Why regulation is not the solution and what are the alternatives

Why regulating layer-7 companies is not the solution to protect users’ rights

Private empires are not new

Why Regulation is not the Solution and what are the Alternatives

Surely this rhetoric is ridiculous? Compared to what are these companies so formidable? The petroleum companies, which have been behaving as more than States since the end of the Second World War? The mining giants or the Odebeechts and Bechtels? Seeing the ease with which the Chinese Communist Party, wielding the weapons of the State has brought the Chinese platforms to heel should be a useful lesson in the location of coercive power.

Perhaps a layer-sensitive analysis would help to clarify what is at stake from what a couple of overheated European commentators have claimed. The telecomms in the transport business at layers 1-3 have always been creatures of the State to a significant extent. Microsoft was far more powerful as a monopolist in the software layers than it is now as a public cloud power among powers and statesperson among companies, which is its present posture. The primary pressures are at layer 7, where publishing, advertising, and retail selling—traditionally more localized industries with which state and market sectors had familiar arrangements arrived at over generations—have become applications in the Net, organized according to the principles of surveillance capitalism, severely disrupting national political economies. States are taking advantage of this disruption, almost as much as their constituent political parties and elected officials are. There is far less conflict between the political and the commercial interests than appears. The tiny European society-group, which has no commercial powerhouses among the world's layer-7 multinationals and remains unable to make any, has only a regulatory role to play in controlling commercial behavior in relation to its small number of very affluent citizens. So it talks big, because that's all it can do. But in the end, it settles for taking money from the US platforms and posturing before its voters.

Actually contesting the power of the layer-7 companies means building other forms of software that organize social life in other ways. That's eminently feasible, but while it immensely benefits society to create alternatives, that's less immediately beneficial to the State and its classe dirigente than to extract intelligence, political benefits and money from the parasite.

How GAMAM are disrupting our traditional democratic systems and challenging the concept of the Nation-state

-- By EleonoreVarale - 08 Dec 2021

The too late identification of the threat posed by GAMAM

If the risk of GAMAM (for Google, Amazon, Meta, Apple, and Microsoft) becoming all-mighty powers, thereby undermining our democratic structures, has been identified quite early in the academic world, around 2010, if not before, it took political leaders much more time to consider this issue as a danger. The French sociologist Dominique Boullier argues (1) that both the monopolistic ambitions of big tech companies (in terms of anti-trust law), and their immeasurable influence on the users’ behavior, made possible by large data collection, were issues scholars and whistleblowers tried to draw attention to from 2010. But, as he further explains, the tipping point in the political sphere occurred recently, with the Cambridge Analytica scandal in 2017 and the attacks on the Capitol beginning of 2021. These two triggering events, as they challenged the very essence of our democratic systems, namely the electoral process, acted as a waking-up call for political makers. Until then, the mechanisms of the digital platforms' hold on the market structure, on public opinion and on politics were already in place but were never questioned for economic reasons.

Insufficient attempts to regulate the Big Five

In the USA

On the two sides of the Atlantic, proposals are being made to create a stricter legal framework for the GAMAM. In the US, recently, the solution put forward has been to break up the Big Five. Debated during the election campaign of 2019, this idea is far from being unanimous. Still, in June 2021, the House of Representatives proposed a bill, nicknamed the Break-up Bill, that aims to enshrine in law the possibility of dismantling tech companies as a sanction. If this anti-trust far-reaching measure has already been put into practice in the past, for instance with the dismantling of the economic empire AT&T in 1984 under President Reagan, this option does not seem to be the preferred one for now. Indeed, various arguments against this solution are given by political instances; for instance, that the fragmentation of GAMAM would not eliminate monopolies, but would only spread them across different sectors, or that it would favor the rise of the Chinese big tech companies (the BATX for Baidu, Alibaba, Tencent, and Xiaomi).

More recently, Francis Haugen, former data scientist at Facebook who denounced the company’s role in affecting users’ mental health and democratic processes, also positioned herself against breaking up the tech giants. As she testified before Congress for the second time, she promoted targeted regulation instruments, starting with the reform of the legal liability shield provided by Section 230 of the Communications Decency Act. This topic is currently dividing Congress; if passed, this reform could bring some change. Yet, it is too soon to tell how effective and compelling it will be.

In the EU

Likewise, in addition to the GDPR enforced in 2018, the EU Commission has drafted two major bills, the Digital Services Act (DSA) and the Digital Markets Act (DMA) that are about to be approved by the EU Parliament and the Council. The DSA aims to create a binding rulebook for platforms to moderate illegal content, disinformation and advertisement. While the intentions of the EU Commission seem to go in the right direction, legal scholars have identified several flaws to the measures proposed, for example that the DSA still considers online platforms as “gatekeepers”, and not “publishers”, further protecting them in its article 6, the so-called “Good Samaritan clause”, which serves as “a shield from liability for good-faith efforts to remove illegal content in a proactive manner” (2), or that it does not put any limitation to the core practice of political micro-targeting advertisement. In this respect, a few weeks after the whistleblower Frances Haugen testified before the EU Parliament, the European Commission presented a proposal on “transparency and targeting of political advertising”, that includes an obligation for platforms to label political advertisement, by revealing who paid for it and for how much.

Eventually, as Dominique Boullier puts it (3), the dismantling of big techs, the transition from “hosting service provider” or “gatekeeper” to “publisher” status, the taxation increase of big tech’s advertising profits, and the implementation of a strict control system regarding hateful content and fake news could challenge the hegemony of the GAMAM, but this would require both a strong political will and a deep understanding of the threat that these platforms pose to democratic institutional systems, which lawmakers lack of for now.

The profound gap between our democratic culture and the governance in the GAMAM companies

As explained by Dominique Boullier (4), the governance system of the GAMAM relies on the famous “rough consensus and running code” approach, to which he added a third dimension that he called “apologies”. The “rough consensus and running code” model is driven by efficiency and pragmatic objectives, namely that “it works out”. This consensus decision-making process, that aims to reflect the dominant view, cannot be separated from the “running code” imperative. This means that while some people are discussing, it is always possible to do, to make, to develop, to test, without waiting for any specifications or directives. In that sense, this “taking action” culture is in total rupture with our representative democratic instances, that require a filtering process (cf lawmaking process and regulation) before acting. On top of that, the mere “apologies” made by Mark Zuckerberg when he was being auditioned by the EU Parliament after the Cambridge Analytica affair further show the contrast between our principles of law, that one is legally accountable for the harm caused, and this apology culture. This is viewed by Dominique Boullier as “a self-administered and therefore unenforceable morality, not subject to adversarial process, and a form of negation of law” (5).

In conclusion, one could consider that GAMAM have become the equivalent to states, with the three constitutive components of a state observed, namely territory, population, and sovereignty (this analysis is subject to discussion). Yet, contrary to Nation-states, they do not rely on a traditional legal and institutional structure, but on their own governance principles, making the regulation mission from other states even trickier.

(1): Dominique Boullier, "Puissance des plateformes numériques, territoires et souverainetés", p. 31, Sciences Po Chaire Digital, Gouvernance et Souveraineté, May 2021, ˂https://www.sciencespo.fr/public/chaire-numerique/wp-content/uploads/2021/05/RP-Puissances-des-plateformes-num%C3%A9riques-territoires-et-souverainet%C3%A9s-Dominique-BOULLIER-Mai-2021-1.pdf˃.

(2): Valentina Golunova and Juncal Montero Regules, "The Digital Services Act and freedom of expression: triumph or failure?", Alexander von Humboldt Institut für Internet und Gesellschaft , February 2021, ˂https://www.hiig.de/en/the-digital-services-act-and-freedom-of-expression-triumph-or-failure/˃.

(3): Boullier, pp. 33-34.

(4): Boullier, pp. 38-40.

(5): Boullier, p. 40.

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