INTERNATIONAL EQUITY IN THE QUANTUM AGE

I. Introduction

The gap between the nations have always been existed, however, particularly, the “second quantum revolution”[1] may create a scenario in which bridging the gap might be impossible. This article explores the implications of quantum technologies on the welfare of nations and focuses on the role of antitrust law to ensure that the merits of this technology are distributed equitably.

After an introduction on the welfare effects of different policy reactions to technological and societal developments (II.), the present article delves into the “quantum revolution” (III.), giving an overview on the new technologies based on quantum mechanics and its potential applications. This is followed by some antitrust law considerations (IV.) and an outlook (V.)

II. How Nations React to “Creative Destruction”

The roots of the current gap between the nations can be found in the governmental and societal reactions towards “creative destruction[2]” which end the status quo and establish a radically different order. According to Acemoglu and Robinson, during the “creative destruction” process (which started with the Renaissance and Reformation and peaked with the Industrial Revolution) today’s more “developed” countries, gained a huge momentum in the development of science technology and commerce[3]. They were able to do so because they transformed their legal and economic institutions in a more inclusive and widely distributed manner[4]. The distribution of both economic and political power, consequently, created a virtuous cycle: more people could participate in the economy and this increase provided a more enterprising and competitive environment which in return created even more inclusive markets[5].

On the other hand, not all nations were welcoming this transformation wave as the individuals or groups that were governing them were aiming to maintain their status quo to preserve their power.[6] Therefore, this transformative wave became something to fight against for some authorities and they did so as long as they could. As a result, their legal and economic structures were outdistanced by those willing to adapt to the change.

Consequently, some nations found themselves in a position that is known as the “Red Queen Effect[7]”: although they were moving faster and faster, they were staying at the same place. Today, according to UNCTAD 2019 Digital Economy Report, the world is not only divided as rich and poor but also as “hyper-digitalized” and “under-connected” and this yawning gap is deeper due to the current transformational wave that is even bigger and faster than the previous ones. As rightfully stated in the UNCTAD 2021 Technology and Innovation Report, this time, “developing countries … cannot afford to miss this new wave of technological change.”

III. The Quantum Revolution

In such an atmosphere, we are urgently in need of a regulatory policy before today’s “creative destruction” process reaches its peak with the “second quantum revolution.” In order to provide a better understanding for this epoch-changing technology and assess the legal issues more accurately, we will very briefly explain some unique features of quantum mechanics.

1. Introducing the Quantum Mechanics

The quantum revolution indicates the invention and combination of technologies developed with the unique mechanics of the quantum universe. Quantum mechanics is a branch of physics but has rules and principles that fundamentally conflict with the laws of the classical physics. Classical physical laws are applied at the “macroscopic level” of the observable nature, whereas the quantum mechanics are only applied to subatomic objects that exist in the quantum realm. In the quantum realm, subatomic objects behave very unusual and even “counterintuitive” because of very unique features of quantum mechanics. Particularly, some of these features are very heavily used in the development of quantum technologies

2.  Superposition

Classical physics rely on binary probabilities: true or false, on or off etc. Accordingly, in the classical computing, there are only two states for a bit (binary digit): a 1 or a 0. Everything that is expressed via computers is the combination of a substantial amount of 0s and 1s and all information is both processed and stored via bits on this binary mechanism. For a quantum computer, however, there is another state called superposition. According to this phenomenon a quantum object can be found in two distinct states concurrently until it is measured or observed. When this unique feature is applied to a quantum computer, a qubit (quantum binary digit) can be found in three different states: a 1, a 0 or both 1 and 0 concurrently. This feature has the potential to provide an immense speed for algorithmic calculations and storage capacity to quantum computers.

3. Uncertainty

Due to the particle- wave duality of quantum mechanics, a quantum object may be everywhere and in both states until it is measured.  According to the uncertainty principle, either velocity or location of a quantum object can be measured at a given time. Because when one measures either one of these properties, this very act of observation will intervene in the quantum state of the observed object and this will affect the accuracy of the observation. This principle is the fundamental mechanism for both quantum cryptograph and complex quantum algorithms.

4. Entanglement

This feature indicates the correlation and communication between two or more quantum subsystems that is instantaneous and hence faster than the speed of light. This correlation exists regardless of the distance between these subsystems and is non-visible. More strikingly, these entangled objects (or systems) communicate with each other within time, meaning that one object can send information to another (such as being observed) from the future[8]. In that sense, this feature will provide a huge advantage in speed because processing or operation implemented to an entangled pair will also affect the other simultaneously.

5. Disruptive Potential of Quantum Technologies

With the use of all these unique features, quantum computers and other quantum technologies outdistance all current computing systems including super-computers. Put differently, they are uninterchangable because quantum technologies are promising crucial features that cannot be substituted otherwise. It is difficult to predict all future applications of quantum technologies. Yet, the most relevant fields are: (i) quantum simulations[9]; (ii) optimization and augmented autonomous decision making mechanism with quantum AI; (iii) eternal privacy and data security by quantum cryptography and key distribution techniques[10]; (iv) quantum internet; (v) clean energy uses; and (vi) furthering the understanding of climate change and reversing its negative impacts.

Quantum technologies and their hybrid uses are leading a radical transformation. Against this background, companies and the countries in which they are located have to establish the “quantum supremacy” in order to benefit from the potential economic and political power deriving from it. However, monopolization and/or domination of this technology by a handful companies may threaten fundamental values and human rights, such as equality, equal access to opportunities, human dignity and other essential freedoms[11].

It is important to note that since these markets are on the global scale, any market failure will affect not solely one country but the entire world. According to UNCTAD 2021 Technology and Innovation Report, this power concentration may –depending on policies- widen the current gap between the nations and this may result in significant global problems such as “migration pressure[12].”

IV. Current and Future Issues: Antitrust Concerns

Unfortunately, this is exactly what is currently happening in the global quantum computer market. Although this is a market that should be kept global and open, according to McKinsey Quantum Technology Report 2021, currently technology giants dominate the market and they are taking advantage of the high entry barriers in order to maintain their dominant status. There are various entry barriers to the global quantum computer market, particularly in terms of developing the hardware. First, this technology requires enormous amount of data and financial capital; as well as an immense expertise and technical skills. Moreover, there are physical obstacles that make it extremely hard to build a quantum computer[13]. Most importantly, the market is surrounded with the patent and other IP-right protections as well as the trade secrets of technology giants. All in all, the “winner took it all” or is currently doing so.

This outcome is majorly due to the US antitrust policies[14] majorly influenced by the Chicago School approach and remote from today’s realities and incapable of addressing current market trends and, potentially, failures. Over the last three decades, legislative authorities of the US hesitated to intervene in the markets, as they feared that this would harm the dynamic and innovative structure of the technological ecosystem, as innovation and competition are -in their opinion- interdependent.

Moreover, technology’s ever-changing nature and the essential role that it plays in crucial sectors have increased this challenging situation from the regulatory perspective. It may be fair to say that the law may not evolve as fast as the technology and often times the former falls behind the latter. In this context, the US has very recently started taking regulatory actions[15] toward technology giants regarding their dominant positions in digital markets as well as their anticompetitive and/or unfair business practices such as “killer acquisitions.” Yet, these actions are taken almost a decade after hundreds of significant acquisitions were made and few technology companies transformed into technology giants who are dominating not only one but several markets.

Moreover, the scope of these regulations seems limited because of three reasons: First, these regulations are very industry specific and focus on solely current market failures and hence, when it comes to technology industry, their major focus is digital platform markets. Therefore, many emerging markets still lack sufficient regulations. Secondly, the last three decades have shown us that strict economic analysis of antitrust may not solve all market related problems, particularly the ones related to the social justice or public welfare. Yet, these regulations have not introduced new tools to assess the antitrust claims so far. Most importantly, however, the global quantum computing market requires an excellent technical skill and expertise not only to exist in the market but also to regulate it. Any level of information asymmetry would interrupt evaluating the nature of the technology and this would lead to false assessment of present and future market failures such as entry barriers, or intersection of intellectual property rights and antitrust claims. In short, this market requires a market-specific regulation considering not only economic aspects but also social and ethical ones.

V. Conclusion

One thing is for sure: things change. The inevitable cycle of life determines that in order to create something new, the old must fall apart. Nonetheless, we are capable of shaping this process and its outcomes; and that is something that should not be undermined. Of course, antitrust law is not a magical tool to eradicate all social and economic problems, yet it is a vital one to address many of them. Providing a more competitive and dynamic market structure is the first and the most important mission of the antitrust policies. So far, we have experienced that considering monopoly (or dominant position) as the outcome of the competition may sometimes lessen the competition itself and create a leverage effect for monopolies (or dominant actors) to expand and grow in various different markets. Apart from these, the technology at stake involves very unique features and mechanism and hence, requires genuine knowledge and expertise. In that manner, regulations toward the global quantum market should be industry-specific by considering the nature of the technology as well as assessing the potentials that it bears. Consequently, the policy approach should shift to a more equitable and inclusive one that aims to increase the welfare of all not few. By doing so, we can prevent these market failures to be transformed into social and ethical failures.

Keywords: law and technology, antitrust law, quantum computers.

[1]This term is coined by Dowling Jonathan P. and Milburn Gerard J in 2002 and according to the general view, the first quantum revolution happened in the 20^th century with the discovery of quantum mechanics and application of quantum mechanics in computing science and information technologies lead to the second quantum revolution. Also see, Ivan H. Deutsch, Harnessing the Power of the Second Quantum Revolution, PRX Quantum 1, 020101 (2020).

[2] This term was coined by Joseph A. Schumpeter in his work Capitalism, Socialism, and Democracy in 1942.

[3] Daron Acemoglu, James Robinson, Ulusların Düşüşü: Güç Zenginlik ve Yoksulluğun Kökenleri (Why Nations Fail: The Roots of Power, Poverty and Prosperity), p.227-228, Istanbul, 32^nd Ed. (2018).

[4] Id. p. 291-293.

[5] Id. 101-102

[6] Id. p.331-332.

[7]A hypothesis which is inspired by a scene in Alice in Wonderland: Through the Looking Glass by Lewis Caroll demonstrates the useless and unsuccessful efforts to get ahead of an existing competition in a natural or business environment since the rival is improving itself as well.

[8]The communication of entangled objects in the quantum realm is fundamentally different than communicating on the macroscopic level and this feature cannot be used for real-world communication between two or more parties. Because in order to access the information either of the parties will measure the quantum object and this measurement will “force the entangled (object) into a particular state” and consequently the entanglement will collapse. See, https://www.forbes.com/sites/chadorzel/2016/05/04/the-real-reasons-quantum-entanglement-doesnt-allow-faster-than-light-communication/?sh=78e2ebc23a1e

[9] Quantum simulations will possibly be used in many different sectors and particularly, pharma industry may benefit from this technology a lot. The greatest contribution of quantum simulations to the pharmaceutical industry will possibly be on the discovery of drugs by significantly reducing the time and cost in the R&D processes.  See, McKinsey Pharmaceuticals & Medical Products Practice article

[10]Quantum cryptography may provide almost eternal security and privacy to the parties involved in transaction, communication or any kind of data transfer. This may erase the concerns for the applications of some future technologies that carry substantial potential hazards regarding highly sensitive data security like brain-computer interface (BCI) technologies which enable communication of the brain with any kind of external device. Combining BCI with quantum technologies and blockchain may help overcoming the current security concerns.

[11]Currently, China and the US are leading the race for quantum supremacy. Both the UK and the EU (more recently) have started heavily investing in this market.

[12] According to the report, there is a dilemma for less developed countries:  “(p)eople feel that no matter how hard they try they cannot increase their general standard of living in a country that is growing slowly – and that the only way to close the income gap is to move to a country with a higher average income” Yet, that might create a vicious cycle: the emigration of highly skilled and well educated people may create a “brain drain” in those countries and accordingly, it may reduce their development speed and level.

[13] In that manner, there are scientists claiming that building a quantum computer is not even possible.

[14] The majority of the dominant firms in global quantum computer market are based in the US and therefore, the main focus of antitrust discussions (at national level) will be gathered around the US antitrust policies and laws.

[15] For instance, the US Congress enacted the Platform Competition and Opportunity Act of 2021. According to the Act, “(t)o promote competition and economic opportunity in digital markets … certain acquisitions by dominant online platforms are unlawful.” In a similar manner, in July 9, 2021 President Biden signed Executive Order on Promoting Competition in the American Economy (Order) in which the President seeks for a cooperation and coordination between the federal government agencies in order to prevent profit concentration, abuse of market power, adverse effects of monopoly and monopsony and other unfair trade practices in several markets including “internet platform industries.”