by Samuel Prinz
It’s time to put some order in the digital “Wild West”.
— Thierry Breton (@ThierryBreton) January 19, 2022
The Digital Services Act (DSA) and the Digital Markets Act (DMA) are both crucial projects to create a legal framework for the digital strategy of the European Commission. The projects have been part of one of the six Commission priorities for 2019-2024 (A Europe fit for the digital age). Currently, the legal basis is mostly part of a twenty-year-old regulation about e-commerce – thus in many cases definitely not up-to-date.
With this new framework the Commission aims to create a digital single market with consistent rules all over Europe. Secondly, there should be a better oversight about platforms regarding data privacy. Lastly, the goal is a fair digital competition and therefore new tools for the EU to fight against digital monopolies – even before they start to exist. One of the main approaches to reach the targets is to create stricter rules for so-called “gatekeepers” (platforms with big network effects).
All in all, it is clear that big tech companies are strongly against these regulations and try their best to weaken them. But before I examine their strategies and current success, we need to understand the role of interest groups within the decision-making process of the EU.
What is the role of interest groups in the EU?
Interest groups come in many different forms and shapes. Even though the term “lobbying” is in the broader public closely connected with economic interest groups, there are also NGOs like Greenpeace, consumer protection organizations or trade unions. There are even interest groups out there that aim to restrict the power of lobbying (e.g., LobbyControl). But they all share their common goal: influencing the institutions to create a result in their favour. Nonetheless, not only interest groups can benefit from the connection to the policymaker: lobbying is often conceived as a trade between interest groups and political institutions. Therefore, lobbying isn’t inherently bad and nor does it only help the interest groups to achieve their goals. Interest groups can offer a deeper insight into a certain area because they have more expertise in their professional field than the decision-makers. This can increase the legitimacy of a political system in general and the adopted policy in particular. On the one hand, you can strengthen the input-legitimacy due to the participation of different interest groups and thereby the participation of the public. On the other hand, the policies will likely work better and create a better outcome, because experts of the topic have been consulted.
Since the EU has become involved in more or less every policy field, it has gained a higher priority for interest groups. Especially since the introduction of the European Single Market in 1992, many lobbyists found their way to Brussels. An important driver for this development has been the shift away from the unanimity vote to a majority voting system in the Council of the EU.
Within the EU, the Commission has been the main addressee of lobbying attempts for a long time. And still today, the Commission remains an important institution for interest groups. One reason for this is its role as agenda-setter of the EU. It prepares and drafts a first proposal that is put to the vote in the Council of the EU and the European Parliament. But with the evolvement of the European Parliament to a “real” co-decision-maker, it has become more and more important for lobbying. Last but not least, the national level is also involved in many lobbying activities (to get more information about lobbying on different levels: “venue shopping”)
To create a more transparent system, the EU has created a mandatory transparency register. In it, everyone can search for interest groups and can get information about their staff, budget and meetings with EU institutions. Moreover, the commission has institutionalized so-called “consultations”, where interest groups but also regular citizens can share their opinion about an emerging law.
The role of big tech in weakening the DSA/DMA
As I mentioned above, the main target of both the DSA and DMA is on the one hand to increase the data privacy for users and on the other hand to tackle the monopolies of companies like Meta (formerly Facebook) or Microsoft. Hence, the idea of the DSA and DMA has been largely approved by privacy interest groups. The German “Netzpolitik.org”, for example, called it a “revolutionary project” that “could change the digital world forever” and it has been seen as a paradigm change towards proactive regulation. Since the start of the twin legislation proposal, anti-lobbying NGOs and consumer protection interest groups have kept an eye on tech companies and found a lot of evidence for intense lobbying. The DSA and DMA are considered to be one of the most heavily lobbied legislation in the history of the EU. In a 52-page long paper, the organization LobbyControl examined the lobbying power of big tech. According to this paper, the industry spends annually more than 97 million euros for lobbying purposes with personnel of more than 1,400 lobbyists and is currently spending more than other notoriously lobbying industries like the automobile or pharmaceutical industry. Moreover, it shows the clear dominance of big tech in meetings with the commission. About 75% of all meetings between interest groups and the commission have been with an economic interest group and only less than 20% with an NGO or customer protection organization.
But the companies didn’t just use their financial power to lobby the EU-institutions directly. The French newspaper Le Point leaked a strategy paper by Google on how to change the DMA and DSA. There, Google describes their plan of “reconfiguring the narrative” about the legislation and frame it as damaging not only for companies but also for the users. To achieve that, the platform would use academic allies as well as “independent” think-tanks.
This strategy hasn’t been applied just for the two new regulations but is common for big tech companies. Especially Facebook, but also other big players haven’t specified their membership in such “independent” think-tanks like Centre on Regulation in Europe.
The results of the massive lobbying
But has their effort been successful? To analyse this in-depth would go beyond the scope of this article. Generally speaking, the big tech’s lobbying efforts have definitely had an influence on the legislations. For example, there have been plans by the European Parliament to ban personalized advertisement that required online tracking. But the tech companies managed to weaken it, mostly with the help of interest groups funded by Google, Facebook and Amazon. In the current version, it is only prohibited to collect data about minors or sensitive personal data (e.g., political views).
Here, we can clearly see the downsides of lobbying. If it is done non-transparently and there is an asymmetry between economic interest groups and public interest groups, it won’t lead to a higher legitimacy of the political system. Rather, the political institutions will always favour solutions that benefit (big) businesses. To reduce the asymmetry and to create better policies, the European Union has to take additional steps to enforce the transparency register and it has to create also equal opportunities for non-economic interests. Only with such measures, the role of interest groups can eventually succeed in improving the decision-making process.