1 November 2022 – Online conversation
The event venue of MCC Scruton housed te two-day international conference titled Essential State Functions in Platform Regulation, that came to life as a cooperative idea of more professional organizations. The conference focused on the challenges, the opportunities, and the necessity of the legal regulation of online platforms in light of what essential functions might states have in this domain. The question is especially important in light of the fact that in Europe, EU-law contains a multitude of rules to improve its global positions in the sector and these obviously affect those legal rules that the Member States enact to regulate the operation of platforms.
It is undebated that states have a fundamental task to participate actively in creating rules for platforms and different media on the international and European level, and also realize and incorporate these rules in their respective national systems. In addition to this, in a functional approach, it should be subject to discussion how statehood manifests – in the context the lesser-known component of European ‘constitutional identity’ discourse, that of ‘essential state functions’ – in the age of platforms considering the adoption and enforcement of these rules. The plenary session will touch upon the following issues:
- What is digital sovereignty, if there is such a thing?
- How does it relate to supreme authority and to the regulation of the online marketplace of ideas, if at all?
- Among other similar questions, domestic and international literature and the partially or entirely public legislative proposals enumerate issues such as the many approaches to the definition of platforms, the extent of online freedom of information and that of media freedom, and the limits to their restriction.
All these obviously affect the broader interpretive context of digital democracy, and all those fundamental, essential state functions that states should be able and obliged to carry out.
In this approach, contemporary public opinion is largely thematized by different topics of content regulation. The panel dedicated to this field will examine questions raised by the deletion of user generated content by the platforms. Firstly, this represents a two-fold concern in terms of the practice: on the one hand, based on common European regulation that platforms shall decide on the issue of illegality, while on the other hand – beyond legal barriers – they may define and impose further requirements that limit the freedom of expression of users, while they also supervise compliance with these rules. Secondly, in addition to respecting freedom of expression, social media platforms have a responsibility in maintaining the adequate quality of democratic publicity, including the fight against misinformation, equal opportunities in electoral campaigning, pluralism of opinions, the comprehensibility of news affecting public life and counteracting filter bubbles. Thirdly, the European Digital Services Act (DSA) attempts to treat some of these problems in part, but leaves the fundamental operation of platforms unaffected, therefore the panel simultaneously deals with the possible benefits of the expected regulation as well as regulatory issues that remain to be seen for the future.
Beyond the DSA, looking at issues of platform regulation and state functions, it can be seen that the absence of competition among platforms could be considered as a root cause for a significant part of problems in terms of the challenges presented in consumer protection of competition law. In the past decade, the biggest players have concluded more than 400 such transactions, which were not subject to investigation by competition authorities, thus challenging the century-long established rules of fusion control. Tech giants face a dozen of competition investigations in front of the European Commission and national competition authorities, which emphatically points to the conclusion that competition law standing alone does not constitute a sufficient deterrent force against abuses of dominant market positions. Thus, both in the US and in the EU regulatory concepts superseding competition law have been adopted and should be further examined.
From the point of view of data protection, in relation to the above, the investigation and examination of online data processing is a key task of state data protection authorities, i.e. their priority. The Belgian authority recently declared the IAB Transparency and Consent Framework illegal resulting in a significant transformation of the market in this segment. The Austrian authority declared the use of Google Analytics illegal, tying its legality to at least such conditions that may with a great amount of certainty not be met in the future. The use of cookies is also in the forefront of inquiries, with the French authority fining Google and Facebook to 150 and 60 million euros respectively in the beginning of 2022 for unlawful use of cookies. The panel dealing with these questions intends to examine and process the “clash of civilizations” traced in the online sphere, and which can be described by the binary codes of legality-illegality (in the domain of user control, data transfers to third countries, positions of monopoly and resulting illegality). It is as if data processors used to a “Wild-West-like” state of affairs online would not be willing to give up their business positions until being forced to do so. But who will be able to do so, and if yes when and how?
Our conference on essential state functions in platform regulation (and any possible limits to these functions) intends to promote professional dialogue on the above-mentioned issues among the experts of the different fields.
In his keynote address, Prof. James Cooper, Director of the Economics and Privacy Program at George Mason University in Washington D.C. has demonstrated the process with the methodology of ‘law and economics’ that sheds light on how privacy-conscious people really are and how big a role privacy protection plays in individual decisions regarding the use of certain platforms. After presenting the social costs and benefits of privacy, he introduced the so-called “Privacy Paradox” and examined what kind of consequences could and should state regulators draw from the above-mentioned information when creating rules for platform regulation. Mentioning European examples, he inferred that regulators also have the choice to do nothing and decide to preserve the status quo. He presented many American studies and statistics justifying the assertion that increased legislation will result in the reduction of the social benefit of data usage and reliance on the achievements of digital innovation. This is against any benefit to consumers, who wish to make use of higher level digital services in their every-day life.
Dr. Balázs Bartóki-Gönczy, member of the Media Council of the Hungarian Telecommunication Authority presented the current status and challenges of the American and European regulatory environment in his field, and reflected on those legislative materials and proposals by European Member States that are noteworthy in the field of social media and as such have provoked significant debates in the Member States. In connection to the EU DSA, the Digital Services Act, he analyzed some practical problems and the list of national legislative duties, then tries to account for the possible essential state functions in platform regulation, framed by the title of the conference. As a precondition to any eventual regulation, he mentioned the necessity of creating transparency as to the operation of the platforms as a matter of principle, then concluded his keynote address by stating that the state has essential functions in protecting the market, the users and democracy, which shall be carried out through regulation.
First among the professional panel discussions of the two-day event was a panel on media- and content regulation, where academic experts talked about current European, Hungarian, Slovakian, as well as Anglo-American occurrences. Among these, issues of intermediary liability in the common law judicial experience were addressed through examples of numerous countries, as well as the legroom of the state to define disinformation or harmful content in terms of hybrid threats. Other lectures and discussions talked about such activities and roles of platforms that in essence are similar to essential state functions or replace those, and therefore their regulation is not or not exclusively considered such a state function.
The competition and data protection law panels were on the agenda of the second day, in which practicing attorneys, professional diplomats, former and current officials of regulatory bodies as well as civil society and academic experts (with backgrounds in law and economics) exchanged views on the topic. Our international guests arrived from Serbia, Greece and the United States to share with us their experience on the Digital Markets and the Digital Services Acts as regards the content and the possible future of the European legislation.
