A bit of democracy for the tech giants: Two ideas

Hans Gersbach 18 October 2019

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For better or worse, we contribute daily to risky monopolies. We use the products of the world's largest technology companies – Apple, Google, Microsoft, Facebook and Amazon. The more of us there are using them, the more useful they become to us. Several further aspects make this type of monopoly self-strengthening (e.g. Müller and Wambach 2018, Crémer et al. 2019). 

First, if an internet service like Google attracts more users, its search results become more relevant and its algorithms more refined, which makes it more attractive for individual users and thus for advertising companies – so that Google reaps more benefits. 

Second, many of the services offered by so-called tech giants are free of charge for individual customers, heightening incentives to join and use these services. The growing number of users allows the tech giants to demand higher prices for advertising on these services. Of course, the users pay for the services without noticing it, by watching adverts and by contributing to valuable databases.

Third, for those services and products for which we do have to pay, the positive network effects entail better products. As so many people use Microsoft products, for example, these products are more likely to be improved constantly, and the programming of any new (external) application will ensure it is compatible with Microsoft products. This, in turn, will attract more consumers and reinforce Microsoft's monopoly.

Fourth, although the tech giants also face competition for their services and products, their monopoly manifests itself in various forms. Amazon offers an amazingly wide range of products. This makes it extremely attractive to buyers and sellers, but also relegates competitors to ‘niche products’, on a smaller scale. Apple has built up such an impressive reputation for innovative, attractive ‘must-have’ design and the flair of innovation in functionalities that customers are practically addicted to its products.

Fifth, thanks to their economic power, tech giants can buy competitors and innovative startups, or discourage them, and while a few years ago we were using Tech Giants by choice, we are now trapped into using them for want of equivalent alternatives. 

Risks for democracy

Thus, tech giants can become an economic threat – a monopoly generally entailing higher costs and limited choice for users/buyers in the long run. What’s more, democracies also incur risks at a political level, as the tech giants control important information processes, which are the basis for collective decision-making. Information verification, information storing, access to information, information comparison, information weighting and information disregard – all are monitored by the tech giants and can be a threat to democracy, while seemingly promoting it.

Facebook is a good example of this duplicity and the challenges it entails. In a first phase, it advertised itself as promoting democracy – all opinions were to be considered equal and were given the same chance of being acknowledged, discussed, and promoted. Such was the argument against the monitoring of contents. When it became evident that this equality promoted anti-democratic forces and benefitted destructive, anti-social groups, the necessity for some kind of control and intervention led to a type of monitoring that came dangerously close to censoring. The middle course is still to be defined. It has to be free speech, with some dangerous areas and defamatory entries censored, for instance. 

What to do?

Many solutions are currently discussed and there seems to be no easy way to deal with the tech giants, even if standard tools of competition have been applied successfully (Caffarra et al. 2018).2 Breaking up the tech giants that offer many services might help, but may merely lead to new giants. And even if regulation had supranational force – and were effective as globally as the tech giants – it would still have to keep pace with the tech giants' speed of innovation. In particular, time-consuming deliberation and decision processes render democracies far less able to monitor the tech giants' monopolies than non-democratic countries like China. 

The best way to monitor the tech giants is via the "currency in which customers buy services" – the personal data (Economist 2018). Such control could operate in two directions. First, one could develop specific supranational laws governing the ownership and exchange of data and monitor the tech giants through these laws. Yet, such a legal system might be costly and too slow – again. 

But the monitoring could also happen the other way round, through democratisation instead of coercion. Our idea is to find solutions in which the tech giants and users play an active part. We develop new collective decision procedures that can be used for experimenting, and our monitoring problem with the tech giants would be an ideal field for experimentation (Gersbach 2016, Gersbach et al. 2019). 

We suggest letting users participate in matters that are crucial for them. This might not be equivalent to an ideal supranational regulator, but would still balance the shareholders' power to some extent. Users generate valuable data when using the tech giants' products, enhancing and sustaining the services offered, so the tech giants should let them have a say in important decisions.

The first challenge is to know on which decisions the users should be consulted – it might be reasonable to start with important decisions of the shareholders that affect users' right to their shared information. Moreover, users should have a say in general specifications of search and learning algorithms, for instance, and on censoring rules. The second challenge is how to organise user participation. We present two user access ideas for this challenge.  

Solution one: Co-voting

One possible way to include users in important decisions is simply to let them vote. One suitable procedure is co-voting. Under this procedure, a randomly selected representative subgroup of all users is formed – an ‘assessment group’. In a fully-fledged version of such a decision process, the assessment group would vote first and the result would be made public. The decision would be aggregated with the subsequent decision of the shareholders or their delegates on the board of directors to yield the final decision. The two group decisions – users’ and shareholders’ – could be weighted according to a pre-defined key. This way of ensuring users are represented and allowing them to have a say in any important decisions would certainly change these users' attitudes towards the tech giants – they might even be able to better accept and support a difficult or costly decision. In turn, such involvement of users might help to protect the data-ownership rights and ensure that algorithms respect free speech, as well as other desirable properties of information provision and dissemination. 

Of course, co-voting requires an assignment of voting rights to users. The simplest way would be to grant one vote per user. Yet, a more refined voting right system might be to increase a user's voting power with intensity of usage. 

Several variants of the basic voting procedures are conceivable. For instance, the voting process could take place not sequentially but simultaneously, with the two decisions of the shareholders and the assessment group – suitably weighted – yielding the final decision. 

Of course, one immediately reflects on the real-life application of such procedures, or asks who would then be allowed to design the proposals that are put to vote, i.e. who would decide when co-voting would be triggered. As to the many practical aspects of the process, they are beyond the scope of this post.

Solution two: User councils

A second possible solution is user councils. Various possibilities exist for how co-determination can be structured in such cases – by assigning rights to the user council, structuring negotiations between the council and the Board of Directors on relevant matters, or by delegating council members to the board of directors with direct decision power (see Gersbach 2019 for further elaboration). User councils and their representation on the board of directors would allow the delegation of users who are experts for the algorithms driving the services of tech giants. Of course, the user council can still draw on the user pool for particularly important decisions. 

Conclusion

The democratisation of tech giants alone will not reduce their monopoly, but it might rebalance the market by giving users some degree of decision power within this monopoly. If their monopoly is not endangered, the tech giants might be willing to share some of their power with users by including them on key decisions. This might be more efficient than bridling tech giants with regulations that cannot keep up with technological advances. 

Lessening the tech giants' power to shape communication and data handling by including new democratic processes in their decision-making – what a great field for experimentation and what a promising outlook for democracy! 

Author's note: An extended version of this column will be published as a CER-ETH Working Paper titled "Democratizing Tech Giants! A Roadmap".

References

Caffarra, C, O Latham, M Bennett, F Etro, P Régibeau and R Stillman (2018), “Google Android: European "Techlash" or Milestone in Antitrust Enforcement?”, VoxEU.org, 27 July. www.voxeu.org 

Crémer, J, Y-A de Montjoye and H Schweitzer (2019), Competition Policy for the Digital Era: Report, Publications Office of the European Union. 

Economist (2018), “How to Tame the Tech Titans”, 18 January.

Gersbach, H, A Mamageishvili and O Tejada (2019), “The Effect of Handicaps on Turnout for Large Electorates: An Application to Assessment Voting”, CEPR Discussion Paper 13921. 

Gersbach, H (2016), “Co-voting Democracy”, Economics of Governance 18(4): 337-349.

Gersbach, H (2019), “Democratizing Tech Giants! A Roadmap”, CER-ETH Working Paper (forthcoming). 

Müller, C and A Wambach (2018), Digitaler Wohlstand für alle, Campus.

Endnotes

[1] Crémer et al. (2019) describe how competition policy could be reshaped in the digital era.

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Topics:  Competition policy

Tags:  tech giants, monopoly, data rights

Professor at CER-ETH - Center of Economic Research at ETH Zurich and CEPR Research Fellow

CEPR Policy Research