 Hello everybody, you are very welcome to today's IIA webinar. I'm Seamus Allen, Digital Policy Researcher here at the IIA. Today I'm delighted to be joined by Professor Anu Bradford, who's going to be talking to us about her new book, which you can hopefully see on the screen, Digital Empires, The Global Battle to Regulate Technology. Professor Bradford will talk to us for about 20 to 25 minutes and then we'll go to a Q&A. You can join the Q&A using the button at the bottom of the screen. You can also join the conversation using Twitter or X using the handle at IIA. Today's event and the Q&A are both on the record. Professor Bradford is the Henry Moses Professor of Law and International Organisations at Columbia Law School. She's also the Director of Columbia's European Legal Study Centre and she coined the phrase and wrote the book, The Brussels Effect, How the European Union Rules the World. And some of you might remember that she was with us here two years ago at the IIA to talk about that book. But today, as I said, she's going to be talking about her new book, Digital Empires, which is an extension of the previous book, but looking at the geopolitics of technology regulation. Professor Bradford, thank you so much for joining us today and I'll hand over to you. The floor is yours. James, thank you so much and good afternoon everyone. I am delighted to be here and share this conversation with you. So maybe I start from the few assumptions that are underlying the digital empires and I start from the observation that there's increasingly now a global consensus that technology needs to be regulated. But there is no consensus on what that regulation ought to look like. So I argue that there are three primary ways to think about governing technology. There is the American market driven regulatory model, the Chinese state driven model and the European what I call a rights driven model. So let me start by walking you through the basic assumptions underlying each of these alternative regulatory models. So the American market driven model is really premised on the idea of maximizing free speech, free internet, free market incentives to innovate. The government is reserved a very limited role and the governance of technology is in practice handed over to the tech companies themselves. So it is a technolipitarian techno-optimist view of the world. The Chinese, on the other hand, they have a different view and under the state driven model that Chinese government is very focused on making China a technological superpower and is also prepared to deploy state resources to achieve that goal. But China is also deploying technology as a tool for surveillance and censorship and propaganda in an effort to entrench the political control of the Communist Party and ensure social stability within the nation. So the Europeans in public conversation are often portrayed as being forced to choose between the American and Chinese digital worlds, lacking a robust technology sector on their own. But I argue that the Europeans are not able to nor are they forced to choose between China and the US. The Chinese regulatory model for the Europeans is simply too oppressive, but the American model is too permissive. So the Europeans have pioneered their own third way forward, which is what I call this rights-driven regulatory model, which is centered on the idea of a human-centric digital transformation, where the protection of fundamental rights of individuals, the preservation of democratic structures of the society, and a pursuit of a more fair digital society takes the center stage. So the Europeans are prepared to transfer and redistribute power away from the large platforms to smaller companies, to individual users, and to the society at large. So these are the three what I call leading ways to think about technology regulation. But why do I then call these these leading technology and regulatory powers empires? Empires is a big word. It is a provocative word. But and I use it more metaphorically. But I think it is also conceptually helpful for us, because none of these three regulatory models are confined to the jurisdiction itself. Instead, each empire is proactively exporting its respective regulatory models abroad. And in that process, expanding their respective spheres of influence. But what is interesting to me is that they are all exporting something different. So the United States is primarily extending the reach of its digital empire by exporting the private power of its tech companies. These US tech giants were set free to grow and take over the world. And that is exactly what they have done. And so the US tech companies are providing products and services to users across the world. And if I just take an example, Meta's Facebook has over three billion users in over 160 countries. That is part of the American digital empire. And that is how the ethos of this market driven model is really expanding to the users in different parts of the world, because it's embedded in the products and services of these digital tech giants. The Chinese are exporting what I call the infrastructure power. So Chinese tech companies are building digital infrastructures across the world. They are building 5G networks, undersea cables, data centers, smart cities, safe cities, exporting surveillance technologies along what is known as a digital Silk Road that reaches across many parts of Asia, Africa, Latin America and even Europe. And while they are building these digital backbones for the digital societies, they are also extending the reach of Chinese digital authoritarian norms and expanding the Chinese digital empire. So what about then Europe? What is the export of the European digital empire? And the Europeans are primarily exporting the superpower they have, which is regulation. And this builds on my earlier work on the Brussels effect. So the EU is one of the largest and wealthiest consumer markets in the world. And there are very few global companies that can afford not to trade in the EU. So as the price for accessing the European market, these companies are following European regulations. That is not surprising. But where it gets interesting is that often these companies find that it is in their business interest to extend the European regulation across their global production or global conduct, because they want to avoid the cost of complying with multiple different regulatory regimes. So simply by regulating the single European market, the European Union is able to extend the reach of its regulations often across the global marketplace. So this is why companies such as Microsoft and Apple and Google and Meta use the European GDPR, the General Data Protection Regulation as the global privacy policy. So here, what you now notice that if the first argument was that the European Union is also an empire, this is not just the US versus China game over the rules for technology world. The second argument is that we are not seeing a neat splintering of the digital world into three separate spheres of influence. We don't just have the Chinese and American and European technology spheres because each empire is contributing a different layer to the global digital governance. Excuse me, we have many markets where you at the same time have the US tech companies, the Chinese digital infrastructure and European regulations governing that infrastructure and those tech companies. So the digital empires are at the same time present in various third markets, which also means they come into conflict, they collide, and that leads to various battles. And in the book, I talk a lot about these different battles and I distinguish between a horizontal battle and a vertical battle. And I explain how those two levels of battles are interconnected. So if we start with the horizontal battles, the most prominent horizontal battles, they are the battles between the empires themselves, the governments versus governance. And the most prominent one is the unfolding US-China tech war. That is a battle over technological supremacy, but also our economic, geopolitical, ideological, even military supremacy. So it is one of the most defining strategic contests of our era. But there's also a notable horizontal battle between the US and the EU and that is a regulatory battle. So the US tech companies have come to the European market and the Europeans feel that they have become too powerful. They are exerting too much control over the individual lives and European societies, exerting the kind of power that they can no longer responsibly handle. So the European governments are stepping in and looking to reign in that power. So the idea is that we don't want these tech companies to exploit the privacy, the personal data of European citizens. They're worried that Europeans are now being surrounded by disinformation and hate speech on these platforms. And these companies are increasingly abusing their dominant position and distorting competition in the marketplace. So the Europeans are asserting the antitrust, the competition powers, the privacy laws, the laws around content moderation, AI, now to make sure that they are controlling the way these tech companies behave. That has then led often to resentment on the US side and to arguments that, look, it's not our companies that are overreaching, it's your regulators that are overreaching. So those are some of the tense horizontal battles between the Europeans and the Americans. But at the same time, we're witnessing these horizontal battles. Each empire is fighting vertical battles in their markets. So these are the battles between the governments and the tech companies. And now, increasingly, even in the United States, the government is now rethinking its technical libertarian convictions and having the conversations on whether it also engage in this vertical battle and start asserting more regulatory control over tech companies. But that vertical battle takes place in the shadow of the horizontal battle, which introduces a strong element of restraint into the vertical battle. Because the US government, even if it is now more resentful and more distrustful of the tech companies, needs these tech companies to prevail in the horizontal battle against China. So the more you are eroding the dominance of the tech companies in the vertical battle, the fewer tools you have to then exert that dominance in the horizontal battle against China. So we are seeing more feeble effort to engage in that vertical battle in the US, because the government remains mindful of the importance of the horizontal battle. So let me now move on to the question that probably interests many of you, is what happens in these battles? Who wins? Who prevails in the horizontal battle and who prevails in the vertical battle? And I am prepared to make a few predictions here. And my first prediction is that the United States is losing the horizontal battle over the governance of technology. So the market driven model is increasingly viewed as inappropriate and inadequate as the model for governing our digital societies. So the governments and individuals around the world are losing their faith in tech companies self-regulation and are increasingly off the view that it is especially in the democratic societies, that it is the European rights driven model that is better suited to protect the public interest, to preserve democracy and to ensure the fulfillment of individual rights. Even the US, as I mentioned, is now reconsidering its commitment to the market driven model. And if you look at the public opinion surveys in the US, American citizens want more tech regulation. If you look at the deeply dysfunctional Congress, they don't really agree on anything in two parties, but they agree on two things. They agree that China is a problem and they agree that the big tech is a problem. So there's both support from the Republicans and the Democrats to regulate the tech industry. So the appeal of the American market driven model is waning both abroad and at home in the United States. So that in many ways is good news for the Europeans because in the democratic world there's increasingly now a move towards a variant of the European rights driven model. But I have potentially three concerns that make any European victory somewhat more conditional or ultimately a less effective. So my first concern is, and this is an often heard criticism, is that the European rights driven model may be very effective in protecting the rights of individuals, but it cannot be effectively combined with a commitment to innovation. So there is this idea that the European rights driven model is fundamentally incompatible with building a thriving innovative tech economy. And that is driven by this, this general observation is that yes, Europeans are good at regulating, but the Europeans are not as good as generating these tech companies. So if I ask people to name a European tech company, it may take them a while, but they have very quick to name the GDPR. So the Europeans are really more famous for the regulations than for the innovation in this space. So I am deeply worried about the state of European tech innovation, but I don't think the European commitment to digital rights and the rights driven regulatory model is where the problem lies. So it is not because of regulations such as the GDPR that the Europeans are not doing as well as the Americans in generating tech companies. And if the Europeans were to scrap the AI act, decide, okay, let's actually not regulate AI, let's repeal the GDPR while we add it. It's not that five years from now, suddenly all these tech companies would be emanating from Europe. So let me spend a little bit of time on this, because I think this is important or for you four alternative reasons that I think are much more important in explaining why the Americans are doing better than the Europeans in generating technologies. And they have very little to do with digital regulation. So first, there is no digital single market in Europe. The market remains fragmented, which makes it very difficult for European tech companies to grow and scale in Europe. They face different languages, different demand for the products based on different cultures and expectations, but also different regulatory hurdles that make it much harder to scale in the EU. That's not the problem for US tech companies. Second, there is no deep integrated capital markets union in the EU. It is much harder for EU tech companies to raise money in Europe. They do really well in the first few funding grounds, but as soon as they need more capital, they need to turn to US venture capital or they are often acquired by the US tech giants. Again, not the story about the GDPR and other regulation. It's the story about the availability of capital or its absence. Third, Europe is not a place where risk taking is rewarded. And it's very hard to pursue disruptive innovations if you are not comfortable taking risks. And if you are not prepared that sometimes these risk taking means that you will fail and you need to know that you will have a second chance. And in Europe, you don't often have that second chance. So Europe has some of the most punitive bankruptcy laws in the world that make it really penalizing to fail. Whereas in the US, failure is kind of built into the venture capital model. It is built into the part of being what it means to be an entrepreneur. It's almost like a rite of passage, a batch of owner. You raise money, you try something big, you fail, and then you go and raise money again because when people give you that money, because they feel like, well, you're working on big things. In Europe, you're done. It is very hard. There's a lot of stigma, not only the bankruptcy laws, but reputationally. The Europeans in terms of their cultural expectations are very uncomfortable with failure. And I think that makes it much harder for the Europeans to pursue those innovations. The fourth, and I think this is very important, is that you cannot be the leading innovator unless you have access to the leading innovators. And Americans are much better than Europeans in being able to attract from the global talent pool. So the American commitment to diversity and immigration explains much of the success it has had, including in the tech space. So if you look at over $1 billion startups in the US, over 50% of them have an immigrant founder. And if we focus for a moment on the household names, the biggest tech companies and their founders, think about this. Steve Jobs of Apple is a son of a Syrian immigrant, Jeff Bezos of Amazon, second generation Cuban, Elon Musk of Tesla, South African, Sergey Brin, the co-founder of Google, Russian, Eduardo Savarin, the co-founder of Facebook, Brazilian. This is again not that because the Europeans are committed to protecting rights, they don't do as well in innovation. They don't have the same pool of innovators that find a way to Europe as opposed to the United States. So let me now rather say what I think are the genuine problems and concerns with the European rights-driven model. It's not that the Europeans are regulating too much that they cannot innovate. I'm much more concerned that the Europeans are not regulating enough. There's too little tech regulation in Europe. And if I'm more specific, there's too little enforcement or implementation of that regulation. Europeans are very good at generating these laws, but they track record in effectively enforcing these laws. It's not the same. So if you look at, for instance, the GDPR, it has been spectacularly successful in transforming the global discourse on privacy and being adopted by tech companies and governments around the world alike. But even Europeans have struggled to actually enforce the laws. And it is very well known that the enforcement effort has been feeble and Europeans continue to be surrounded by many instances of breaches of their data privacy. The same thing if you think about all these antitrust competition cases against companies like Google over 10 billion, about 10 billion in fines against Google, what has happened to Google's market dominance? Pretty much nothing. So these tools have not been enough to really unlock competition in the European market. So the Europeans would need to make sure that they don't just declare a hollow victory, that they win the ideological battle with their rights-driven model. But in practice, it is the American market-driven model that prevails, because Europeans fail to entrench the market-driven model into actual concrete market outcomes. And let me now share one more limitation to European victory that really narrows down to the global appeal of the European rights-driven model. And that is the Europeans have a lot of currency in the democratic world, but they model has very little appeal in the authoritarian and authoritarian-leaning world, and that world is growing every day. These countries don't want the European rights. They look at the Chinese state-driven model and they like what they see and are increasingly emulating that as a result. So I give you two reasons why I think trying to win these countries over is difficult for the EU and US and their democratic allies. And trying to persuade them that they should not be emulating China is going to be an uphill battle for two reasons at least. One is that this infrastructure power that China has is fundamental. It provides for many of these countries, especially developing countries, a crucial path to digital development. And that is what these countries need. They look at the rights-driven model and say, look, you Europeans, you can afford to worry about data privacy. That doesn't make my top 50 concerns. Our society needs to grow first. We need to have those digital infrastructures built. China is building them. The infrastructure is good and we can afford it. And if the Americans and Europeans don't provide us an alternative, it is a really tall order to ask them to abandon their collaboration with China. Second, and this is an argument that I'm very uncomfortable making. And it is something that I was very uncomfortable writing in the book, but I think it needs to be said. China has shown to the world that freedom is not necessary for innovation. They have been able to create a thriving tech economy without being free. So it's very hard for us to go to these developing countries and say that, look, if you follow the Chinese model, you get control, but you will not see innovation. You will not see economic growth. They look at China and say, well, it seems like I can have both. So those are some of the reasons why I think the battle in the horizontal space over the dominance of the right-driven model is going to be difficult because of the appeal of the Chinese state-driven model. So let me now go to my final remarks and highlight the most consequential battle that I think we all should be focused on in this debate and the one that left me really concerned when I was finishing the book. And that is really the battle over the future of liberal democracy. And I would want to invite you to think that that battle can be lost in one of two ways. So one is if the Europeans and Americans and their democratic allies indeed lose the horizontal battle to China and the world is growing more digital authoritarian. And I have outlined some reasons why we need to take the prospect of losing that battle very seriously. But I also want to remind you that the battle for saving liberal democracy can be lost if the US and the EU and other democracies lose the vertical battle to the tech companies. And it's the tech companies and not democratic governments that are governing our digital societies. That is also a loss for liberal democracy. And we can be fearful that that might also happen because as we have noted the Americans have a hard time legislating in this space. China does not have a hard time legislating. If the Chinese government decides it's time to crack down on big tech guess what it is time to crack down on big tech. Whereas the US Congress cannot pass these laws and the Europeans they can pass these laws but they have a hard time enforcing these laws. The Chinese government doesn't have the same difficulty of enforcing these laws. It's not that the Chinese tech companies are dragging the Chinese government to independent courts in China and for a decade battling against any effort to regulate them. That's what happens in Europe. And this is why I think it is so important that the Europeans and Americans or any liberal democracy can show to itself and to the world that there is a liberal democratic way to govern technology. Because otherwise we are forced to conclude that the digital economy is governed either by authoritarians whereas democratic governments are destined to fail in that same endeavor. Or it's governed by tech companies and neither is consistent with the fundamental principles of liberal democracy because then the outcome would be that the true digital empires are the authoritarians or the tech companies. So let me leave it there and I welcome your questions.