Book Review – Digital Policy in the EU: Towards a Human-Centred Digital Transformation” by Werner Stengg
Werner Stengg’s formal position sounds modest: He is a „Cabinet Expert“ in the European Commission. Yet, Stengg, a Commission official since 1996, is one of the masterminds behind European digital regulation. In his career he oversaw many important portfolios in the digital realm. Over the past five years, he was in the core team of Executive Vice President Margrethe Vestager, dealing with basically everything (but competition policy). Stengg has written a book – rarely enough for an active member of the Commission staff – setting out his vision of digital policy. So what does one of the key policy makers in the EU really think? Jasper van den Boom read Stengg’s account.
What do Luke Skywalker and the European Commission have in common? The short answer, as shown by the quote hereunder, is that they are both engaged in an existential battle for what they believe is right.
“The history of the internet resembles the worrying evolution from promising young Jedi Anakin Skywalker into Darth Vader: originally hailed as a powerful democratic tool that decentralises information and power, the internet has triggered certain business models and technologies that are prone to being abused for manipulation and discrimination” – Werner Stengg.
This is just one of the many questions answered in the new book “Digital Policy in the EU: Towards a Human-Centred Digital Transformation” by Werner Stengg, published by Edward Elgar. The newly published book provides a unique perspective on the role of technology in society and the policies surrounding them. Stengg’s experience as a policymaker, intertwined with philosophical insights and his personal ideals, paint a vivid picture of how digital technologies have been integrated into – and shape – human behaviour and our perception of the world. This is exemplified nowhere better than in Stengg’s flow-chart, where the ability to reason leads to speech, speech leads to writing, and within a few steps this evolution ends with big data analysis. These analyses, in turn, feed back into how we discover, write, and speak.
The book does an amazing job in reflecting both Stengg’s and humanity’s relationship with Big Tech and technology in general: we love the benefits for individuals yet worry over their impact on society as a whole. This relationship is again far from new. The book looks back all the way to the agricultural revolution to explain how it laid the fundament for modern society, but also led to shortened life expectancies and rises in illnesses (at least temporarily). Societal progress, it seems, inherently comes with turbulence and unintended side-effects.
The Story of the Internet
Stengg, an Austrian with a PhD in economics, recounts the story of how the Internet became what it is. The book provides a detailed account of the emergence of the internet and the beliefs held in the 90s that the internet would democratise everything, as well as the belief that the promises of the internet should be harnessed through (careful) regulation. For a long time, pro-innovation, pro-competition, and anti-regulation voices captured the debate on internet technologies. The book quotes Bill Gates, who stated in 1999 that “the Internet is becoming the town square for the global village of tomorrow” and how many others agreed that universal access to information and the possibility to express oneself freely would take individual and collective freedoms to a higher level.
Regulations were aimed more at facilitating new business models and ensuring secure transactions than they were at mitigating societal harms and externalities. Stengg puts this in perspective: in the 90s and early 2000s, there was no promise that the internet would be as big as it is. Many people still distrusted the internet as a means of concluding transactions. There was also still a lot of speculation about how information would be hosted and disseminated through the internet. The E-commerce Directive helped to create trust on both the side of buyers and platform operators. That the immunity granted in the Directive would later come to bite us was not yet in the field of view. As the book explains, prominent thinkers of the 90s such as Molly Ivins (1944-2007) speculated that, as the internet knows no gatekeepers, this would inevitably lead to a whole lot of bad information on the internet. This misinformation would however “sort itself out over time”, even in the absence of gatekeepers. Ivins, and many others, had not anticipated gatekeepers to both emerge and actually facilitate the sharing of misinformation to make it go viral.
The book sketches a picture of the cautionary tale of the frog in the boiling pot: a frog will not jump into boiling water but will sit still if the water is heated to the boiling point. Early laws related to the internet did not want to disturb the pace and potential of the emerging economy. Regulation helped the the internet economy to grow, and as it did so did large digital firms. With the process of platformisation and the emergence of large digital firms, consumers were lured into the proverbial warm bath of lower prices, increased geographical reach, high quality services, and new technologies. Over time, despite some warning signs, it became more difficult to decide when the water turned too hot for comfort. Now, with the emergence of Artificial Intelligence, we may just reach the boiling point. Stengg mentions the same warning a number of times throughout the book: AI may create a threat of extinction for humanity, with risks that are on par with nuclear war. The question is then, can we still stop the pot from boiling (and save ourselves in the process)?
A Story Turned Brutal
Stengg describes the downsides of modern digital markets in detail: high levels of market concentration, dependencies, intrusive data policies, misinformation and disinformation, and risks to democracy and society. Digital platform operators turned gatekeeper, and became increasingly able to decide on how the digital transformation took place and how value is to be allocated as a result of this transformation. This great power invites great responsibility, that large platform operators did not always willingly take. Consequently, the once lenient approach to regulating had to make way for far-reaching regulation in different aspects of the digital economy. And so, the wheels of Europe’s regulatory machine started turning. Stengg, perhaps unlike any other, provides an impressive and unique insight into EU’s efforts in the area of digital regulation.
The analysis of EU regulation covers an incredible array of regulatory areas (DMA, DSA, GDPR, AI Act, E-commerce Directive, Copyright Directive, the European Media Freedom Act, etc.), as well as guidances, communications and declarations. Stengg explains not only the content of these regulations in great detail, but also explains why they turned out the way they did. For example, Stengg notes that the threshold of 45 million users in Article 3(2) DMA is not based as much on any objective reason, as that it’s been chosen as it is 10% of the EU population. Finally, and related, the analysis by Stengg expresses a feeling of “why we chose”, rather than “what the law became”. Academic analyses, usually, look at the way towards a law in a passive voice, taking the role of observer. The infused policy experience of Stengg creates a narrative in active voice, even if the author was not involved in all of these areas of regulation or debates himself.
The majority of the book deals with where we are and how we got here, and how the Commission responded to a shift in paradigm. On occasion, the book reads as an attempt to justify certain choices. In others, one can see that there is pride in the work the Von Der Leyen Commission has done in the area. Overall, the account seems an honest reflection of the views and beliefs held by Stengg and his peers.
How the Story May Unfold
The final chapters of the book are forward-looking: now that we know all these adverse effects of concentrated digital markets, what are we going to do about it? One observation here is that markets do not offer a mechanism to promote equity and fairness, so that this falls on the regulator. There are many open questions still: how does a regulator protect equity, fairness, and fundamental rights? How does Europe prepare for a digital future? How does a regulator achieve this, and can one do it alone? The answers to these questions are, unsurprisingly, complicated.
Stengg attempts to formulate a vision on all the complex and cross-disciplinary matters described throughout the book.
First, he emphasises the need of coordinated efforts between the regulator and the regulated: only through co-regulation can we ensure that the regulatory measures are up to date and suitable. This means that the ones who inflicted the harm also take responsibility for solving it. The discussion of the Code of Conduct signed by a number of social media platforms shows that the relationship between hard law, soft law, and voluntary initiatives is not simple. The DSA is used as an example on how to turn good practices into binding law, as self-regulation carries too much risk of falling short.
Second, there is a responsibility at the individual level that is intertwined with the responsibility of governments. We as people must be aware of online risks, yet for this it is important to educate the people to ensure they have (at least) basic digital skills. The responsibility to educate the general population to instil some level of digital literacy remains with the government.
Another refreshing idea expressed in the book is that regulation can be used to crowdsource monitoring: The DSA includes a provision (Article 40 DSA) to grant researchers access to data. With this data, academics can help to identify and flag problematic behaviour by the regulated firms. As Stengg puts it, this provision allows researchers to “align their academic curiosity with the interest of democratic societies”. Such a system only works however if the access to data is adequate and this, again, depends in large part on the regulated firms and the ability of governments to intervene.
Finally, there is the idea that granting users increased control over their data will help them to exercise their rights and protect their autonomy. Here, Stengg engages in an interesting analysis of the promises (and failures) of data portability rights granted under the GPDR, as well as increased data rights granted under the Data Act and Data Governance Act.
A Plot-Twist in the Story
The final chapter of the book entails a list of things that we need for a human-centric digital economy. Yet there is a bit of a plot-twist that likely goes back to the love-distrust (or even hate?) relationship described at the start. Stengg discusses three pillars of the way forward: a value-driven strategy, a comprehensive data strategy, and a trustworthy AI strategy. Each of these strategies seem to focus on harnessing and expanding the role of digital technologies, despite the associated risks and problems that must still be resolved.
Starting with the data strategy, Stengg describes how we actually need to develop a data economy, increase trust of users in data sharing, and give access to more firms for data. This allows for innovation and value creation in a level playing field, if the right innovators are protected.
On Artificial Intelligence, Stengg does not argue in favour of an “innovation stop”, as referenced multiple times in the book. Instead, Stengg favours the development of trustworthy AI that is subjected to rules and reporting obligations.
The third pillar is the least surprising, emphasising the need for Europe’s (digital) independence. One interesting remark here is that we can no longer view industrial, green, and digital policy as distinct from one another. This is most certainly true, but reconciling the pursuit of all at the same time will inevitably lead to friction.
Overall, the final substantive chapter of the book ties back into the start: we may not love everything about digital markets, and there is much to hate about what we have now, yet ultimately we cannot escape the train of progress that pushes ever forward. There is no opportunity for Europe to go backwards, nor should there be a desire to do so, we must simply try to keep the train on the track as it goes. One possible critique of the book’s conclusions is that, after the analysis running up to this point, one would expect further reaching or more fundamental suggestions. However, it seems consistent with Stengg’s message that meaningful change often happens incrementally. In Stengg’s experience as a policy maker he sees that the paradigm shift has happened, and expresses the belief that Europe is on the right track for regulating digital markets. The book concludes with ten takeaways, the last of which makes for a great final lesson: “the future is happening now”, and we must (all) take responsibility.
This book is a fascinating account of an insider with a horizontal view of digital policy. For academics, the book is a call to action and an invitation to step beyond the scope of one’s usual research. Moreover, it is a great reference work: We all have things that we are sure have happened but cannot recall the source for. The book by Stengg is likely to reference them in one or two places throughout its historical account. Ultimately, it raises anticipation about what the Commission will do next, and how the rest of the world will respond. While the book does not really involve personal anecdotes, it certainly helps to understand a man who will most likely keep playing an important role in this.
Werner Stengg: Digital Policy in the EU – Towards a Human-Centred Digital Transformation, 2024, Edward Elgar, ISBN: 978 1 03533 863 4, 330 pages.
