Competing Regulatory Approaches Governing the Digital Economy Explored in International Business Law Lecture
The 2024 Brooklyn Lecture on International Business Law, held on March 4, examined the compelling book Digital Empires: The Global Battle to Regulate Technology (Oxford University Press, 2023), presented by its author, Anu Bradford, Henry L. Moses Professor of Law and International Organization at Columbia Law School.
Digital Empires explores the U.S., European Union, and Chinese models of governing the digital economy, their competing visions, and how governments and tech companies navigate the inevitable conflicts that arise when these regulatory approaches collide in the international domain.
The event was moderated by Professor Robin Effron, Dean’s Research Scholar and Co-Director of the Dennis J. Block Center for the Study of International Business Law, which sponsors the annual lecture.
The premise behind the book, Professor Bradford said, “is that there is increasingly a global consensus that technology needs to be regulated, but there is no global consensus on what that regulation should look like.” She detailed the American market-driven regulatory model, the Chinese state-driven model, and the European “rights-driven model.”
While the American model, she said, focuses on free speech, free internet, free-market incentives to innovate, “the governance of technology is basically handed over to the tech companies themselves. It is a techno-optimist, techno-libertarian view.”
By contrast, the Chinese model, she said, “is focused on making the country a technological superpower and is prepared to employ state resources to meet that goal.” Yet, she added, the Chinese government also deploys technology as a tool for surveillance, censorship, and propaganda.
The Europeans, Bradford said, “have pioneered a third way, resting on the notion of a human-centric digital transformation, which emphasizes the transfer of power away from large digital platforms to smaller companies and individual users, and a fairer distribution of the gains from the digital economy.”
Bradford refers to these models as “empires,” both metaphorically and conceptually, she said, because they are not confined to the jurisdictions themselves. “They are proactively exporting their respective models, and in the process expanding their sphere of influence.” For the U.S., that entails tech companies’ products and services; for China, the infrastructure of networks and surveillance technologies, along “the digital Silk Road”; and the Europeans “exerting unilateral power over global regulation.”
The battle over which model will prevail, Branford said, involves both “horizontal” conflicts between the empires and “vertical” battles within their own territories. Her prediction: The world is moving away from the U.S. market-driven model and desires more regulation, which the European-style model offers. Yet, Bradford posited, that model may be “fundamentally incompatible with innovation.” The Chinese model has excelled in infrastructure development and innovation, she said, yet “if you choose to follow China, what you get is control.”
“The biggest battle is about the future of democracy, if the U.S. and EU lose the horizontal battles to China,” Bradford said, in concluding. “And if the U.S. and EU and the liberal allies lose the vertical battles to tech companies, that also might happen. This country is basically unable to legislate. So, unless we can show that there is a liberal democratic model that can actually also impact its governance of technology, then the digital economy is governed by authoritarians. All the tech companies, and anybody who believes that liberal democracy is the foundation of the digital society, should be very uncomfortable with that.”
A panel discussion was launched by Professor Jeremy Sheff, Faculty Director of the Intellectual Property Law Center at St. John’s University School of Law, who drew attention to some of the giant yet not consumer-facing European tech companies manufacturing essential products for both the U.S. and China, particularly in the field of semiconductors, and of the EU’s increasing involvement in the current trade wars. He also addressed AI and the possible approaches to holistic regulation, contrasting the U.S. and EU approaches.
Thomas H. Lee, Leitner Family Professor of International Law at Fordham University School of Law, and a former naval cryptologist, approached Bradford’s book from a national security perspective. He spoke of the power of data collection, especially by China, that drives the growing AI technology to predict strategic decisions made by other countries’ military and individuals. “The big concern now is technology transfer and dependency on Chinese companies for essentials and particularly digital infrastructure,” Lee said. He elaborated on the U.S. free-market defense posture, and the EU’s trust in the state as regulator yet with an enforcement gap and friction between member states.
Brooklyn Law Professor Christina Mulligan, whose expertise is in intellectual property and internet law, discussed how not only regulation but culture plays a significant role in the ability to regulate in these various models, especially when considering the U.S. focus on creativity, innovation, and individual rights, especially First Amendment rights. “The American approach is not perfect. There's a lot of terrible stuff on the Internet. The worst stuff in the world is there,” Mulligan said. “But there is also the best stuff—this joy and this freedom. And I believe you can’t think about the American approach without thinking about that as well as the market and the economic side.”