How did the internet evolve from a relatively decentralized, hybrid, and democratizing space toward a concentrated, privatized environment controlled by a handful of actors? Re-imagining the digital economy requires looking back before moving forward.

Editor’s note: The current debate in economics seems to lack a historical perspective. To try to address this deficiency, we decided to launch a Sunday column on ProMarket focusing on the historical dimension of economic ideas. You can read all of the pieces in the series here.

At its inception, the internet was imagined as a decentralized, horizontal and open space that would foster freedom and equality. Today, it is a collection of walled gardens, a hierarchical ecosystem ruled by a few gatekeepers who leverage access to data, attention and infrastructural capability to enclose users and competitors in relations of dependency. The transition happened over the course of one, or at best two, decades. 

Why did the power of digital platform companies such as Google/Alphabet, Facebook/Meta, Amazon, and Apple emerge and grow so quickly without a regulatory response? An important reason is that the intellectual and material toolbox available to Western lawyers, policymakers, and thinkers is grossly inadequate to diagnosing and addressing harm and power formation in the information capitalist era. Harm itself often appears elusive, impervious to theorizing, and controversial. A question that arises, then, is why our modes of thinking and governing markets are so poorly equipped to address the felt erosion of basic human and collective needs in an increasingly digitalized society. Why have consumerism, addiction, polarization, and mistrust in institutions become pervasive and untamable parts of life in the 21st century? How have these problems become parts of the air we breathe, instead of exceptions to be ruled out?

Answering these questions and re-imagining the digital economy requires looking back before moving forward. How did we reach our current state? What factors shaped who we are as people, societies, the tools we have at our disposal and where we can now go? How did these factors shape the current context, and how might they structure our decisions regarding the future? 

In a recent paper titled “A Genealogy of Digital Platform Regulation,” I address these questions by tracing the origins and evolution of digital regulation from its early cyberlibertarian roots to contemporary debates around the governance of digital platforms. In particular, I consider how policymakers and legal thinkers’ ideas of freedom, law, power, and democracy in digital spaces have evolved, the fact that libertarian and neoliberal ideas have remained deeply ingrained in regulatory mindsets, and how these views continue to affect the way regulators think about and pursue solutions to digital power. 

The very centrality of ideals of freedom from restraint and individual empowerment in networks have facilitated the growth of platform power. Well-intentioned regulatory frameworks oriented around notice and choice, or antitrust’s consumer welfare standard, have led to widespread tolerance for monopoly rents and surveillance in digital spaces. To avoid reproducing platform power in new institutional and technical forms, awareness of how past utopias and aspirations have contributed to existing blind spots and structural problems is therefore key. 

The history of free software and the IP Wars of the 1990s and 2000s provides a good illustration of these path-dependencies around the meaning of liberty, law, and power throughout the period. In response to the rise in prominence of Unix, a proprietary system developed by Bell Labs, in the 1980s, free software advocate Richard Stallman and others began a crusade to liberate software from its proprietary ties. They created the GPL (“GNU General Public License”) a free open license that requires anyone reusing, buying or redistributing the software to comply with the freedoms granted by the original license. The free software movement later inspired a parallel movement to liberate content and creativity from copyright strictures. 

In an article titled “Anarchism Triumphant,” Columbia Law Professor Eben Moglen argued that free software represented the beginning of a shift towards a free-er anarchic digital political economy which would do away with most forms of private ownership. In a 1994 essay, Electronic Frontier Foundation co-founder John Perry Barlow argued that copyright law, which protects the material expression of ideas, had become obsolete on the internet, the “Home of the Mind.” Many of these ideas grew in opposition to the powerful interests of the time: against firms like Bell Labs producing proprietary software, against firms like AT&T controlling telecommunications and broadband, against Hollywood studios and music labels who sought to enclose and profit from creative digital assets. Yet many of these views also unconsciously built the intellectual, legal, and economic case for new forms of enclosure, those that were already being adopted by open platforms such as Google which would soon thrive on the distributed sharing of content by opaquely acquiring control over and monetizing attention and data. In disputes on who should win between Hollywood and YouTube, users were the ones ultimately left behind.

As Tel Aviv University Law Professor Niva Elkin-Koren put it, “[w]hat began as a controversy over the appropriateness of copyright law to accommodate … technological changes, became a political battle over the distribution of the potential gains that cyberspace offers.” 

These so-called “IP Wars” embodied institutional controversies on the stakes of the internet’s ecology and saliently illustrate confusions that are still with us today. For example, as Duke University Law Professor James Boyle put it, it was as if early cyberlibertarians “couldn’t agree on whether [their] motto was to be ‘Taxation is theft’ or ‘Property is theft.’” Their aversion for IP often hid faith in new forms of digital capitalism. Further, the rhetoric of freedom and anarchy underlying the IP Wars helped strengthen commercial interests and monopoly rents on the Internet. Visions of the internet as an apolitical laboratory of innovation, a frictionless space governed by individual choices took the center stage, ultimately facilitating the accumulation of digital control in the hands of a few internet gatekeepers. The move towards private and code-based governance opened the door to widespread and poorly regulated surveillance practices that remained disguised under the facial neutrality of code and cyber-economists’ efficiency-based arguments.

“These so-called ‘IP Wars’ embodied institutional controversies on the stakes of the internet’s ecology and saliently illustrate confusions that are still with us today.”

We can find similar political and philosophical ambiguities in today’s debates around platform governance. In the discussions around privacy and data protection in the EU General Data Protection Regulation, the California Consumer Privacy Act, the Virginia Consumer Data Protection Act and more, the focus on promoting individual freedom through data and privacy “self-management” remains dominant, allowing companies like Facebook to extract data relatively smoothly by asking users to opt-in. Until recently, the biases and inequities embedded in artificial intelligence and machine learning systems have been considered matters of private self-governance, with fairness and accountability framed as questions of compliance rather than public regulation and democratic deliberation. As regards content regulation, policy discussions, particularly in the US, are pervaded by the libertarian tendencies that underlie First Amendment jurisprudence, with an emphasis on voluntary governance schemes, including the Facebook Oversight Board.

These strategies for governing digital assets, platforms, and networks have had and continue to have limited grip when it comes to the most urgent questions we face today. Disinformation, polarization, distrust in institutions, structural inequality, addiction, environmental degradation, informational capitalism, and extraction are hardly solved through self-regulatory and compliance schemes, or through strategies that continue to hold the primacy of individual freedoms and the need to minimize state intervention in markets as sacred. 

Even public regulation moves bear the marks of cyberlibertarian path-dependencies. Data protection and privacy laws in Europe and the United States, seek—at best—to provide individuals with discrete guarantees and transparency rights, yet hardly question the structure of data markets and the systemic pervasiveness of the data-intensive surveillance economy. Fiduciary obligations tend to rest on unsupported assumptions about courts’ ability to police complex and opaque digital relations. Antitrust and antimonopoly law reform is promising, but the primary place still afforded to the idea of “competition” in autonomous self-regulating markets requires further unpacking. The EU Digital Services and Markets Acts Package (DMA) might look like a game-changer but is at risk of over-promising enforceability and long-term sustainability.

What to do, then? How to move forward? How to avoid the impending recurrence of past mistakes?

I suggest two starting points. First, let us avoid complacency about freedom, particularly assuming the centrality and primacy of individual freedoms over collective goods. The internet is a very good example of an ecosystem that evolved from a relatively decentralized, hybrid, and democratizing space towards a concentrated, privatized environment controlled by a handful of actors through the pursuit of libertarian understandings of freedom. These have for long obscured commercial and extractive dynamics.

Second, internet governance today is pervaded by a neoliberal ideology of individual preferences and efficiency maximization that is not only inadequate to tackling the most pressing questions of our time but also contributes to the systemic (and partly irreversible) erosion of fundamental human and ecological values. While the resulting harms often appear opaque and intractable, tackling them requires a shift in regulatory, philosophical, and methodological paradigms, starting from a move away from the sharp separation between the public and private interest as they relate to the governance of democracy and of markets, and toward an understanding of democracy and markets as co-extensive, rather than as separate spheres.

When asking how to regulate or govern the platform economy, scholars and policymakers too often start from the assumption that what exists is here to stay: existing platform monopolies, existing market imperatives of free competition, economic growth and exponential consumption, existing individualist or libertarian self-regulatory framings. Yet today’s problems are a consequence of past trajectories. Moving forward requires reframing the legal, moral, economic, and political questions of the future in more conscious value-oriented directions.

Disclosure: Elettra Bietti regularly volunteers consulting services to Privacy International, an NGO in London.

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