Taming digital capitalism, what's the answer?

 To effectively address the challenge of digital capitalism, a multifaceted approach is necessary, encompassing regulation, anti-monopoly actions, enforcing interoperability, and localising infrastructure. Current efforts, particularly those by the European Union and the United States, offer useful case studies in both ambition and limitations of current efforts to tame digital capitalism.

US approach

The United States has taken various steps to regulate the technology sector, focusing on limiting the power of big tech companies through antitrust investigations, privacy laws, and legislative proposals. These efforts aim to address concerns over monopolistic practices, protect consumer data, and promote competition and accountability within the tech industry. Agencies like the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have started to scrutinise corporate behaviour, with a keen eye on mergers, acquisitions, and practices that threaten consumer rights and market fairness.

Additionally, there's a push towards more robust regulations on data privacy and the ethical deployment of emerging technologies, reflecting a broader desire to ensure that technological advancements serve the public interest without compromising individual rights.

Contrasting these regulatory attempts with discursive critiques offered by progressives such as Elizabeth Warren reveals a deeper lack of analysis regarding the challenges in curbing Big Tech's influence.The issues with Big Tech are not solely due to monopolistic practices, regulatory missteps or lack of enforcement but are also deeply intertwined with the global capitalist system that is both financialised and militarised. The dominance of Big Tech is closely linked to the interests of Big Money (like Wall Street and investment giants) and the Big State (including the Pentagon's defence needs and the NSA's surveillance operations), creating a triad that perpetuates the status quo.

Regulatory focus within the U.S. misses the global economic and political dynamics that fundamentally drive the necessity for large tech firms. These companies are seen as essential not just for economic returns but also for maintaining America's geopolitical power, especially in light of competition from countries like China. Consequently, any meaningful attempt to reduce the size and power of Big Tech would also require addressing these broader systemic forces, a daunting task that challenges the very foundations of America's role in the global order and its strategic interests. In reconsidering the regulation and future of technology, it's pivotal to transcend the "big tech vs. small tech" binary, focusing also on the distinction between corporate and non-corporate technology.

This shift recognizes that the core issue isn't the size of tech companies but who controls the digital infrastructure—sensors, networks, data, and services—that underpins our society. In this context, technology should be understood as a public good, managed and governed in ways that promote inclusivity, democratic participation, and the protection of personal and communal sovereignty over data.

European approach

The European approach to digital sovereignty offers a critical perspective on the effectiveness and limitations of the European Union's attempts to carve out a "Third Way" in the realm of digital capitalism between the laissez-faire approach of the United States and the state-centric model of China. This approach is manifested through efforts to regulate the digital market, protect data privacy, and promote fair competition.

Firstly, it involves establishing a legal and regulatory framework for what is termed the Digital Single Market—a vision of digital capitalism delineated by the political and ethical parameters of the EU, significantly shaped by lobbying groups in Brussels. Secondly, aware of its inability to compete with the US and China in economic and technological terms directly, the EU is leveraging soft power to propagate its digital economy vision through supranational regulations, including public and private data management, communications, taxation, and labour conditions. These initiatives aim to set international standards in privacy, AI ethics, and digital rights, thus highlighting the battleground over the legal, political, and discursive foundations of the digital economy. Lastly, the EU aspires to a qualitative leap in its production model through the green or digital industrial transformation, striving to preserve sovereignty while adhering to market principles.

Nonetheless, the European Union's attempts to regulate the digital economy and contend with the dominance of tech giants such as Google, Amazon, Microsoft, Facebook, and Apple reflect a strategic ambition fraught with inherent challenges. Despite the establishment of a legal and regulatory framework designed to define a Digital Single Market, these efforts have been insufficient to curb the entrenched power dynamics that favour these corporate behemoths. These companies for example have spent €21 million on lobbying activities in Brussels to influence the adoption of key regulations such as the General Data Protection Regulation (GDPR). They have fought to block the ePrivacy Directive, delay new competition rules, and to undermine and weaken the contentious Digital Services Act. This underscores the significant hurdle of corporate influence in policy-making, which undermines the potential for a socially cohesive Europe. Let's recap how this played out.

First of all, the GDPR, while setting a global precedent for privacy rights, highlights the EU's attempt to wield soft power in governing the digital economy. However, the prospect of achieving greater economic autonomy appears dubious, given the United States' reluctance to develop a federal privacy regime akin to the European model.

Furthermore, the lack of transparency inherent in the business models of tech firms—exemplified by the "black box" nature of algorithms—pose enormous obstacles to truly effective community regulation. Can regulation, no matter how ambitious, exercise any real oversight over capitalist tech firms driven by the extraction, monitoring, and manipulation of user behaviour?

Moreover, European tech companies' reliance on American computational capabilities and technology for competitive operation reveals a dependency paradox. While the EU may curb the most atrocious practices of companies, it fails to address the fundamental issue of European firms operating within ecosystems dominated by these tech giants. This dependency underscores the limitations of fines and the pursuit of "national champions" as solutions, suggesting that a more radical approach akin to China's might be necessary to dislodge Silicon Valley's grip on the European market.

Thus, the European Commission's proposals, which primarily demand transparency requirements for online advertising without imposing substantive restrictions on the practices themselves, reflect a critical problem: the current regulatory framework does not sufficiently challenge the monopolistic control exerted by foreign tech giants over the means of production and consumption in the digital economy. 

In conclusion, Brussels' ambition to foster greater competition in hopes of nurturing European tech giants is fraught with issues. First, it arrives a decade too late after US and Chinese corporations have already reorganised their production processes and secured irreversibly dominant positions. Second, it has triggered intense intra-corporate conflict within the European Union with firms engaging in mergers between massive conglomerates and by purchasing or acquiring other companies, thus consolidating the monopolisation of the means of production in the digital age, and directly or indirectly eliminating smaller competitors, such as small and medium-sized enterprises (SMEs). For instance, in the first half of 2018, nearly three trillion dollars' worth of corporate mergers were announced all over the world, driven by fears of Silicon Valley's ambitions across virtually all markets. Four of the top ten merger or acquisition deals were conducted in response to the intense competition from US tech firms (Google, Amazon, Facebook, Apple and Microsoft), who to date have made 825 acquisitions.

This situation underlines a stark reality: the driving forces of capitalism, the unrelenting quest for profitability by firms, and the brutal competition among all system actors (especially among nations) have placed the European Union at a serious crossroads. To secure and even enhance the well-being of its citizens, the EU must move beyond models based on corporate confrontation. Considering the limited public budgets of most countries, it's unrealistic for any innovation policy to rival the R&D spending of the biggest Chinese and American firms. The leading five firms in Silicon Valley alone allocate around $52 billion annually to R&D. With the global markets and users under their substantial influence and control, the notion of displacing these companies is impractical. 

The most effective approach involves redefining the relationship between Europe and the Global South to focus on digital internationalism and cultural and social cooperation, rather than on trade or economic frameworks. This relationship should be grounded in science and knowledge, utilizing open access technologies and other tools to explore new, more planetary ways of self-organisation that move away from market-driven models. This strategy calls for a significant overhaul of the EU's digital policy to prioritise collaboration and solidarity over competition and extractivism, aiming to build a digital economy that is robust, inclusive, and capable of countering the influence of tech behemoths and defending basic digital needs and rights.