Terry Flew - Regulating Platforms

The argument of this book is that the push for greater internet regulation is integrally related to the platformization of the internet – that is, the process through which online interactions and engagements are increasingly made to take place on a relatively small number of digital platforms. Moreover, as the platform business model enables significant competitive advantages to accrue to dominant companies through first-mover advantages, lock-ins, and network effects, the companies that own these online spaces acquire monopolistic and oligopolistic economic power. Such derives from access to ever-growing bodies of user data that allow for behavioural targeting across multisided markets. This power extends not only over consumers but over other businesses as well, both through dominance of digital advertising and through the terms of trade that these giants can impose on digital content providers in the news media, entertainment, and other creative industries. With such power, however, comes considerable social responsibility, as the dominant companies increasingly perform a gatekeeping function over digital communications and play an outsized role in political processes around the world. Hence it becomes imperative that they set guidelines and moderate online speech across issues such as hate speech and online abuse, or disinformation and fake news. But these companies were strongly imbued with the Silicon Valley ethos of maximizing free speech rights and user engagement: this was both their business model and their underlying philosophy. In consequence, they have frequently been uncomfortable with managing online interactions in ways that satisfy the concerns of citizens, politicians, other stakeholders in their businesses, and the public interest.

A historical typology informs the book: in this typology, the evolution of the internet unfolds in three stages. The first stage, which can be broadly dated roughly from 1990 to 2005, is that of the open internet or libertarian internet , as we may call it. It was strongly infused by the Californian ideology – which is summed up in the slogan ‘free minds and free markets’ – as well as by deregulatory economics and countercultural idealism. The idea was that governments can and should be largely kept at bay in matters of regulating the internet, on the grounds that the spontaneous ordering introduced by global netizens would promote a liberal order underpinned by continuous waves of technological innovation.

The second stage, from 2006 to the present, is that of the platformized internet . The rise of Web 2.0 brought together two significant insights: most internet users preferred environments that were managed and curated by others; and such environments enabled online interaction by simplifying processes of accessing content or using devices. As part of this welcome simplification, every online interaction produced a data trail that was potentially open to providing useful insights, which could in turn inform further economic transactions. This was the era of gestation of big tech and the companies that dominate digital communications today. Critics came to label it ‘digital capitalism’, ‘platform capitalism’, and ‘surveillance capitalism’. It has seen growing demands for antitrust action against the tech giants, calls for greater regulation of online activity in order to reduce social harms, and concerns that the digital sorting and reshaping of communities could promote political polarization and a ‘post-truth’ society.

The argument of this book is that we are now entering into a third phase of the internet’s evolution, namely that of the regulated internet . One of the questions I raise concerns the relationship between platform regulation and platform governance. One version is that regulation characterized twentieth-century communications and media policy, and especially nation-state agencies, whereas governance is a broader term that encompasses multiple stakeholders, policy innovation, and approaches derived from behavioural economics and nudge theories. Drawing upon six case studies that have operated at national, regional, and global levels, I critique this argument, proposing instead that the distinction is not so much between regulation and governance as it is between regulations that are applied by external agencies and have some form of negative sanction attached to breaking laws, and regulations that largely work upon implicit understandings of appropriate platform conduct and the promise of better corporate behaviour. The field is rendered more complex by the fact that governance is an inherent feature of platforms themselves, as they manage multiple stakeholders in diverse market environments that have high levels of public visibility around their decisions. This book argues (1) that public opinion and the role played by governments that seek to represent it push towards greater external regulation of digital platforms, and (2) that nation states are becoming increasingly important actors in shaping online environments. At the same time, many regulatory models are hybrids of nation-state regulation, co-regulation, and self-regulation. This is a space with high levels of innovation when it comes to types of regulatory approaches (the Facebook Oversight Board is a recent example) and with higher levels of civil society engagement, public interest, and media reportage than found in other industry sectors.

These developments are conceptualized in the book around the proposition that the development of digital technologies generally and of digital platforms specifically can be framed as arising at the intersection of ideas, interests, and institutions. Ideas refers to the dominant ways of thinking about material objects and relationships at any given time, but also to the ideas that challenge and compete with those dominant ways of thinking or ‘mental maps’, as they are sometimes called (Denzau and North, 1994). Interests consist of those entities that seek to advance their own power individually or collectively, in the economic, political, and cultural spheres. Digital platform companies themselves are clearly ‘interests’ in this special usage, and so are other businesses that have relationships with them (news media, entertainment, advertising, etc.), as well as organizations that represent conflicting or competing interests: trade unions, advocacy groups, consumer organizations, and non-government organizations (NGOs) generally. Institutions are those organizational arenas that have responsibility for governing and regulating digital platforms for particular outcomes. Through them the interplay of ideas and interests is played out and collective decision-making occurs – at local, national, regional and supranational levels.

What we see from this angle is a mismatch between the rise of digital platform companies as dominant players in the global economy and de facto gatekeepers of digital interactions on the one hand, and the ideas and institutions that underpin platform regulation on the other. Many of the ideas that inform this space and the institutions established for its governance remain tied to the decentralized world of the open internet on which they were premised. In this world, nation states should not govern the digital realm because no one needs to govern it. That was the ideal of spontaneous ordering promised by the libertarian internet. As a result, we come across increasing numbers of instances where nation states that attempt to regulate competition, content, data, and other aspects of the digital environment find their legitimacy in doing so repeatedly challenged, both by the interested companies themselves, which tend to operate globally rather than nationally, and by civil society organizations. At the heart of debates along this line is the question whether those who interact with digital platforms are best understood as national citizens or as global netizens.