Terry Flew - Regulating Platforms

But the influence of the ideas described above was never simply ideological. They were articulated to an emergent set of economic interests, notably those of the digital technology corporations that would come to be the dominant players – first in US capitalism, then globally. This was not necessarily apparent in the early years of the internet. Academics and activists argued that the tendency of digitally networked technologies was to make access to content free, open, non-proprietorial, and shareable (Barlow, 1996b). There was the opportunity, as John Perry Barlow put it, to free ‘the economy of mind’ not only from the distributional constraints of physical form, but from the sociolegal constraints of property.

The dot.comcrash of 2001 resulted from the proliferation of web-based businesses that offered products and services in new ways but lacked an underlying business model. This situation led to the formation of a speculative bubble, not backed by solid capital accumulation strategies. Robin Mansell and W. Edward Steinmueller have observed that it was the successful digital platform companies that confronted and resolved the question of ‘how to make money from information on a system designed to freely exchange information’ (Mansell and Steinmueller, 2020, p. 132). The key innovations in this respect revolved around platforms using data, algorithms, and machine learning in order to better understand their users, then onselling this information in order to sell advertising that would be more targeted than traditional approaches. It was ‘from this key insight [that] a cascade of complementary innovations followed’, all designed ‘to monetise user data and observational data about users – the process now referred to as datafication’ (p. 133). Shoshanna Zuboff (2019) has argued that it was the capacity to monetize search that made Google the first truly successful data-driven online business and the paradigm of what she termed ‘surveillance capitalism’.

Ideas associated with what I have labelled ‘the libertarian internet’ also came to have a strong influence upon the institutions of government. This was most apparent with the passing, in the 1990s and the decade 2000–10, of communications legislation that identified digital platforms as communications intermediaries rather than as companies that provided advertiser-supported digital content, and gave them legal protections from content hosted on their sites that differentiated them from publishers and media companies. This focus upon speech rather than media would strongly shape the evolution of digital platforms, as it made a strong case for nation states to remain ‘hands off’ where the governance of digital platforms was concerned. This continued to be the case even when issues surrounding the power of platform companies and the wilful misuse of the platforms became increasingly apparent.

Five elements can be identified as shaping the development of the internet in its first years, from the early 1990s until around 2005, that continue to frame our understanding of digital platforms and of the questions surrounding their governance and regulation: the influence of free market economics; theories of the ‘new economy’ and knowledge-based systems; the primacy of freedom of speech; communitarianism; and romanticism and the counterculture.

There was a strong consensus in the early years of the internet that its development should be driven by a market-led model and that the role of the government should be minimized. The digital revolution, with its ‘crucial left-right fusion of free minds and free markets’, as Louis Rossetto (1966), the founding editor of WIRED magazine, described it, was a critical driver of thought and policy. This was so in spite of the fact that vital parts of the internet’s infrastructure – such as ARPANET – were largely funded by the US government, or that the World Wide Web was first developed by computer scientists at the government-funded Conseil Européen pour la Recherche Nucléaire (European Organization for Nuclear Research) (Castells, 2001; Mazzucato, 2015).

Beyond the level of pronouncements, such ideas had a substantive impact upon key areas of public policy. The Telecommunications Act 1996, which aimed to reduce legislative barriers to technological convergence, was passed by the US Congress in order to ‘promote competition and reduce regulation … and encourage the rapid deployment of new telecommunications technologies’ (Eisenach and May, 2001, p. 1). Upon signing the Act into law in 1996, President Bill Clinton proclaimed that it would ‘help to create an open marketplace where competition and innovation can move as quick as light’ (ibid.). In outlining the underlying principles behind the implementation of the Act, Reed Hundt, the chair of the Federal Communications Commission (FCC), pointed out that one of the commission’s core principles was to ‘make sure the discovered truth about competition is nowhere frustrated by the chronic urge to monopolize. Like a Hindu tale of the struggle between good and evil, the battle between competition and monopoly will last as long as markets exist. And government should always be on the good side: the side of competition’ (Hunt, quoted in Aufderheide, 1999, p. 283). His successor, William Kennard, would observe in 1998 that ‘the Act is all about competition’ (Kennard, quoted in Aufderheide, 1999, p. 301).

Extending these pro-competitive, deregulatory principles internationally, in 1998 the US government’s White Paper on internet governance proposed the creation of a new entity, whose function would be to manage internet domain name allocation: the Internet Corporation for Assigned Names and Numbers (ICANN). Observing that ‘the Internet succeeds in great measure because it is a decentralized system that encourages innovation and maximizes individual freedom’, the White Paper proposed that, ‘where possible, market mechanisms that support competition and consumer choice should drive the management of the Internet because they will lower costs, promote innovation, encourage diversity, and enhance user choice and satisfaction’ (1998 White Paper, quoted in Mathiason, 2009, p. 56).

The dominance of free market and pro-competition principles of this kind, in communications policy and in public policy more generally, for two decades from 1990 on, has commonly been described as a dominance of neoliberalism. Neoliberalism is seen as ‘a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong property rights, free markets and free trade’ (Harvey, 2005, p. 2) – a theory according to which ‘the production of efficient markets should be the primary goal of public policy’ (Hesmondhalgh, 2019, p. 51). The neoliberal agenda has been described by the International Monetary Fund (IMF) as being built around two key principles: ‘increased competition – achieved through deregulation and the opening up of domestic markets … to foreign competition’, and ‘a smaller role for the state, achieved through privatization and limits on the ability of governments to run fiscal deficits and accumulate debt’ (Ostry et al., 2016, p. 38). Neoliberalism has been characteristically linked to the dominance of neoclassical economics in the fields of media and culture, given their focus upon rational choices made through markets by profit-maximizing firms and by individual consumers who seek to maximize personal satisfaction (Freedman, 2008; Hesmondhalgh et al., 2015; Hesmondhalgh, 2019).