Everyone wants to regulate the big tech companies. Efforts to rein in big tech represent a confluence of many different factors, but most of all reflect the outsized influence these companies have come to have on almost all aspects of our lives. However, the political consensus around regulating the tech industry is illusory. While everyone wants to regulate big tech, it turns out that they want to do so in very different, indeed contradictory, ways.

This paper, available here, identifies some of the contradictions of platform regulation, their implications, and whether there is a way forward.

Part I explores the contradictions of platform regulation proposals.

Everyone may want to regulate big tech, but there is no agreement on what government should require big tech to do (or forbid big tech from doing). Some proposals are plainly contradictory. For example, there are widespread proposals to make internet platforms responsible for content posted on them – but while some want to encourage platforms to more closely police the content of their sites, removing false information and hate speech, others want to ensure that platforms act as common carriers that will not block any third-party content on their sites. Somewhat ironically, proponents of platforms policing content posted on them also typically support net neutrality rules that prevent carriers at the physical layer from discriminating among Internet traffic based on source or content; whereas those who want to prohibit platforms from discriminating on content would repeal net neutrality rules and pave the way for cable and wireless companies to discriminate on the basis of content instead.

A second cluster of contradictory regulatory impulses centres on the use of consumer data by platforms. Three main positions can be found in this regard: (i) platforms’ unlawful practices lead to advertising prices that are too high; (ii) in a competitive market, platforms would grant users more privacy; and (iii) in a competitive market, websites that display content and ads (e.g. newspapers) would generate more revenue instead of seeing it syphoned to platforms. The canonical argument is that if we broke up the platforms, or restricted their market power in some other way, we would have a more competitive market. Reducing digital platforms’ concentrated control over our data would thus serve the substantive goals of data privacy and/or funding newspapers. There may be good reason to think that each of the concerns above is seriously held, but it is not possible to coherently think that all three are concerns that can be addressed by regulation. Regulation designed to fix one of those perceived problems – say, bringing more competition to digital advertising – is likely to make the other problems – say, protecting one’s personal data – worse.

Yet another contradictory set of proposals focuses on breaking up data monopolies. Concerns about data monopolies reflect two different worries: that too much information about us is readily available on the Internet; and that too much personal information is concentrated into too few hands, giving dominant platforms an information edge no one else can match. Each worry has a different, and contradictory, solution: those concerned with the widespread flow of personal information generally want to make it harder for companies to sell or otherwise share that information, whereas those concerned with concentration of data on the Internet will want the same personal data to be in the hands of more companies in order to facilitate market entry.

Part I also looks at contradictions in those platform regulations that have been adopted.

Existing laws already require inconsistent things, or at least things in considerable tension with each other. For example, some rules prevent Internet companies from retaining personal data beyond a certain period, and require them to remove accurate information from both private databases and the public record. The simplest way to comply with this rule is also the most privacy protective: a site could just not keep personal information at all. However, EU law not only requires Internet companies to delete data after a certain period, it also requires them to collect that same data in the first place and keep it for a minimum period.

Another example concerns copyright. When the EU declared that a search engine linking to publicly-available news stories was an act of copyright infringement, Google complied with the new law, dropping its links to European news sites covered by the law. However, the news sites that supposedly benefited from the new law almost all provide news content online for free, generating revenue from advertising on the site. Since as much as half of the traffic on those news sites comes from Google News’ links, Google’s attempt to comply with EU law significantly affected traffic to news sites and their advertising revenues. As a result, European news organizations promptly went to court to get an order requiring Google News to link to them, even though that act was now – at their insistence – a copyright infringement, and, as a result, Google should have to pay for its (now required) act of infringement. This is a particular example of a problem with efforts to regulate that explain many of the contradictions outlined above: the desire to have the benefits of a regulatory policy without paying the costs.

Part II explores the way forward.

The regulation of technology platforms is likely to require difficult trade-offs, giving some people what they want but making things worse for others. Sometimes the contradictions in platform regulation proposals reflect not the futility or absurdity of the idea of regulation, but the fact that regulating complex industries like online intermediaries involves tough policy trade-offs. It may be that the right response to such trade-offs is to forebear from regulation altogether. Good examples include instances of regulation requiring platforms to act in contradictory ways. In other occasions, regulation may be necessary, but we need to go into it with eyes open, understanding the harm it will likely cause.

There are lessons to be learned from thinking about why there are so many contradictory efforts to regulate big tech. The answer may have to do with the outsized role these companies play in our lives. The dominant tech firms are private companies, but they have been so dominant for so long that they feel more like institutionalised monopolies, of the kind we used to regulate as public franchises. This means that, whatever people want from tech giants, they increasingly turn to regulation to get it. However, public franchise regulation should be a last resort, for a number of reasons.

A better alternative is to try to inject real competition into a tech industry that has been lacking it in recent years. Generally, when we face hard policy choices, we should come down on the side of competition and interoperability that can open markets to new competitors– even if it sacrifices other policy goals. These are hard choices. But in the long run, regulatory choices that impose obligations on incumbents to do the things we want them to do as a matter of social policy are likely to entrench those incumbents, making it harder and more costly for someone to compete with them. Effective antitrust enforcement that opens tech markets to competition may, by virtue of that competition, be able to get people many of the things they seek today from regulation more efficiently.

Comment:

This is an insightful piece that is also easy to read – not a common combination in this area. It is somewhat US-focused – e.g., many of the tensions the author identifies reflect either US-specific questions (around free speech and the ownership structure of networks). However, some tensions, such as that between competition law and data protection considerations, are ubiquitous.

One may quibble with the author’s dismissal of regulatory concerns other than those related to competition. I, for one, am not particularly convinced by arguments that, by promoting competition, we will also address other public interest goals. However, it is a public service of the first order to bring these tensions to the forefront, since these are the discussions we are going to have now that the debate has moved past the ‘should we regulate digital platforms or not’ stage. 

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