Digital dilemmas: European regulation and the internet

For most of its history, the internet sparked a fierce debate about whether it should be subject to government regulation or only self-regulation based on informal community rules. This debate has subsided somewhat in recent years, amid increasing calls for government regulations to protect citizens online – largely thanks to the European Union, which has become a lodestar for digital policymakers around the world.

Yet while the debate about whether to regulate may have drawn to a close – at least in the EU – the debate about how to do so continues. Meanwhile, the internet fundamentally tests the ways in which governments approach regulation by eluding enforcement agencies, transcending national and international administrative boundaries, and eroding the traditional delineation between markets and sectors, as well as that between consumers and producers.

On 24 September 2019, the European Council on Foreign Relations, in collaboration with Telefónica, organised a workshop in Berlin to debate these issues. The workshop brought together 25 leading experts from the UK government, civil society, and the private sector to identify the key problems with internet regulation and possible solutions to them.

Key problems

As seen in the convergence between traditional media, telecommunications, and online platforms, the internet’s capacity to blur the boundaries between various entities poses significant challenges to regulators. This is particularly true when distinctions that are problematic in the physical world transfer into the online space. For instance, it becomes harder to identify and address extremism, disinformation, coercive behaviour, bullying, and other harmful activities – especially those that are of uncertain legality.

Far from being passive hosts of content, platforms shape the information end-users receive to a significant degree

Because its virtual, global nature transcends national and international administrative boundaries, the internet is resistant to regulation. Most institutional regulatory frameworks are national – with agencies and ministries focusing on a specific sector or activity – and, as a consequence, ill-equipped to address the transversal challenges of the internet and other digital technologies.

Stifling innovation

Participants in the workshop warned that, while there are benefits to the EU’s bid to impose European values (such as the fundamental right to privacy) on all facets of technology – particularly in the context of a global “techlash” – disproportionate or poorly designed regulation poses a threat to innovation. This is because it could place European tech companies at a disadvantage when they compete at the local and international level, further consolidating the position of dominant firms. The EU will have to depart from its habitual approach to regulation – often characterised as restrictive and protectionist – and pursue smart policymaking that balances regulation with the need to foster innovation.

While the private sector, state bodies, civil society groups, and multilateral institutions have launched several internet regulation initiatives – with much convergence between them – many of their recommendations have yet to be implemented. As a result, participants argued, there is an urgent need to move towards the policymaking and implementation phase.

Solutions

Multi-stakeholder model

All stakeholders – be they end-users who are active online or the private companies that own much of the world’s digital infrastructure – play a crucial role in the ecosystem of the internet. As such, the multi-stakeholder approach to internet governance has emerged as more viable than a solely intergovernmental one in the past decade. The multi-stakeholder approach requires companies, government bodies, and civil society groups to work alongside one another in various forums to develop a policy consensus. One example of this is the Internet Corporation for Assigned Names and Numbers, an organisation tasked with managing the domain name system, IP addresses, and other critical parts of the internet’s architecture.

As governments begin to discuss the question of internet governance and regulation, they need to maintain the multi-stakeholder approach: the more inclusive the process is, the better its results and their implementation. However, the model requires improvement if it is to be an effective policymaking tool, given its slow and diffuse operation, its lack of clear incentives for accountability, and the broader inefficiency that come with inclusiveness.

Private sector ownership

Give the extraordinary pace of technological change and its often unpredictable impact on politics, economics, and society, one cannot rely only on government legislation to deliver the right outcomes. With technology changing so quickly that regulators often fail to keep up, much legislation is redundant by the time it is implemented. Meanwhile, companies and individuals will always be able to find loopholes that allow them to circumvent existing rules or develop new technologies in a policy vacuum, resulting in a cat-and-mouse game between regulators and the private sector. Participants in the workshop argued that, due to reputational and transparency concerns, companies could take greater ownership of their online activities – by mitigating their business models’ negative impact on the public interest. Nonetheless, this approach should involve some government regulation.

Guiding principles

Policymakers should define the general set of principles and rules that cover the operations of tech companies, especially platform economies. Although they should not provide detailed digital policy prescriptions, governments should set norms even as they delegate some of the implementation and supervision of these norms to private entities.

Transparent algorithms

Far from being passive hosts of content, platforms shape the information end-users receive to a significant degree. As one participant put it, “the technical is the new political”. Therefore, tech companies need to curate online content in a more transparent manner. For instance, the public should be able to see how algorithms select the information that appears on end-users’ webpages.

Boosting the EU’s tech industry

The EU has assumed a global leadership role in digital policymaking, but its regulations are not enough in themselves. The bloc also needs to boost its own digital credentials if it aims to catch up with China and the United States, enacting policies that nurture innovation, investment in research and development, and the European tech industry. The EU must ensure that its regulations don’t put European tech companies at a disadvantage when they compete locally or internationally. Indeed, leading tech companies will have the greatest say of all in shaping future norms and rules across the world.