Government-led internet shutdowns cost the global economy $8 billion in 2019, research says

0
425

Deliberate internet shutdowns cost the global economy more than $8 billion last year, according to a new report.

Research published Tuesday by internet research firm Top10VPN analyzed the economic impact of internet shutdowns around the world throughout 2019. The cost of internet blackouts were calculated on Netblocks’ and the Internet Society’s cost of shutdown tool, which uses indicators from the World Bank, International Telecommunication Union, Eurostat and U.S. Census Bureau.

An internet shutdown is an intentional disruption of the internet or digital communications, which makes those services inaccessible by a specific population. Campaign group Access Now says shutdowns are often carried out by governments or authorities “to exert control over the flow of information.”

Top10VPN traced 18,225 hours of internet shutdowns around the world in 2019, which carried a total economic cost of $8.05 billion.

Researchers noted that there were more shutdowns in 2019 than ever before, with the total cost surging 235% from 2016.

Last year saw 122 major incidents — meaning there were 122 national or region-wide blackouts — as well as more than 90 smaller blackouts in India and partial restrictions elsewhere.

The analysis found that shutdowns most often occurred in response to protests or civil unrest as “authoritarian regimes looked to restrict the flow of information and maintain their grip on power.”

In terms of individual regions, the Middle East and North Africa took the biggest economic hit from internet shutdowns in 2019, with costs exceeding $3 billion.

Sub-Saharan Africa followed suit, with costs of almost $2.2 billion, while Asia — the region with the most documented shutdown hours at 9,677 — had a blackout cost of $1.7 billion.

Iraq was the country with the highest total shutdown cost, with the country’s economy reportedly losing $2.3 billion through internet blackouts in 2019. According to the research, Iraq suffered 263 hours of deliberate connectivity disruptions last year, impacting almost 19 million internet users.

Network data from Netblocks in November showed that the Iraqi government severely restricted web access amid protests in the country.

Sudan had the second highest costs at $1.8 billion.

India was the third worst-hit economy, with Top10VPN tracking more than 100 “highly targeted” shutdowns in the country last year.

Those blackouts included a shutdown in the Kashmir region, which has been ongoing since August when the Indian government revoked a special status granting the state of Jammu and Kashmir autonomy over its own laws. The report noted there was “no end to restrictions in sight” for the region.

Researchers estimated a total loss of $1.3 billion for India as a result of internet shutdowns, but said they expected the actual figure to be even higher.

Iran suffered an internet blackout spanning several days in November, with the government restricting citizens’ access to the web amid widespread protests over fuel price hikes.

Speaking to CNBC via email, Samuel Woodhams, one of the report’s authors, explained that there were several ways in which internet shutdowns led to economic losses.

“From communicating with suppliers to engaging with new and existing customers, internet shutdowns negatively impact almost every aspect of a business’s operations,” he said.

Woodhams added that the “informal economy” was also hampered by blackouts, as digital transactions and the flow of capital enabled by social media platforms was brought to a halt, noting that frequent shutdowns also undermined investor confidence.

“Internet shutdowns (also) negatively impact businesses located outside of the affected country by preventing international companies from interacting with their business partners and potential customers,” he told CNBC.

Despite the negative economic impact, Woodhams did not expect to see a decline in the number of deliberate blackouts this year.

“Authoritarian-leaning regimes appear intent on flouting human rights and disregarding economic costs in the vain attempt of controlling the flow of information during periods of unrest and protest,” he said. “With that in mind, it is likely that internet shutdowns will continue to rise in frequency in 2020.”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.