Digital Politics is a column about the global intersection of technology and the world of politics.
LONDON — In the race to regulate Big Tech, there is one rule of thumb — whoever moves first gets to write the rules.
Thats a lesson from decades of experience in regulating other global sectors like trade or finance, and it holds true now as powerful Silicon Valley companies are finally coming around to the reality that they will face rules, in a big way.
The pattern is all too familiar.
As a once-fledgling industry morphs into a global behemoth, whichever group of policymakers is able to assert a vision of regulation — first at a national, then regional and finally at the global level — has a distinct advantage, one that turns into leverage to force other groups into embracing their rules, even when its at odds with domestic agendas.
In this winner-takes-all fight, it is Europe — despite, or perhaps because of, its lack of global tech companies — that has established itself as the worlds regulatory trendsetter for Big Tech (outside of China).
“Europe assumes a disproportionate leadership role in digital policymaking” — Nick Clegg, Facebooks chief global lobbyist
With a market of 500 million wealthy citizens and the ability to coordinate on hot-button matters like digital tax, competition and privacy, Europe has outmuscled the United States, which is only now debating about the need for tech regulation.
“The first mover occupies the international agenda,” said Walter Mattli, professor of international political economy at the University of Oxford. “If you manage to speak with one voice at a regional level and push your views at international fora, more often than not you win the regulatory game.”
Its not that Europe has all the answers for regulating Big Tech. Nor have some of the regions efforts (like the recent overhaul of the European Unions digital copyright regime) escaped legitimate criticism.
But as consumers around the world question their relationships with companies like Amazon, Google and Facebook — whose users number in the billions worldwide — it makes sense that one region is filling the void of rules.
In the past, that global role fell to the United States. Washingtons economic and political clout following World War II allowed it to dictate the global rules of trade, finance and a range of other industries that U.S. leaders had an interest in pressing a Washington-centric view on. Other regions, namely Europe, were too divided to act as a counterweight.
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But fast-forward 60 years and a lot has changed.
U.S. dominance of the global economy has weakened in the face of China. Donald Trumps “America First” agenda has lent legitimacy to go-it-alone efforts elsewhere. And Washingtons hands-off approach to regulating its largest tech players left a gaping opportunity for others to outflank the U.S. in creating rules for the digital age.
Even before Facebooks Cambridge Analytica scandal put privacy in the global spotlight, the EUs data protection standards had already become the de facto global standard — something that has become even more pronounced since the regions rules were revamped last year. (After years of inaction, the U.S. is now contemplating federal privacy standards after California passed its own state laws last summer.)
Antitrust regulation is also being driven from Brussels, where Margrethe Vestager, the EUs competition czar, has made the most of cases (and blockbuster fines) against Google, Amazon and Apple to showcase the need for greater scrutiny of digital giants.
European officials published a report earlier this month urging regulators to scrutinize future takeovers based on how companies used data. And Germanys domestic competition authority has gone farther than any other Western regulator, linking perceived abuses of digital information with antitrust investigations.
EU Commissioner for Competition Margrethe Vestager | Olivier Hoslet/EPA
“Mark attaches particular attention to what European lawmakers are thinking,” said Nick Clegg, Facebooks chief global lobbyist in reference to Mark Zuckerbergs focus on what happens within the EU (the two spent much of last week traveling between Berlin and Dublin).
“Europe assumes a disproportionate leadership role in digital policymaking,” Clegg added.
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It would be one thing for Europes gung-ho attitude towards policing Big Tech to remain within its borders.
But in the last 18 months, the EU has upped its game, asserting power beyond its frontiers by promoting its regulatory agenda within international bodies like the G7 and Organization for Economic Cooperation and Development, a club of mostly-rich Western states.
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