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Regulate digitization

The digital transition has consequences that oblige us to regulate that also addresses its political dimensions. Much progress has been made in the area of ​​privacy and data protection, but there is much to be done with regard to our public life, already structured to a large extent by digitization and its effects. principal actors. The regulation of what s The digital giants have focused on the issue of taxation and content, but its most disruptive effect is probably found in its ability to configure public space, in its influence in the field of information and communication, without these private actors have assumed the legal and democratic responsibilities that such magnitude implies.

The domination exercised by the digital giants has serious consequences in the democratic sphere. The structuring or systemic nature of its influence on markets reveals a dominance over political and democratic sovereignty that corresponds to citizens and their representative institutions. Given the current conditions, the insufficiency of the current competition law and the inadequacy of the regulatory instruments in fact confer on private actors the power to define the rules of expression in the public space, to launch their own currency or, shortly time, also dictate policies in other matters. We cannot let digital platforms privatize our public space.

The initial problem is given by the different nature of size in the analog world and in the digital world. In the physical world, economies of scale are negative from a certain threshold, but this is not the case in the digital realm. These and other properties have allowed the largest digital companies to occupy a prominent place in the global economy, in terms of number of users, market sectors and financial power, in ways that pose a huge risk to competition, since their dominant position it casts doubt on the possibility that other actors capable of competing with them will one day emerge.

opi4 from April 10
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An added problem comes from the fact that in the digital world neither antitrust legislation nor the state level are effective. The idea that monopolies are bad because they raise prices and hurt the consumer has been central in the organization of the analog economic space, but now we find technology companies that lower prices – some are even free, like Google and Facebook – and they are great for consumers. A neoliberal reading of competition (concentration can benefit consumers) has disarmed the public powers in the face of the emergence of a digital economy founded on the illusion of gratuity for the consumer. This logic does not identify the root cause of the problem posed by the internet giants. Their impact is due to the character of a monopoly or oligopoly that they have acquired in such a short time. Taxation and content regulation, important as they are, are nothing more than symptoms of the excessive concentration of the digital economy landscape. Its threat to democratic life does not have to do with prices but with the concentration of power, the provision of data and the control of public space.

We can’t let the digital giants privatize our public space

Technology allows companies to collect, store and exploit a large amount of data that, once crossed, improves effectiveness and constitutes an indispensable contribution to training algorithms. This data economy is a free economy addictive for the consumer, since they access powerful services without having to pay any price except by collecting their personal data and personalized advertising that the platforms sell to other companies. It is, from the outset, the network effects allowed by these services, whose power of attraction grows depending on the number of users captives . If the price to the consumer is zero, the policy approach to price competition is therefore inoperative.

There are other reasons why current competition law is hardly in a position to understand and regulate the functioning of digital actors. First of all, because the scale of the traditional penalties for abuse is ridiculous when companies have so much value and have huge cash reserves. The amounts obtained by the European Commission in terms of fines have only marginally modified the behavior of this type of actor.

The realization of these and other shortcomings has led some European states to defend a profound transformation of the European competition policy and the community authorities to implement new regulations that have culminated in the Digital Markets law, which, beyond a simple adaptation of the traditional instruments for the defense of competition, introduces a new regulatory framework ex ante (as opposed to the intervention of the current regulator, which always intervenes to correct ex pos t a situation of dominant position).

A regulation of this style must allow the competent regulator to have a wide range of instruments to intervene preventively against digital giants, which would include a list of prohibited practices, the ability to prevent risks in relation to competition or correct the risks. existing competition deficits, interoperability obligations, data portability, and so on.

This new regulatory framework ex ante it must make it possible to respond to the challenges posed by the large digital platforms; you just have to draw the consequences of the concept of structuring platform and apply the regulation modalities that already exist for essential infrastructures in a quasi-monopoly regime, such as railways, energy or telecommunications, completing the classic idea of ​​regulation by a supervisory logic. Of course, faster intervention times will be needed, keeping up with the innovation rates of the digital economy. And this framework has to be flexible in order to adapt to the constant evolution of the practices of the actors and it must have complex technical instruments.

The new EU regulations allow preventive intervention with large platforms

Democracy has some outstanding moments in the possibility of deciding and voting, but that will not be possible on equal terms as long as there is someone who has so much power to structure the digital playing field, where the most important political battles are already taking place.

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