Europe is about to get a new digital law. It will change the way Google, Facebook and Amazon do business. The mechanisms that allow them to make billions are polarising society. We need robust new rules to protect our democracy.
The digital world has become like the Wild West. Huge online platforms are the self-appointed sheriffs of this largest marketplace of humanity. They refuse to tolerate any competition, arbitrarily dictate rules and put their profit interests above all else – even though their platforms have now become public spaces. This is an affront to democracy. Any remaining doubts that this was the case were removed by the storming of the Capitol in Washington on 6 January 2021, when the true believers in Donald Trump‘s conspiracy theories, spread chiefly by digital means, occupied the “Temple of Western democracy” for several hours. Currently the only remedy seemed to be the CEOs of Facebook and Twitter blocking the accounts of a sitting US president – private companies limiting public speech – an even worse attack on democracy?
Going forward, society should be able to have a say in the rules that govern its own marketplace. Europe is therefore working during this legislative period on two new laws for digital services and markets: the “Digital Services Act” (DSA) and the “Digital Markets Act” (DMA).
These two laws have the potential to become a new fundamental law for online platforms. Europe is in the vanguard of the movement. From Australia, which is currently drafting a digital law of its own, to almost every corner of the earth – most particularly in the US itself – all eyes are on Europe, keen to see whether it will pull off the coup of changing the digital world and protecting citizens’ rights. In December 2020, when the EU Commission presented the two draft laws, this worldwide interest was palpable: can the EU enforce and establish democratic rules and a fair market?
Information at the service of business interests
This is a matter of urgency, for without democratic safeguards, the dangers to democratic societies will grow. The platforms disseminate information that forms the basis of many people’s political decisions and opinions. But they do not do this in an independent and balanced way, but on the basis of their own business interests. False information, hate, smear campaigns and slander are far more likely to go viral because the platforms can keep their users on their websites longer by showing extreme and polarising content, earning them greater advertising revenue. It is simplicity itself for political players to exploit this system. The mob that stormed the Capitol, having been whipped up to a frenzy by Donald Trump himself over Facebook and Twitter, genuinely believes that the official result of the US presidential elections was falsified. And we have no idea how many more of Trump’s 72 million voters share this viewpoint. Convincing such a large number of people is possible only by the deliberate use of sophisticated psychological techniques and a constant bombardment with news articles tailored to the individual.
To make this personal service as effective as possible, private data about us are continually collected. Online and off-line information on places visited, interests, sexual orientation and time spent online are channelled to thousands of companies, which use it for the purposes of advertising, categorising and manipulating us without our knowledge. The major social networks are first and foremost advertising companies: they make money out of us by keeping us on their websites for long periods of time and charging third parties for our rapt attention. They also decide which products are put in front of millions of people and set the going rate for these digital window displays.
This mechanism also leads to a greater polarisation of society: if data are collected and compiled, it is possible not only to deliver targeted advertising, but also to channel smear campaigns, disinformation and prejudices right to the target groups that are most receptive to them. It is a vicious cycle that exacerbates the polarisation: the more extreme the content, the longer people will stay glued to their screens and therefore the higher the profit, so that at the same time, any fact-based discourse is increasingly doomed to failure.
The Digital Services Act offers the opportunity to ban advertising based on massive collection of personal data. But that is not quite what the European Commission has in mind, it just demands a little more transparency. That is better than nothing, but not for enough, particularly as the Internet giants are the only ones who benefit from this practice. In the reports of its committees in 2020, the European Parliament went considerably further and I personally will not hesitate to speak out against the manipulative way these platforms operate in future negotiations on the subject.
Half-hearted transparency obligations
Another key objective of the new legislative package is that the platforms will be required to disclose the algorithms they use to make recommendations. According to the WSJ, one third of Facebook groups have extremist content and 64% of members join them upon a suggestion by Facebook’s recommender system. The European Commission’s draft legislation also makes provisions for reasonably wide-ranging transparency obligations which go in the right direction. Unfortunately, however, the critical points of the text lack the muscle to enforce its own rules as effectively as it might.
Once again, the European Commission is relying on its faith in the companies themselves – faith that has proven in recent years to be unjustified. Businesses will merely be required to carry out their own risk assessments once a year and to examine whether their services are disseminating unlawful content jeopardising fundamental rights such as freedom of opinion, non-discrimination and child protection, or are spreading information that is not compatible with their own contractual terms. This is roughly tantamount to asking VW to conduct its own assessment of the effects of vehicle transport on climate change and to pen its own climate plans on that basis.
Why would a company objectively identify the risks of a business model that generates 98% of its turnover? Provision is in fact made for independent verifications, but currently there is no de facto autonomous and appropriately resourced authority that could carry out these audits. When called upon to clarify, the European Commission stated only that this would give rise to a new field of business activity for financial audit companies. But firstly, these companies do not have the right skill set and, secondly, they do not exactly have a shining track record in carrying out checks and balances on powerful businesses – see alleged malpractice cases such as Wirecard. Why would things be any different in the digital sector, with its high degree of concentration? All digital experts are only too well aware that a negative report on Google, Facebook or Amazon would very soon put an end to their careers in the private economy and scientific institutions.
We need a European supervisory authority
Despite good intentions and an accurate grasp of the problem, the responsibility for the oversight of digital platforms has once again been shifted to the private sector. But what we need is an independent, public European supervisory authority that can front up to the major players with a team of highly qualified experts. Democratic societies can exist only if their institutions can actually enforce their laws. The byzantine supervisory architecture of the DSA, which is furthermore based on national authorities, will not be able to ensure effective enforcement. In the meantime, Google, Facebook and Amazon will be able to play the national governments off against each other as they are already doing in data protection and taxation matters.
It is only through the interplay between these measures and others that the absolute power of the platforms can be broken and the income stream from their anti-democratic business model cut off. Europe has recently made a name for itself as a pioneer in data and consumer protection. This makes the suggestions set out in the draft legislation all the more disappointing.
But it will be many more years until it has been signed off and we go into hard negotiations. There has already been a small partial victory with the “notice and action” procedures. The European Commission adopted the proposals of the “My content, my rights” campaign by the Greens/EFA Group in the European Parliament, which will improve reporting channels in the event of illegal content on the Internet and enshrine the rights of users.
The power of the tech lobby
It will also be vital for the EU to stand firm against the massive pressure from lobbyists. The major tech firms have greatly increased their lobbying activities in Europe in the last few years. There is scarcely a digital event held in Brussels without the involvement of Google or Facebook, directly or behind the scenes. Furthermore, there is only a handful of truly independent experts, as the groups have covertly infiltrated every think tank. This is a huge problem. These think tanks publish studies and position papers and give the impression to the outside world that they are independent. In actual fact, however, Big Tech is involved in almost every case. Moreover, various new, obscure organisations have popped up, styling themselves foundations when they are in fact merely storefronts for the enormous tech lobby. I very recently made a complaint against the Center for Data Innovation, because it refused to publish either the names of its members or how it was funded. I have also made a request to the European Commission on this subject.
Even more perfidious is the lobby’s influence on universities by means of third-party financing. If digital teaching positions at revered universities such as the Humboldt University of Berlin, the Technical University of Munich or the College of Europe are partly funded by Google and Facebook, then their independence can no longer be assumed. This cannot and must not be allowed.
I remain vigilant and await with great interest the next moves of the Silicon Valley giants to shore up their power base in the coming years. They will attempt to plant doubts over the EU’s legislative proposals. But if Europe goes to work now with a courageous defence of its own citizens’ interests, the Internet will be free and democratic.
The original version of this commentary was published in German on boell.de.
