What happened?

The city of Amsterdam wants to scrutinize all digital platforms to manage the undesired effects of their artificial intelligence (AI). Algorithms used by both the municipality itself and commercial platforms will not be allowed to discriminate between citizens. The city could even conclude that algorithms should no longer be used, should it prove impossible to rid them of discrimination. “Algorithmic screening” might also become a prerequisite for business licenses.

What does this mean?

As cities are taking control of pressing challenges, this could increasingly extend to taking control of digital platforms within the Stack. One consequence of cities becoming more active within the Stack is the stalling innovation of “smart city” projects (due to concerns over data ownership and privacy). Now, instead of merely delaying projects (e.g. Alphabet’s project in Toronto), cities could take more control over the activity of digital platforms. The sustained rise of “urban tech” (e.g. Airbnb, Uber) will increase the likelihood of such attempts.

What’s next?

If cities take control within the Stack, this could have far-reaching consequences. Besides merely stalling innovation, growing concerns over discrimination, privacy and data ownership will threaten the business models of digital platforms. In the face of pressing challenges such as congestion and housing affordability, some cities may not be discouraged to take radical measures. It is also likely that cities will increasingly try to develop their own digital platforms (not necessarily as replacements, but also as integrated platforms). This has already happened in the domain of mobility (e.g. Singapore, Copenhagen, Barcelona, Dubai, Helsinki).