EditorialDigital economy

The limits of freedom

The question as to what extent the digital economy should be restricted by regulation is degenerating into a culture war between the USA and the EU. The ultimate yardstick has to be the potential damage.

The limits of freedom

The fact that Elon Musk recently provoked another scandal in a verbal spat with EU Commissioner Thierry Breton on X is not really worth mentioning. After all, eloquent taunts from the notorious non-conformist are practically the order of the day. However, the clash is significant for two reasons: Firstly, Musk's followers on one of the world's most important social networks overtook the number of „followers“ of previous frontrunner Barack Obama some time ago. The former US president has around 130 million followers, while Musk now has more than 150 million. The sheer reach of his posts automatically goes hand in hand with a corresponding influence and potential for damage.

On the warpath

What's more, Musk not only insists more than almost anyone else that freedom of speech should be practically limitless. He is also one of those who are generally at war with the regulation of the digital economy. The colourful entrepreneur is by no means alone in his aversion to regulation, but is literally in the best of company with the big tech scene, which also has the ear of the government in view of its paramount importance for the US economy. The technology giants have long succeeded in portraying the EU's digital legislation as an expression of a regulatory frenzy that is hostile to growth and innovation and of whose influence US companies should be removed from as far as possible. Examples include the General Data Protection Regulation and the two comprehensive sets of regulations, the Digital Markets Act (DMA) and the Digital Services Act (DSA), as well as the AI Act. This has recently even led to a kind of culture war being staged between the „land of opportunity“ and the supposedly anti-progress „old continent“.

On the defensive

The debate is taking place on difficult terrain, in which the EU has recently found itself increasingly on the defensive. After all, critics of regulation in this country point out that the latest revolution in the internet through artificial intelligence (AI) is once again coming from the USA. Key elements such as high-performance semiconductors and AI-supported large-scale language models are being developed there, while Europe is the first to endeavour to create a legal framework instead of being innovation-friendly. As a result, the AI Act cements a technological dependency.

This is grist to the mill of the opponents of supposedly excessive regulation. However, there is a risk of losing sight of the damaging consequences for the economy and society of the US authorities' long lack of regulation or downright blindness to „innovation“, business practices and the power of big tech. Whether it was swallowing up young companies with disruptive potential for initially incomprehensible billions, persuading them to „cooperate,“ or abusing power over those involved in leading platforms like the App Store or Play Store, the pattern was clear. There were also unfair practices in the search engine market and anti-competitive bundling deals, a speciality of Microsoft. In practically every case, U.S. authorities were roused from an inexplicable deep sleep, but at a rather late stage. The EU was often ahead of them.

U-turn by the US authorities

In any case, the U-turn, which can be seen in the growing number of antitrust and court proceedings as well as requirements imposed by US authorities in the battle with Big Tech, is tantamount to admitting that a lack of forward-looking regulation also has considerable downsides. This is particularly true with regard to the manipulative power of social networks. Among other things, the Digital Services Act prohibits the dissemination of falsehoods, hate messages and hate speech. After the events of the last US election, Washington should know better than anyone how important it is to set limits to freedom on the internet too – and not shy away from muzzling Elon Musk.