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Identity checking threatens digital economy

| News | Litigation

Vicente Moret and José Miguel Soriano analyse the reasons why digital disruption has become one of the biggest changes

Identity is a personal and inseparable attribute of each human being. It is essential because it allows us to know who we are, and that the acts we perform with respect to others generate trust or enable control and responsibility in their case. In the field of law, the identity of the person who performs the acts allows legal relations to be born and natural or legal persons to become the centre of attribution of rights and obligations. In short, our legal-political systems are based on the identity of the subjects that the States have been verifying through different documentary forms over time.

The Internet was born without concern for attaching the identity of those who act on the network, and perhaps this is one of the many reasons why digital disruption has become one of the greatest civilisational changes that humanity has experienced. In this new digital context, truth, anonymity, and technology constitute three vectors on which the problems converge. Anonymity on the net is, in fact, part of the very central principles of the configuration of the Internet.

Nevertheless, the verification of the identity of subjects in the digital context has become a matter of crucial importance. On the one hand, verification of identity is essential to the national security of the States since it makes it possible to attribute and respond effectively to threats. On the other hand, identity verification is becoming a necessary matter for preserving development and growth in the coming years of the digital economy, especially regarding trade and the provision of services on the network. According to UN data, by 2021 e-commerce will already account for 15% of total retail trade.

However, these bright prospects for growth and economic transformation are threatened by the also exponential growth of 'online' fraud in the form of scams. According to McAfee estimates, the global cost of online crime in 2018 reached $600 billion, or 0.8 percent of global GDP. According to Accenture, in the period 2019 to 2023 the total global value at risk from cyber-attacks will be $5.2 trillion in direct and indirect costs. According to the Report of the Attorney General's Office, in 2018, 5,581 legal proceedings were initiated for online fraud in its most diverse manifestations, which represented 61.5% of the total proceedings initiated in 2018 for cybercrimes, increasing by 50% with respect to 2017.

The emergence of new criminal behaviour, which were unpredictable a few years ago and therefore unregulated in our legal systems, very seriously damage legal assets in need of protection and are difficult to prosecute due to the ubiquity of the network and the diversity of national jurisdictions.

The main difficulty in most cases lies in the impossibility of verifying the identity of the criminals behind these scams. The losses generated by these crimes on the Internet are enormous and it can even be deduced that the data published are not the real ones due to the reluctance of companies to report them because of the cost to their reputation, and of citizens, when it comes to small-scale scams.

Therefore, the accreditation of identity becomes a crucial issue in order to preserve trust in the system. In this respect, the solutions to this serious problem must come, on the one hand, from action by States to protect citizens' rights. It is essential to achieve greater effectiveness in the prosecution of these crimes, which will only be achieved when the material and human resources allocated to this function are increased.

It is also necessary to strengthen the mechanisms of international cooperation in this area, and above all the State must demand by means of normative regulation a standardization in terms of the identity verification systems used by the companies that develop their activity in the context of the digital economy. The eIDAS Regulation has laid the foundations for European regulation of digital identification, but it should be required by law that the first step in establishing any relationship of economic or legal content within the framework of the services of the information society is to ensure the identity of the subjects that intervene in it through systems that meet standards set by law and that are certified.

To this end, technology, which is in part the indispensable tool that makes the proliferation of crime on the Internet possible, is called upon to play a decisive role in combating it. Developments based on artificial intelligence are decisive in achieving an adequate level of security in the verification of identity, a task in which research centers, universities or companies, in some cases Spanish ones such as FoxId, are already involved. These developments make it possible to comply with the obligation to take all possible measures to prevent 'online' fraud, ensuring effective verification of the true identity of the person on the other side of the screen.

In short, the verification of identity is necessary in all those human actions that in society can have legal effects, and the veracity of that identification has important economic, legal, social, and political consequences. In short, it is a question of making it more difficult for all of us to make things worse for those who use the Internet to commit crimes with impunity.

You can read the article in El Confidencial

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