Digital empires: technology and the global power struggle
As Generative AI models keep being launched into the world at a rapid pace, debates about whether and to what extent AI should be regulated have also further intensified. As #GenAI places powerful applications and tools in the hands of hundreds of millions of people globally, different paradigms regarding the regulation of technology around the world are becoming visible.
The timing of the launch of Anu Bradford's "Digital Empires: the Global Battle to Regulate Technology" last week is therefore very much on point. Bradford is known for her previous book "The Brussels Effect" (2020), in which she elaborately argues how the EU applies its market power to export regulation worldwide. The essence of the Brussels Effect is that compliance with European regulations and standards is inevitable for access to the EU's large internal market. Non-European companies and governments alike consequently have various incentives to apply EU(-inspired) regulation outside Europe as well, such as on competition law, consumer protection, and the digital economy.
Horizontal and vertical battles
In "Digital Empires", Bradford delves deeper into global regulation of the digital economy. She outlines the characteristic features of the three main regions: the free market-driven, hands-off model of the United States, the value-driven regulatory model of the EU, and the state-driven model of China. At first glance, these may look like clearly distinct blocs, but using a wealth of detailed examples, Bradford demonstrates that in practice, the patchwork of mutual interests, alliances, deals, and investments can be nuanced, complex, and contradictory.
She does so by distinguishing between different types of tech regulation battles. Horizontal ones, amongst the three power blocs themselves, but also vertical battles, between governments and tech companies within regions. Even "diagonal" battles can have significant impact, such as between American and Chinese companies and EU lawmakers. Refreshingly, Bradford also pays ample attention to the influence of these three paradigms in other regions. Africa, Asia, and Latin America have all to various extents been the subject of the US evangelizing global internet freedom, large-scale Chinese investments in digital infrastructure, and parliaments emulating (elements of) EU regulation in their own right.
Decoupling and digital ecosystems
In the horizontal battle, from a global perspective, a lot of focus currently rests on the increasing technological power struggle between the US and China. It is a core element of the broader decoupling of these two superpowers in their battle for global hegemony. Their ongoing digital economic disentanglement is undeniable, Bradford argues. But interestingly enough, this forces the US to uneasily embrace elements of the Chinese state-driven regulatory model: sanctioning and shielding Chinese infrastructure and investments are hard to reconcile with global free-market thinking. At the same time, the mutual digital interdependence – financial, economic, and also in terms of research and talent - between the two countries is so strong that both blocs constantly have to balance their desire for autonomy with the need to keep their digital ecosystems profitable.
Between the US and the EU, a diagonal battle has waged long between American tech companies and European regulators on issues including privacy, competition, and taxation. Big Tech has lobbied strongly against European rules, accusing the EU of protectionism due to its inability to innovate and scale (AI) technology on its own. Still, as soon as the dust of the legislative struggle for privacy settled, a company like Microsoft decided to conform globally to European privacy rules in the GDPR. But in terms of data exchange between the US and EU, a lengthy horizontal power struggle revolving around the balance between surveillance (US) and privacy (EU) keeps dragging on, with European judges regularly declaring transatlantic data exchange agreements invalid, sending officials and lawyers in Brussels and Washington back to the drawing board.
Techno-democracies and techno-autocracies
Despite disagreements on a variety of issues and levels, under the Biden-administration, additional communication channels were opened to seek transatlantic rapprochement on digital files. And the belief in human-centric technology regulation is no longer confined to Europe, Bradford argues. Faith in the American laissez-faire market-driven regulatory model is starting to wane, even in the US itself: a large majority of Americans now prefer strong AI regulation. Still, to what extent the EU will also have a "Brussels effect" on federal AI legislation in the US remains to be seen: not only is the sharply polarized US Congress incapable of legislating AI swiftly, but critics also argue that the effect might be much weaker in the context of AI seen to Europe's industry lagging far behind China and the US in the global AI ecosystem.
Notwithstanding economic leverage in AI, according to Bradford, the EU and the US have a much broader, ideological interest in rapprochement and cooperation. After all, they both are techno-democracies: only together will they be able to make strides in the global battle against techno-autocracy China and the dozens of countries already implementing its surveillance model as part of its sphere of influence. In doing so, the US and the EU must not only fight horizontally with China, but also show vertically that they, as democratic countries, can keep tech companies in check. The Chinese government has recently succeeded in doing exactly that with its own industry. And that raises the long-term question to what extent democracies, like autocracies, will be able to gain control over the digital economy, but then embedded within open, democratic societies.