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Smart Regulation in the Age of Disruptive Technologies

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Smart Regulation in the Age of Disruptive Technologies SMART REGULATION IN THE AGE OF DISRUPTIVE TECHNOLOGIES Andrea Renda CEPS, Duke, College of Europe 13 March 2018 A New Wave of Regulatory Governance? • First wave: structural reforms (1970s-1980s) • Privatizations, liberalizations • Second wave: regulatory reform (1980s-1990s) • Ex ante filters + “Less is more” • Third wave: regulatory governance/management (2000s) • Policy cycle concept + importance of oversight • Better is more? Alternatives to regulation, nudges, etc. • Fourth wave: coping with disruptive technologies? (2010s) Competition Collusion Access Discrimination Digital Technology as “enabler” Jobs Unemployment Enforcement Infringement Key emerging challenges • From national/EU to global governance • From ex post to ex ante/continuous market monitoring (a new approach to the regulatory governance cycle) • Need for new forms of structured scientific input (a new approach to the innovation principle, and to innovation deals) • From regulation “of” technology to regulation “by” technology • A whole new set of alternative policy options • Away from neoclassical economic analysis, towards multi-criteria analysis and enhance risk assessment/management/evaluation Alternative options & Problem definition Regulatory cycle Impact Analysis Risk assessment, Risk management Evaluation dose-response Emerging, disruptive Policy strategy and Learning technology experimentation • Scientific input and forecast • Mission-oriented options • Ongoing evaluation • Mission-led assessment • Pilots, sprints, sandboxes, tech- • Pathway updates • Long-term pathways enabled regulation “Laws that learn” ALTERNATIVE POLICY OPTIONS • Regulating behaviour – Need to fully account for behavioural biases in individuals – Stop protecting consumers, start empowering users – “Nudge” most controversial when it comes to emerging technologies? (Yeung 2017) • Regulating technology – Code, not law, defines what’s possible (Lessig 1996; 1999) – Design-based rules: embedding ethical principles/normative goals in code? • Regulating “with” technology – Constant surveillance – Distributed ledgers – “Guardian AI”: algorithms that monitor algorithms “Regulatory engineering” • New screens • New experiments – Openness/neutrality – RCTs – Interoperability – (Virtual) sandboxes – Scalability – Ideation Sprints – Contestability – Rapid prototyping – Resilience – Regulation via “extensions” – Enforceability – Co-regulatory schemes Taxonomy of algorithmic approaches (Yeung 2017) Actionable insights? Transparency Garbage in, garbage out Discriminatory actions Profiling and reorganising reality Responsibility Source: Mittelstadt et al (2016) Overall EU SDG goals Mission-oriented policy Mission-oriented innovation policy Spending (MFF) Mission innovation Sectoral policies EU Mission 1 Mission 2 Mission X EU SDG Indicator Set Horizontal policy Governance Semester/Cohesion funds Frontier 2030 (Europe) Tools National SD MS pathways Progress/evaluation Regulation & MOIP: key challenges • Embedding innovation in coherent baseline scenarios • Embedding different technology mixes and business models in the choice of policy alternatives • Linking the evaluation cycle with updates in the technology roadmaps • Experimentation, data management and collection in both MOIP and policy Regulation & MOIP: key challenges 1 Mission-led platforms Coherence check Coherence check Mobility + Motivation + Motivation Political validation of amendments of amendments Shelter First VP New IA guidelines 5 6 Jobs 2 3 4 Baseline Energy Ex ante IA Council Adoption Options RTD RSB EPRS Health Lead DG Security Climate STOA Unit Monitoring and ex post evaluation SMART REGULATION IN THE AGE OF DISRUPTIVE TECHNOLOGIES Andrea Renda CEPS, Duke, College of Europe 13 March 2018 Example 1: Why did we want net neutrality? • Anonymity • Competition and fair business practices • Innovation • User choice • Openness • Freedom of expression/Pluralism Example 2: Grid neutrality? • “The electric grid does not care if you plug in a toaster, an iron, or a computer … [It’s] a model of a neutral, innovation-driving network” (Tim Wu, 2002) • Still true? • Grid neutrality would have effects on competition, investment, distributional, and industrial policy • Grid neutrality would not make the grid neutral • It would clash with the trend towards responsible cooperation with platforms • Any alternative is problematic in terms of enforcement: but this is a debate that is nowhere on the map, in all ICT-permeated sectors EXAMPLE 3: COPYRIGHT ENFORCEMENT • Early years (1996-2001): belief that ISPs should not inspect content • 2001-2010: belief that DRMs would dominate the market, allowing for “easy” enforcement (not without shortcomings) • 2010 onwards: the age of inspection and intermediary liability • Need to review the problem definition • Policy learning: need to monitor emerging technologies and verify possible avoidance strategies (e.g. TOR, Onion Routing, etc.) Achilles and the turtle n Mp3.com (2000) ¨ One-way downloads ¨ No sharing ¨ Space-shifting ¨ Not fault-tolerant ¨ Not extensible ¨ Not lawsuit-proof n Napster (2000) ¨ Centralized ¨ Static ¨ Manageable ¨ Not extensible ¨ Not fault-tolerant ¨ Not lawsuit-proof Achilles and the turtle n Morpheus (2003) ¨ Decentralized ¨ Dynamic ¨ Difficult to manage ¨ Extensible ¨ Fault-tolerant ¨ Lawsuit-proof n Grokster (2003) ¨ Decentralized ¨ Dynamic ¨ Manageable ¨ Extensible ¨ Fault-tolerant ¨ Lawsuit-proof p2p boom! 2 Find MP3 BitComet Easy File Sharing Web Server KazaaHttp Searchius ABC BitComet Accelerator eDonkey 2000 Knutell SendLink eDonkey Accelerator Acquisition BitLord LimeWire Shareaza eFileGo Lphant peer to peer ShareDirect Adagio BitSpirit Einstein Amini p2p Software BitTorrent MagicVortex ShareGear Emule MediaGrab! aMule Project BitTorrent Absolute Downloader ShareIt eMule Plus Mercora IMRadio Soulseek ANts p2p BitTorrent Lite eXeem Mextractor Anywhere Explorer Black Pirate FS FilePipe MLdonkey Streamjack Music Apollon Blubster Filetopia Morpheus The Circle Applejuice BT2Net Freenet MP3-Wolf Torrent Searcher Ares Bt2Net Jet-speed Downloader Gnucleus Myster Torrentopia Grokster Ares p2p BTGetit Network Sunshine TribalWeb Grouper Nodescan TrustyFiles Arliweb Folders Carracho Haxial KDX AudioGalaxy Rhapsody Connect Storm Noxx Web file manager iMesh P2P ShareSpy AudioGnome Crazaa HTTP Commander iMesh Light Peer2Mail WinMP3Locator Axbar DC++ iMesh Revolution PeerFolders Azureus Deepnet Explorer InfocuSoft Photo Share WWW File Share Pro PeerFTP BadBlue Diet K K-LiteGold XBT Personal File Server BCDC++ Digital Media Server Kast Xolox KaZaa Piolet BearShare DIYP2P / Paranoia PixVillage YaCy DriveHQ Kazaa All-in-One ZipTorrent Kazaa Lite Resurrection PruneBaby! Zultrax PySoulSeek Qnext Technology wins again… Technology wins again… Example 4: Algo trading “Flash crash of 2.45” - 9.2%! Who is responsible? The making of a fly.. $23 million!! Who is responsible? Collective (ir)responsibility? BlockChain EXAMPLE 5: FILTER BUBBLES • The “Daily me”: ongoing polarization of political opinions • Alternative policy options? • Self-regulation (corporate codes of conducts, industry-wide agreements) • Co-regulation (e.g. extensions such as Balancer, PolitEcho, Bobble, This is Fake, Considerit, FlipFeed, Escape Your Bubble) • General principles of accountability for pluralism and political balance to major platforms and social media • Development of publicly funded third-party, interoperable extensions on major platforms (e.g. use of innovation prizes?) • Outcome-based policy in the form of KPIs that measure the political balance in the flow of information exchanged by individual end users. Example 6: automated driving Making decisions… Example 7: the “digital panopticon” SMART REGULATION IN THE AGE OF DISRUPTIVE TECHNOLOGIES Andrea Renda CEPS, Duke, College of Europe 13 March 2018.
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