a few weeks ago we pondered the possibility of a booming start-up scene in Hong Kong, thanks to evolving investment platforms and a new generation of young entrepreneurs less culturally bound by tradition and aversion to risk. However, that bright future is still a way off, according to new insight from The Economist’s Intelligence Unit, which has highlighted a number of legal roadblocks in Asia-Pac that could prove problematic.

The study, entitled ‘Good To Grow? The Environment For Asia’s Internet Businesses’ comprises data from interviews with over thirty entrepreneurs in the region, and offers up a laundry list of obstacles, the greatest being intermediary liability, the regulation that makes content creators accountable for any illegal activity undertaken by third parties using their product.

The most extreme cases of intermediary liability have led to incarceration; Chiranuch Premchaipoen was sentenced to jail time after making comments (on her own website, Prachatai) that were interpreted as offensive to Thailand’s royal family, and threatening to national security. The case was precedent-setting for webmasters in Thailand, and Chiranuch herself has been quoted as saying that it “will further encourage self-censorship among online publishers in the country.”

Legislation relating to IT is something of a minefield; poorly or ambiguously worded laws can result in exorbitant administrative costs and unclear guidelines for best practice – developers in India find themselves liable for content posted by third parties despite widespread uncertainty as to exactly what they are personally responsible for.

South Korea’s Shutdown Law also provides something of a catch-22 for gaming companies. While they are required by law to verify the age of their users via ID cards, other legislation forbids websites from collecting personal and confidential information, such as that found on ID cards.

While Asia accounts for nearly half of global internet use, The Economist Intelligence Unit’s report states that “legislation cannot hope to keep up with the rapid pace of innovation and the emergence of disruptive online business models”. According to many new technology start-ups in Asia, “[governments do not] grasp the economic importance of the Internet and the role that regulation can play in either enabling or hobbling it.”

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