Innovation in the age of regulatory frameworks and what does your startup have to do with it?
The first months of 2024 have already proven to be a milestone in the world of Technology – not only in terms of innovation, but also in terms of regulation worldwide.
In the United States, a public hearing held at the end of January in the US Senate brought together the world’s leading technology companies – Meta, Snap, TikTok, Discord and X – to give testimony on topics such as bullying, suicide and emotional pressure on children and adolescents, which evolved into a discussion in February at the Supreme Court to regulate content on the platforms. In March, the US House of Representatives went further, approving a bill that could force TikTok to leave the country if ByteDance – TikTok’s owner – does not sell the app to an American parent company. Washington is more concerned than ever about national security and wants to prevent China from collecting data on American citizens.
In Europe, the provisions of the Digital Markets Act (DMA) began to take effect at the beginning of March, not without controversy. For example, the DMA allows cell phone users to use alternative platforms to download applications, other than those that come with the standard handset. An unprecedented decision that is shaking the halls of Apple and promises to help break up big tech monopolies, if it goes ahead as planned by the legislators. In the same month, the European Parliament approved the first law to regulate artificial intelligence, putting the ethical debate at the center by dividing and regulating technologies according to their risks to the human species.
In China, government rules force Apple to block applications such as virtual private networks, known as VPNs, which would give users unfiltered access to the Internet.
Meanwhile, in Brazil, the legislative debate on AI, the actions of large technology corporations and the distribution and moderation of content on social media (which includes the famous “PL das fake News”) predominates – and especially in view of the upcoming municipal elections this year. Economic regulation of digital markets, inspired by the experience of the European DMA, is another topic on the agenda.
The Earth that used to revolve around the sun now revolves around the chip, awakening in people a “technological enchantment” – that permanent state of restlessness in the face of the ease of circulating data, content, platforms, true or false news, artificial intelligence. This change has generated new ways of living as individuals and as a society. And these new ways have created some of the most tangible examples of how a chessboard of laws and regulations is now fragmenting people’s technological experiences, depending on where they live.
Governments around the world are trying to keep up with technological innovation. They don’t want to fall behind in creating rules for this emerging environment, which, in addition to bringing about a revolution, is also plunging us into an era of regulatory frameworks.
Governments around the world are trying to keep up with technological innovation. They don’t want to fall behind in creating rules for this emerging environment, which, in addition to bringing about a revolution, is also plunging us into an era of regulatory frameworks.
We need to think beyond technology and understand that the discussion is not about technology or regulation. It’s about culture and society, ethics, law and how we behave.
Let’s look at Brazil: the basis of our law is European, not American. Our way of thinking, creating laws and acting in the system tends to be more similar to Europeans on many issues, which includes, for example, our appreciation of free competition – since we have an important and active body to defend this issue – CADE. In terms of society’s behavior, Brazil has a profile closer to the US than to Europe or China. We have faced polarized debates very similar to those in the US, which put fake news and polarization at the center of the agenda, as is usually the case at election time.
In this way, the European Digital Markets Act (DMA) seems to increase the competitiveness of startups by allowing greater access to large companies and better conditions for competition in the market. The regulation of AI, on the other hand, seems to decrease the competitiveness of startups by attracting less investment for AI development in places (e.g. Europe or Brazil) where there is greater control.
Whatever line Brazil or any other country takes on new regulations, the ideal is to understand society’s behavior while governments and companies – of all sizes – need to work together. Start-ups continue to be fundamental to corporate innovation and serve as a criterion for assessing countries’ potential and technological leadership. Just as a considerable part of Europe’s GDP is based on small and medium-sized organizations (around 60%), micro and small businesses account for almost 30% of national GDP and more than half of formal jobs, and these figures are growing.
Finally, just as the development of new digital resources arouses “technological enchantment”, laws need to understand and help drive society and business forward, to the point of also promoting a “regulatory enchantment”.
Article published in Meio & Mensagem [Link]
