Home PublicationsCommentary Event Recap: Can Regulators Handle the Mastodons of the World?

Event Recap: Can Regulators Handle the Mastodons of the World?

by Kir Nuthi

The last few years have seen some users gravitate toward decentralized Internet services–such as Mastodon and Peertube—as alternatives to centralized “Big Tech” platforms. But recent bills and regulations from the European Union, the United Kingdom, and the United States do not consider how rules should apply to these services. The Center for Data Innovation convened experts to discuss the challenges policymakers face in applying existing laws and regulations to decentralized online services.

Neil Chilson, senior research fellow for tech and innovation at Stand Together, explained his three key principles when talking about online decentralization. First, Chilson clarified the distinction is not a dichotomy between centralized and decentralized, but rather a spectrum from more to less decentralization. Second, Chilson argued the purpose of decentralization was to create “emergent order”—spontaneous order without central direction—and focus on community-building. And finally, Chilson’s third guiding principle was to focus on the forces that move services in opposing directions, like the centralizing force of governance and the decentralizing force of individual liberties. 

Chilson also urged the audience to think of decentralization as the continuation of how the Internet disrupts old ways of creating and governing the flow of information. He wondered if policymakers should take an equally experimental approach in how they govern technology and approach issues like privacy and content moderation by learning incrementally and focusing on harms rather than formal rules.

Konstantinos Komaitis, a non-resident fellow and senior researcher at the Lisbon Council, discussed how the principles behind decentralization online are similar to those behind subsidiarity. Subsidiarity is the idea of addressing issues locally instead of in a centralized hierarchy. Both decentralization and subsidiarity minimize the potential for a single point of failure or a single point of control. Komaitis argued that policymakers and academics should create legislation that is predictable, consistent, and, most importantly, proportionate. 

Komaitis also urged the audience to not treat decentralization as trendy or as just limited to cryptocurrencies and NFTs. Instead, Komaitis argued that everyone should look at decentralized Internet services more holistically to understand that decentralization is more than just technological decentralization and also includes the decentralization of decision-making power. He feared that if policymakers simply transpose the regulatory models from Web 2.0 onto Web 3.0, these would create similar, if not the same, issues of power, privacy, and data abuse.

Both panelists agreed that one of the main problems facing online regulation is that current legislation is prescriptive and built with certain players and their services in mind. Both agreed this played out clearly in debates surrounding content moderation, especially with regard to the European Union’s Digital Services Act and the United States’ Section 230. In fact, both argued that current legislation highlights the need to tailor regulation to be more flexible to adapt to those changing and emerging trends.

Much of the debate centered on the differences between a prescriptive approach and an outcomes-based approach. The larger question was whether it’s possible to approach problems like content moderation in alternative ways that look at outputs and the harms that are inflicted, and apply these more flexible frameworks equally on both more centralized and more decentralized services. In order to achieve this style of regulation, both Komaitis and Chilson argued that both experimentation and collaboration between the technology services and regulation would be critical. Both also noted that the concept of compliance processes directed at centralized entities would be problematic for more decentralized services and even smaller, more centralized services.

Overall, the conclusion both Komaitis and Chilson reached was that prescription cannot be the driver for regulation. Instead, creating general principles and allowing regulations to evolve will allow policymakers and services to focus more on harms, and less on compliance. Only then can a digital ecosystem that can handle all forms of centralized and decentralized services and future experimentation thrive.

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