News

Regulating the Digital World

Today, we live in a digitised world in which we have new and more efficient ways to communicate, acquire knowledge, carry out research, read the news, shop, and stay entertained. The digital world offers new ways of exploring what has quickly become our new reality.

Following last March’s UK House of Lords Communications Committee report calling for greater regulation of tech companies and recommending a new adhoc regulatory framework, coupled with a novel Digital Authority to regulate the digital world, the EU Commission just released an announcement entitled ‘Security and trust in a digital world’. Appreciating the huge impact of the digital world on modern society, the Commission believes that new rules are necessary not only to protect competition in the EU market, but to ensure that our digital world is safe and transparent.

We often take for granted that digital platforms like search engines, social media networks and online platforms actually control our access to the benefits of digitisation by filtering what we see in this digital world and how we see it. As our window into the digital world, these platforms are extremely influential.  Through their own algorithms, they decide which websites and businesses to place at the top of their rankings. This ultimately determines what people are exposed to. With power comes the possibility of abuse of power. The commission highlighted that it is not rare for platforms to use their power to favour their own commercial interests in cases where they do not just run the platform, but also compete with other companies that rely on the platform to carry out business. When platforms tweak their algorithm to their advantage and to the detriment of their competitors, they negatively impact consumers. Two years ago, Google were fined approximately 2.5 billion euros for misusing the power of its platform to the detriment of its rivals in the market for comparison shopping.

The Commission also observed that all of these platforms rely heavily on obtaining and making use of our personal data. Data is extremely valuable for such platforms and can help them become more competitive through cost cutting or by gaining knowledge on consumer behaviour. Data also helps them to target digital advertising better. Digital platforms effect the way we see the world and understand our surroundings. Unless we are confident of the facts, we will not be able to make informed decisions. The commission believes that manipulating our access to the digital world can impair not only our markets, but even our democracy.

Thus, the Commission is set to closely monitor digital platforms and how they deal with data – how they collect it, and what they do with it. The Commission holds that it will be prepared to take action if it finds that such data is being used to undermine competition and hurt Europe’s consumers.

The Commission holds that it must also think about rules to regulate how data is dealt with. Our data protection rules give us control over our own data and allow us to determine how companies use it. However, data protection rules do not regulate how companies use other peoples’ data, which could be used to draw conclusions about consumers or to undermine democracy. Regulation is needed to establish the basic standards that companies must abide by when using data to the way companies collect and use data in a manner that does not harm the fundamental values of our society.

The Commission believes that “successful digitisation depends on having effective rules in place, to give people confidence that digitised businesses will treat them fairly.”

Article written by Dr Ian Gauci and Legal Trainee Gigi Gatt.

For more information or assistance kindly contact Dr Ian Gauci on igauci@gtgadvocates.com.

This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.