"I worry that the Europeans and Americans are contributing, sort of unintentionally, to the values and the role that the Chinese state has been playing for a long time"

Agenda Pública

27 mins - 13 de Noviembre de 2023, 07:00

Raquel Jorge
Dear all, it’s my pleasure to host today a much-needed conversation on the present and future of global technology governance. We have been witnessing during these last years a sort of revamping of global policy discussions on how technology should be governed, from how it should be designed and developed, to how it should be deployed, and mostly how governments, how the private sector, developers, civil society organizations, and NGOs should be accountable for the usage, both positive and negative, of technology. This is indeed a debate that is growing. However, it is not yet enough, and we should not take for granted that the policy discussion has been achieved at its maximum level of ambition and scope. 

My name is Raquel Jorge. I am an expert in technology policy and global affairs with a focus on how the EU deploys its voice digitally speaking, and this is the topic we will be discussing today. Today we are here with a leading expert with Anu Bradford on her new book, Digital Empires: The Global Battle to Regulate Technology, which was published by the Oxford University Press in September 2023. Anu Bradford is Henry L. Moses Professor of Law and International Organizations at Columbia Law School.

She is also a director for Columbia’s European Legal Studies Center and a senior scholar at the Jerome A. Chazen Institute for Global Business at Columbia Business School. She’s an expert on international trade law, European Union law, digital regulation, and comparative and international antitrust law. Bradford is the author of The Brussels Effect: How the European Union Rules the World in 2020 by the Oxford University Press, and which was named one of the best books of 2020 by Foreign Affairs. Her most recent book is the one that I just mentioned, Digital Empires: The Global Battle to Regulate Technology, which I highly recommend you all to read through it. So, Au, thank you very much for being here and thank you as well for your time and consideration.

Anu Bradford
Raquel, thank you so much for having me. I’m really looking forward to our conversation.

Raquel Jorge 
Sure. So, actually, when I read your book, one of the main issues that stood out to me was how you talk about China, the European Union, and the US as three digital empires. Usually what we have seen is that China has been understood as one digital governance model, the US as another model, and the EU in other terms. However, you level all of them as digital empires. Could you explain to us further what you mean by ‘digital empire’ and which will be the specific scope of this issue?

Anu Bradford
Yes, I think that’s a good place to start. So indeed, the book argues that there are three primary ways to regulate technology. There is the American market-driven model, the Chinese state-driven model, and the European what I call a rights-driven model. So, all these models reflect a different emphasis when it comes to the relationship between the state and markets and the individual.

The American model is very focused on free market, free Internet incentives to innovate. So, it is a techno-optimist, techno-libertarian view of the world, where often the governance of technology is handed over to the tech companies. 

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The Chinese model is quite different. China is very focused on making China a technological superpower, but it is also leveraging technology as a tool for censorship and surveillance and propaganda in an effort to entrench the political power of the Communist Party and ensure social stability in the country. 

The Europeans are often portrayed as being forced to choose between these two leading technology powers and regulatory models. But I argue that the Europeans are not forced nor are they willing to choose between either China or the US. For the Europeans, the Chinese model is simply too oppressive, whereas the American model is too permissive.

So the Europeans have their own rights-driven regulatory model, which relies on a human-centric digital transformation where the protection of fundamental rights of individuals, the preservation of democratic structures of the society, and a notion of a more fair distribution of the gains from digital transformation takes a centre stage. 

So why do I then call these three leading regulatory and technology powers ‘empires’ is because none of these three regulatory models are confined to the jurisdiction itself. Instead, each of them is proactively exporting their respective regulatory models. So, the Americans are exporting the private power of their tech companies, which are basically everywhere. They have been set free to take over the world. And the users in the countries around the world are using American technology, the services they provide, and the products they provide. So, this private power is then extending the American digital empire and its own sphere of influence. 

The Chinese digital empire extends primarily through the infrastructure power. So Chinese tech companies are building 5G networks undersea cables, data centers, smart cities, safe cities, these surveillance technologies along what is known as the Digital Silk Road that reaches across Asia, Africa, many parts of Latin America, and even Europe.

So, the European digital empire is the empire of laws. The European superpower is a regulatory power. And this is what I’ve written earlier when I wrote about the Brussels Effect, the European Union’s unilateral ability to regulate the global marketplace because it is one of the largest and wealthiest consumer markets in the world. And very few global companies, including the tech companies, can avoid trading in the EU. So, they need to conform to European rules, including all these digital regulations that the EU has passed. But then they often find that it is in their interest to apply the European regulation across their global conduct or their global production because they want to avoid the cost of conforming to different regulatory regimes. So, simplified, regulating the single market in Europe, the EU is often able to expand its respective sphere of influence through the companies adopting its regulatory frameworks. So, this is where these more metaphorical uses of the word empires come from, because all of the three are really extending to these non-aligned markets through their private power, infrastructure power, and regulatory power.

Raquel Jorge
Thank you, Ms. Bradford. I think this is a very interesting point because sometimes we tend to talk when it comes down to global technology governance, about China, the United States, and the European Union. But you also make some reflections about the power of other countries that we consider either emerging or maybe countries that are becoming a powerhouse

We can talk about the case of India, which recently hosted the G20, and also, they released the G20 declaration, where they push forward the embedding of digital public infrastructure as a global asset, as a global common good that should be of interest for all countries. Which will be your thoughts about the increasing power of countries other than China, the US, and the EU institutions?

Anu Bradford
Yeah, so I think you are absolutely right in highlighting India as an emerging or rising and, in some domains, already an established digital powerhouse. So, I don’t consider India now to be a fourth digital empire, but I certainly would highlight India as an example of a country that is not simply at the mercy of the other three empires. It is quite selectively, emulating aspects of the other digital empires. If you look at India’s data privacy law, it in many ways is an example of copying the European GDPR, the General Data Protection Regulation, but it also includes these very state-driven, inspired data, localization provisions that are much closer to the Chinese way of governing data. 

So, India can be more strategically and selectively emulating the digital empires or then in some spaces, also developing its own governance models. But I think the rest of the world is not exactly India. There are many countries that don’t have the capabilities, whether technological capabilities, the human resources, the governance capabilities, to really chart their own way forward. They are much more dependent on Chinese infrastructure, on the presence of US Companies, and they also are not in a position to really draft the kind of governance models. And it’s easier then to look at what the leading regulator like the EU is using and then emulating those regulations. 

So, yes, I think it’s really important to think about how it affects the rest of the world. And there’s no uniform answer. And I think what is interesting to emphasize, Raquel, is that often these digital empires are present at the same time in many third markets because they are all contributing a different layer to the digital architecture. So there are many markets where you see US tech companies, you see Chinese infrastructure and the European regulations at the same time. So, the empires are colliding in those other markets.

Raquel Jorge
Yes. Based on your last point, it will be very interesting to reflect on the major infrastructure initiatives that some countries have been creating during these last years. We have the case of China’s Belt Road initiative and particularly of the digital Silk Road. The EU reacted to the Chinese BRI through the Global Gateway. The global gateway, one of its main goals and actually its main priority top sector, is digitalization. And we see that the EU aims to foster, first of all, regulatory conversions with our countries, as you mentioned in this book, and also in your previous book on the Brussels effect and also infrastructure. So, it will be interesting to know your thoughts about what you consider about the EU engaging their own private companies, fostering their own European infrastructure in third countries.

Anu Bradford
This is a very important question because we just need to acknowledge the importance of digital infrastructure because it provides the backbone for digital development in many of these countries. And for a long time, China has been the only game in town. So many of these countries say that, look, we need a path to digital development, and China is providing us one. They are prepared to build our digital infrastructures, and their infrastructure is pretty good, and it is affordable. 

So, in many ways, the Europeans and Americans have been watching from the sidelines when many of these developing countries have been opting into Chinese infrastructure because the Europeans and Americans have not provided an alternative. And here I am very pleased to see that the Europeans are taking this seriously and are trying to offer their own alternative by way of the Global Gateway. It is still not uncertain how significant it will be because China has been mustering significant state resources behind its Belt and Road Initiative behind its Digital Silk Road. And it’s not yet clear if the Europeans are actually able to subsidize the financing of all these different projects at the same scale, to the same extent in many parts of the world.

So there was some criticism that now recently when there was a big meeting on the Global Gateway, that yes, we had many high level leaders from the recipient countries, but not as hefty presence. It wasn’t that the leading EU members were all the government’s representatives at the highest level. So, given the many competing priorities that the European Union now has for spending, including building its own technological sovereignty and infrastructures within the EU, it still remains to be seen whether the EU can actually implement this pledge to provide these countries an alternative. 

But I think it’s very important that the EU would realize the significance of doing so because in many ways that the Europeans have not even matched the economic diplomacy around to really support the European companies to try to engage with local governments and try to present their infrastructure as an alternative that is more sustainable, that is safer, that comes with a kind of a different types of strings attached, if you like, than the Chinese infrastructure and make somewhat visible – what it means when you have a Chinese infrastructure versus when you rely on infrastructure built by Europeans. But I must say, this is not just that the Europeans can sell them the vision they really need to be able to provide the funding and support the acquisition of these technologies.

And the Global Gateway, it’s not just about digital. There really are many, and digital is not the only one that is important. We talk about physical infrastructure; we talk about the whole infrastructure that supports sustainable development and environmental goals in these countries. So, it is a vast, ambitious goal and really, we now need to understand whether and to what extent those goals will be implemented in practice and the promise of the global gateway actually delivered as an alternative to China.

Raquel Jorge
Yes, indeed. The level of success of the implementation of the Global Gateway and also the US Build Back Better World Strategy will depend on actually the effectiveness of their companies to implement actual projects on the ground and also be considered as an alternative to China’s companies that have been setting up these infrastructures for so long. 

Actually, in your book you talk specifically about how the US market-based, the techno-libertarian model is losing relevance. My thought here is that we have seen during these last years, especially after the COVID-19 Pandemic, that both the US and also the European Union have increased the level of public intervention in some major projects. We have seen, for example, the West fostering the Chips and Science Act. At the same time, we have also witnessed the EU proposing the EU Chips Act and many other initiatives where public intervention is gaining strength. 

So do you consider that the model that you reflect on about digital providers in the US and the EU could change vis-à-vis this higher level of intervention by the public sector? And regardless of whether you consider it is good, it is not good, but we have witnessed this scenario of a higher level of intervention, first and second, a greater coordination across the EU member states, the EU as an institution, and the United States in third countries, for example, through the Trade and Technology Council in Kenya, in Costa Rica, in the Philippines.

Anu Bradford
Yeah, look, this is a very important question, and I think it is a trend that is very prevalent and a trend that is likely to continue. So, both the US and the EU are moving to some extent away from their own deep convictions and the basic, the fundamental commitments of the American market-driven model and the European rights-driven model in favour of adopting many Chinese state-driven characteristics

So, I actually have mentioned how both the US and the EU are in part now playing Beijing’s game, and I am not sure that is only beneficial. I understand the new geopolitical reality when there’s much less trust in supply chains. The Europeans know exactly what it meant when they were too reliant many European countries on Russian energy supplies. And now that has really fed into this notion of we need more technological sovereignty, we need strategic autonomy, digital sovereignty, and Europe needs to really build its own technological capabilities because it cannot be dependent on China, especially because the relationships to Beijing are deteriorating in many ways that the tech war between the US and China is intensifying. We are seeing export controls, investment restrictions in both directions, and all countries entering into these subsidy races to build their own key strategic technology sectors.

So the US is pretty far from its own market-driven commitments at this very moment when it is playing a very hard, more geopolitical, national security-driven game in the technology space. And there are voices in Europe that are really advocating for greater industrial policy, converting the European Competition Law into a tool for building European champions. Europeans are spending over €40 billion so that they are no longer 90%, but only 80% dependent on foreign semiconductors. There are just a massive subsidies that the Europeans are also leveraging in an effort to build these capabilities. And I completely understand that the Europeans and Americans should not be fully relying on global supply chains. There needs to be a certain degree of technological sovereignty so that you are at least hedging sort of your sources of supply, and you are not too vulnerable in depending on one source of supply. At the same time, I am extremely concerned that we are moving towards the kind of protectionist world whereby these measures are increasing, they are escalating the conflict, and not necessarily leading to greater security. So, it’s the idea that Europe would be technologically sovereign is an illusion. There is no way that any of these countries, even China or the US can replicate the entangled, interconnected costly supply chains on semiconductors. 

Some degree of engagement is going to be inevitable. So, we are not going to see full decoupling. We see these countries sort of navigate between pressures for escalation and de-escalation because there are national security concerns that come into clash with the commercial interest and the benefits of continuing international engagement. For the Europeans in particular, I would really want to warn them that if you have a superpower like the Brussels effect that you can export regulations around the world. If the Europeans now convert their regulations into tools for protectionism, pursuing data localization, industrial policy-driven competition law, those rules also are subject easily to the Brussels effect. So, Europe can become a major exporter of techno-protectionism around the world. If Europe uses their competition law to block foreign companies from acquiring European targets, what happens when a European company calls to Brazil and wants to acquire a Brazilian target? Brazilians may respond, “Look, we like our national champions fine as well”. So I do worry that the Europeans and Americans are contributing, sort of unintentionally, to the values and the role that that Chinese state has been playing for a long time.

And that doesn’t necessarily serve the long-term interests of the US and the EU if they, in that process, forget what their genuine sources of strength are and what their comparative advantages.

Raquel Jorge
Do you think that the role of private companies will be strengthened with the greater participation of governments in the global technology governance? Or do you feel that tech companies that have been considered as geopolitical actors to some extent could lose influence depending on the country, depending on the topic, or depending on their home country that they come from?

Anu Bradford
So, we see a different relationship now forming between the state and these companies. And one is that if the state increasingly directs the development of technology, that’s not what most companies want. The companies want a level playing field within which they can compete. The government’s response is that right now is that the playing field is not level. China is not playing fairly. That’s what the Europeans are saying, and Americans are saying, and we need to fix that market distortion. 

But in many ways, we also may see distortive incentives for innovation if the state subsidies start determining who are the winners and who are the losers. So, there’s still some value in undistorted marketplace that is not shaped by extensive state subsidies. Those subsidies can also be wasteful, and we are not sure if the state is able to pick winners. 

At the same time, I want to make sure that I am clear in not sort of recognizing that the state can play a beneficial and supporting role. It’s just a question of what is the optimal decree of state intervention, what is the optimal decree of state coupling? And I fear that there are some forces or voices that are kind of pushing this decoupling and this state intervention, I think to a further decree than would be optimal.

But then there’s also the idea that the more the state is handing out subsidies, the more there’s the risk of regulatory capture and wasteful lobbying. The tech companies have now started lobbying for them being the recipients of these subsidies. Their sector benefiting from state support and their company in particular within that sector benefiting from state support. And that is again another issue where the companies are spending their resources in political lobbying in the way that I am not sure is beneficial if we try to maximize the development of technology in beneficial ways.

I do, Raquel, want to mention you also asked about the US-EU cooperation. So I’m happy to talk a little bit about the Trade and Technology Council. So, there have been some subsidy disputes now between the US and the EU, especially in the green space. The Inflation Reduction Act in the United States was considered very protectionist by the Europeans and really distorted in the marketplace. So it’s not that the US and the EU necessarily have a fully shared agenda here. We do see some positive elements of collaboration within the Trade and Technology Council. To some extent we see the US moving much closer to the European view of technology policy.

We saw the big Executive Order of artificial intelligence issued by the United States government this week, which reflects many of the values and principles that are embedded into the EU’s soon to be adopted AI Act. So, Americans now no longer fully trust the techno-libertarian model, and they are asking for more regulation. And we also have the Europeans that have a hardening approach towards China, especially after China’s refusal to condemn the Russian invasion of Ukraine. So now the Europeans are collaborating more with Americans in issuing sanctions and restrictive policies vis-à-vis China. In some ways I see a greater transatlantic alignment. But we all know that there are some uncertainties, including the approaching presidential election in the US next year. So, we do not exactly know whether the Europeans can count on the continuing good dialogue that is going on between the US and the EU.

Raquel Jorge
So this topic brings me very well to our last question, which is about the role of the United Nations. We have seen that the UN has been long considered as a platform for global policy discussions. However, in terms of digital policy, we have experienced a lack of great voices within the United Nations system to approach AI, to approach the impact of data centres in environment, and other digital policy issues. 

So, during this year and last year, we have seen that the UN has approached digital policy through the Global Digital Compact proposal for the upcoming summit of the future in September 2024. Also, we have seen that the UN Secretary General launched the UN high-level advisory body on AI in the last weeks of October 2023. So, which are your thoughts about the role of the United Nations vis-à-vis these three digital empires that you introduce in your book?

Anu Bradford
Raquel, I am really glad you’re asking this question because I think it’s really important. So technologies like artificial intelligence don’t respect the national borders, and they do require greater collaboration among the nations. Why I am particularly pleased to see the UN exert voice in these conversations is that I do worry about the Global South. That could be left outside of the benefits of this technological development. 

Many of the conversations have involved the developers of technologies which are very concentrated in the wealthiest nations. And at the same time, technologies like AI have a transformative potential to really democratize the world and opportunities if they can be adopted in developing countries. So, the UN is an obvious place, being inclusive in advancing the interest of a broad set of countries and ensuring that the conversations and opportunities are inclusive. But at the same time, I would need to sort of be realistic that this is not the state of the world that we live in. Unfortunately, that is very conducive for easy wins. In the domain of international cooperation, the UN’s authority has been weakened in many ways in the various crises that it has been unable to respond to.

There’s been less trust now, year after year among the governments, increasing tensions among the members of the veto holding members of the Security Council. So, at the same time, I don’t think we can be optimistic to the extent that we expect the UN to somehow now chart a way to a binding global AI treaty that would be particularly deeply meaningful and effective. So, there are too many tensions between the leading technological superpowers and the countries in general. But at the same time, I think it’s important that even if we cannot reach a global treaty, that we have conversations, that we have a better understanding of where different governments are coming from. The UN in convening also the other stakeholders, whether tech companies, civil society, so that we can have a broad-based inclusive conversation about the opportunities and dangers of these technologies and how they ought to be governed. So, in that sense, I welcome that there was the UK convened global Summit on AI and that there is conversations going on in many other international fora, whether it’s G7, G20, the OECD, UNESCO, the Council of Europe. These are all really important conversations, but I think we need to be realistic that ultimately we cannot expect there to be the kind of international agreement that would help govern us all.

It does require each government to take care of their role in ensuring that AI is responsibly governed within their own national boundaries and then commit to participating in these international conversations so that we could mitigate, at least, the frictions across the different governance regime – even if we will not be all working towards some kind of a supranational governance form for technology.

Raquel Jorge
Thank you, Anu. I think that the main conclusion for me based on this conversation is that there are three digital empires. They are transforming their own way of projecting their power outwardly. Also, they have a commitment and a responsibility to work inwardly, internally in their own national boundaries, as you just mentioned. Finally, an interesting point, which is how will the digital empires act not only at these times, but also at war times. This is an incredibly interesting question that that has been addressed in book as well. And now with the recent news on several conflicts throughout the world, it will be a good reflection to deepen the conversation. 

So, thank you. Anu Bradford, author of the new book Digital Empires: The Global Battle for Technology. We are really thankful for this conversation, and we look forward to continuing the discussion with you, with this book, and with the upcoming books that we expect you will publish in the near future.

Anu Bradford
Thank you so much. Raquel, I really enjoyed the conversation. Thanks for having me. 
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