The Governance of Data by Big Tech Companies Between Public Regulation and Private Powers

The event, funded by the governmental program PRIN 2017,^[1] represented the final part of a research project conducted by Prof. Graziella Romeo (Bocconi University) on the opportunity to merge competition law and constitutional law based on the mutual and ambivalent relationship these two branches of law entertain with State power. Prof. Romeo’s intuition can be understood by bearing in mind that both competition and constitutional law are, on one hand, interested in controlling and delimiting State power and, on the other, deemed to accept it as a fundamental as well as necessary element. To further expand on these premises, the Bocconi Faculty of Law invited as guest speakers Prof.s Inge Graef (University of Tilburg) and Anna Tzanaki (Lund University).  

The power of Big Tech companies and the need for further public regulation

Prof. Graef pointed out how digital platforms are increasingly acting as private regulators – a trend that carries many risks for market control. Indeed, by gaining increasing shares of market – and, thus, power – Big Tech companies are in the position to arbitrarily set terms and conditions without fearing any retaliation on consumers’ and competitors’ side. As a result, competition is adversely affected. Not to mention the impact their services have on fundamental rights such as, in particular, privacy. In this regard, Prof. Graef cited some recent case law where it is evident that Big Tech companies have a great impact on determining what is the minimum standard of privacy that has to be respected in order to be part of the market: hiQ Labs, Inc. v. LinkedIn Corp (2019) and Epic Games v. Apple (2020) are clear examples of this.^[2]

Therefore, in a world where corporations are replacing the legislator’s work in setting minimum fundamental rights standards, concerns arise on whether they are doing this not in name of the common interest – which is the ultimate goal pursued by democracies - but rather in their own self-interest. Should this be true, who can guarantee that Big Tech companies, under different circumstances, would abide by their previous standards and not change them according to what is temporarily more convenient?

As a consequence, public regulation is clearly necessary because establishing a minimum common standard would prevent companies from choosing it themselves, this resulting in a claim of protection of fundamental rights that in reality masks an exclusionary behavior. The legitimacy of any standard going beyond the minimum should be appreciated in relation to its necessity and proportionality, always bearing in mind a case-by-case approach.

The problematic lack of democracy in digital markets

Prof. Tzanaki’s speech, instead, was more focused on the connection between markets and democracy and on their so-claimed symbiotic but unbalanced relationship, as democracy needs markets, but markets don’t need democracy to properly function. In this context, Prof. Tzanaki analyzed the challenges represented by the pervasiveness of digital platforms. In particular, the interplay between markets and democracy is made even more difficult and tricky by the rise of these new platforms, as they have a dual nature: they are both an economic marketplace and a political forum. In this respect, they have a hybrid structure, in the middle of market freedom and de facto hierarchies at whose top are placed owners of abundant data, who, by virtue of their position, can easily set regulatory norms. 

Digital platforms are redefining the role markets and law will play in the future. While the first ones have the mission to safeguard civil and economic liberties and private rights against State power as well as promote economic growth and innovation, the second will keep on supporting property rights and, at the same time, enforcing ex-ante regulation, required to keep this new phenomenon under control. However, one thing is for sure: given their relevance, not only under an economic but also socio-political perspective, digital platforms cannot be ignored by the legislator. It is crucial to re-establish the broken link between digital markets and democracy, for example via a multilevel/multistakeholder governance able to make Big Tech companies fully accountable of their actions.

[1] The program PRIN (Progetti di Ricerca di Rilevante Interesse Nazionale) is sponsored by the Ministry of Education and provides funds for university level research projects. 

[2] In hiQ Labs, Inc. v. LinkedIn Corp., the Ninth circuit held that selectively banning potential competitors from accessing and using data that is publicly available could be considered unfair competition. As a result, LinkedIn was prevented from denying hiQ access to LinkedIn's publicly available LinkedIn member profiles. In Epic Games v. Apple one of Apple’s main arguments against Epic Games’ allegations of unfair conduct was that its policies protected security and quality of the App Store and the privacy of its users.