Big Tech States and Anarchist Neutrality

Last week I gave a seminar on taking literally the idea that some Big Tech companies can be considered non-territorial states, drawing on ideas I blogged back in November.

One key feature of these companies is that they are supra-jurisdictional: they can choose which jurisdiction to be registered in for the various different purposes of registration. One of those purposes is public trading of stocks and my talk followed hot on the heels of Telegram announcing that they were considering an IPO on the New York Stock Exchange. This led to serious discussions in the serious financial media about Telegram's tolerance for illegal activity on its platform, such as trading in prohibited or restricted goods (i.e. drugs and guns) and how the platform would have to 'clean up its act' if it was to go ahead with the IPO.

A few days later the owner of Telegram, Pavel Durov, announced he had raised $330m through issuing bonds. This crystallised my point: it is easy for these companies to avoid the regulation concomitant on a stock market listing by raising money through private equity.

This made me think a little more about the character of Telegram as an organisation and its behaviour in the supra-jurisdictional space. Its main rivals - Meta, Alphabet, Apple, Tencent, ByteDance, Microsoft - each choose to be associated with either the USA or China and to claim to be subject to those regulatory frameworks (though all cheat as much as they can get away with). In my seminar I suggested we should actually understand these as closer to international treaties between sovereign states rather than a state regulating a subaltern company, but let's set that aside for now and focus on how different Telegram is:

Telegram is registered as a company in the British Virgin Islands and as an LLC in Dubai. It does not disclose where it rents offices or which legal entities it uses to rent them, citing the need to "shelter the team from unnecessary influence" and protect users from governmental data requests. After Pavel left Russia in 2014, he was said to be moving from country to country with a small group of computer programmers consisting of 15 core members. While a former employee of VK claimed that Telegram had employees in Saint Petersburg, Pavel said the Telegram team made Berlin, Germany, its headquarters in 2014, but failed to obtain German residence permits for everyone on the team and moved to other jurisdictions in early 2015. Since 2017, the company has been based in Dubai. It has a complex corporate structure of shell companies to delay complying with government subpoenas.¹

This is a clear attempt to avoid any significant regulation. When you combine this with the tolerance of illegal activity on the platform, such behaviour gives Telegram the reputation of being 'as close to being a criminal enterprise without people going to jail' (I quote a senior tech exec).

I think there is a better understanding of Telegram. The organisation is anarchist in the true philosophical sense of no laws ever have moral authority. There are never moral reasons to obey a law, only ever prudential ones. (Though of course there can be moral reasons to do some particular act and by doing it one is as a matter of fact obeying the law.)²

Telegram is built to help its users resist state³ power, should they so choose. In some cases, where that state is obviously repressive, we may support that approach. But in others, where the state is a 'liberal democracy', we may think it enables criminality. However, those attitudes presuppose a willingness, and justification, to distinguish between good and bad laws, or good and bad lawmakers. Telegram refuses to do that: it is the most extreme 'neutral state', more neutral than Switzerland, perhaps the Libertalia of digital states.

One example of this refusal to ally with any territorial state is the attitude to data requests by such states:

To protect the data that is not covered by end-to-end encryption, Telegram uses a distributed infrastructure. Cloud chat data is stored in multiple data centers around the globe that are controlled by different legal entities spread across different jurisdictions. The relevant decryption keys are split into parts and are never kept in the same place as the data they protect. As a result, several court orders from different jurisdictions are required to force us to give up any data.
Thanks to this structure, we can ensure that no single government or block of like-minded countries can intrude on people's privacy and freedom of expression. Telegram can be forced to give up data only if an issue is grave and universal enough to pass the scrutiny of several different legal systems around the world.
To this day, we have disclosed 0 bytes of user data to third parties, including governments.⁴

It is easy to see why the deliberate and public attempt to avoid regulation by any territorial state can be mistaken for criminality, but it should rather be understood as a refusal to join the network global treaties and alliances which encourages the US Congress to think of Meta and Alphabet and Microsoft as 'American companies' in contrast to Tencent and ByteDance being 'Chinese companies'. This language of jurisdiction in fact describes subtle diplomatic alliances. To refuse to ally oneself with the USA or the EU or Russia or China does not make a state - territorial or digital - criminal but neutral.

There are other social media companies which attempt to achieve neutrality with respect to those big 'superpower' alliances, such as Viber and Line and JOSH, but in all those cases they achieve this by aligning to regulatory frameworks of territorial states outside the alliance. Telegram goes one step further in the true spirit of anarchism.⁵