Technology regulation: time to get smarter and think ahead

Policymakers need a principles-based approach to have first mover advantage, argues corporate lawyer and author Casper Jaspers

Casper Jaspers Image courtesy of the author

Like it or not, technology has a profound impact on our lives and our society. Resisting technological progress is futile and does not make sense given the enormous benefits societies have gained from it. But what we should do is steer the direction of progress so that it benefits society as whole. It requires lawmakers to think ahead and adopt a more dynamic form of governance.   

The power of Big Tech 

Open any newspaper from the past five years and you are likely to find an article about the regulation of technology companies. The power of Big Tech and its influence over our lives have grown substantially. To a large extent, these private organisations and their shareholders determine the direction of technological developments.  

But they seem to struggle, to say the least, with the responsibility that comes along with that power. For years Facebook refused to moderate content, arguing that censorship was at odds with the right to freedom of speech. Workers in the gig economy, such as Uber drivers and Deliveroo riders, often eschew fundamental benefits like holidays, pensions and minimum wage. Algorithmic decision-making systems are deployed in the real world without proper testing. Amazon's hiring algorithm discriminated against women and a commercial prediction algorithm used in hospitals to identify and help patients with complex health needs resulted in spending less on black patients than on white patients, even if they were just as sick.  

The problem with the current approach  

Private companies’ track record of taking society’s interest into serious consideration is disputable at its very best. So, we need policymakers to get smarter when regulating technology companies. The current approach of specific rules and litigation is like trying to plug the leaks as they spring up. 

Lawmakers are reactive and often regulate the previous crisis. Another problem is that democracies require a lengthy legislative process that cannot keep up with the pace of technological development, so by the time a law comes into effect it is likely outdated. Data protection laws were only proposed after serious breaches and GDPR is already outdated according to Axel Voss, one of the fathers of the regulation. 

Anti-trust cases have been filed against every Big Tech company, but these take years of prepare and even longer to go to trial. Google’s case, for example, was filed in October 2020 and is set to go to trial in September 2023.  

The importance of thinking ahead 

To regain first mover advantage, we should think about a new governance framework. This starts with looking ahead; it is not about where we are now, but where we are going. What do we want our society to look like in five- or ten-years’ time? And how can technology help to achieve that?  

Let’s take the impact of automation on our work. What part can be automated depends on which study you read, but estimates range from 9 to 47 per cent. That is the difference between a minor problem and a major crisis. Government faces a choice: do we want people to have 'work' or 'income'? Choosing work means policy aimed at lifelong learning, retraining and perhaps government sponsored jobs. A choice for income most likely means changing the tax system and providing a basic income to citizens. Whichever way you want to go, you must make a choice in time. 

A new principle-based approach  

Instead of plugging leaks, a more fundamental rebuild of the underlying infrastructure is needed. If governments want to avoid playing catch-up, regulation of developments in technology and of the new business models that arise from them requires a more principle-based approach. I am not reinventing the wheel; many corporate governance codes and a large part of the financial regulation are based on principles. Principles combined with soft-law instruments such as guidelines, certification, best practices and stakeholder dialogues may offer an ideal compromise because they create anticipatory forms of governance that allow for protection of the public interest without stifling innovation and imposing hardship on entrepreneurs.  

Generally, it takes time for society to recognise harmful effects and put specific rules in place to preserve things that matter. The principles are ex-ante goals set by policymakers that industry players should meet, and can be held accountable for, during the time that specific regulation is not yet feasible. 

In the best-case scenario, these new principles prompt, and are the result of, a public discussion on ethics and the outcomes we value as society. They should reflect the broad strokes of the direction society would like to take.  

The principles are a type of regulation: rules designed to control behaviour. They are best supplemented by a governance framework, which is about collaboration, collective stewardship, sustainability and acting on common interests. Good governance of technology is not the job of government alone. But if governments do not take the lead, it will ultimately be private companies that make choices for us. 

Casper Jaspers is a corporate lawyer based in Amsterdam and author of Technology and Governance - Making technology work for society. More information is available here

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