Mathias Döpfner, CEO of Axel Springer, one of our reference shareholders, explains why Europe must protect our personal data in his letter to the President of the European Commission, Ursula von der Leyen.
Big tech companies shouldn’t own citizens’ private data. Before Europe goes too far down the wrong path, we should give data back to those who belong to it: the citizens.
Dear Madam President of the Commission,
Dear President von der Leyen,
I am writing this open letter because it deals with a subject of great interest to European citizens.
I am not referring to a global pandemic, but to a challenge that could prove even greater and more serious in its consequences. US and Chinese technology platforms are challenging people’s sovereignty and undermining democracy. It is a question of freedom, the rule of law and human rights. This is the idea of a modern Europe.
In 2014, I wrote an open letter to former Google CEO Eric Schmidt. I described the danger that a platform like Google represents for the individual rights of citizens, for pluralistic competition and for freedom of expression when it is not controlled by regulations. This letter was both a warning and an admission: “We are afraid of Google:”
At the time, many said I was exaggerating. Unfortunately, it’s quite the opposite, I minimized. In hindsight, I realized that the risks I had warned of manifested themselves much more quickly and are much more serious than I could have ever imagined. And it’s no longer just about Google. We are now faced with a situation where huge supranational corporations can come to place themselves above governments or the democratic order. Another question we need to ask ourselves is whether machines are there to serve humans, or will humans end up serving machines and their far too powerful operators?
This trend has been visible for a long time. But this pandemic and the consequences of the fight against it have accelerated the trend and reinforced it. And perhaps that’s precisely where our chance lies.
Pluralism in competition is eroding
As of January 2020, the market capitalization of Google, Facebook, Amazon, Apple, Netflix and Tesla was $3.9 trillion. In January 2021 – one year after the global COVID-19 outbreak – the market value of these six companies reached $7.1 trillion. This represents an increase of 82%, or US$3.2 trillion.
During the same period, 255 million jobs were lost worldwide. In Europe, unemployment has risen from 7.5% to 8.3%, and the emergence of gigantic work is the only thing preventing this figure from being much higher. In Germany, a survey by the German Chamber of Commerce and Industry indicates that 175,000 companies believe they are threatened with bankruptcy due to the pandemic.
All that prevents these companies from facing financial ruin are massive state loans and aid programs. But for how much longer?
Millions of freelancers and freelancers will have to abandon their businesses because they are no longer able to survive the effects of the shutdown. Pluralism in competition is eroding because the people who benefit from the crisis are the big tech companies. The competitive advantage of technology platforms is growing by the day. To a certain extent, and rightly so, because they are simply very good innovative companies.
But to some extent, it is undeserved, because some of these companies have questionable business practices. You could say that’s the way it is. But is it good for sovereignty? Is it good for citizens?
Google and Facebook alone generated about $230 billion in ad revenue last year. This represents 46% of the global advertising market. According to forecasts, their market share is expected to reach more than 60% by 2024. The absolute dominance of technology platforms also means the disappearance of the diversity of journalistic, artistic and commercial products and services.
Why should anyone make the effort to do time-consuming research when in the end, only a few platforms benefit from the information obtained? Again, you could say that’s the way it is. But one can also wonder why this is so.
To put it simply, the reason is that the business model of ad-based platforms is to spy on their customers like a secret service. In the case of technology platforms, this is done by algorithms, which are the product of programming by humans. The algorithms have a neutral sound. But they are not. They are the result of a human intention. Coders have given algorithms a personality, perhaps even the personality of a consumer, or even a politically ideological personality.
What we should want
Algorithms analyze our behavior and tell us what we should want. Or, as Eric Schmidt said years ago, “We know where you are. We know where you’ve been. We can more or less know what you’re thinking.”
Through this “behavioral targeting” mechanism, platforms like Amazon, Facebook, and Google analyze what we do, what we want, and decide what we should want. And then they send us suggestions based on that data. Knowing that we are considering buying a new car, they reinforce and channel our wishes and send us suggestions. In fact, the manufacturers of the suggested products pay the platforms to do so.
You too, Mrs von der Leyen, are probably familiar with the following scenario. You’ve talked to someone about a product you want to buy, and soon after, your email inbox is full of offers for similar products.
However, algorithms – and therefore the platforms that underpin them – don’t just know our consumption habits. They can determine if a woman is pregnant before she even knows it herself. They know what emails we read, what images we look at, and what products we buy. Behavioral models that algorithms, which are made up of data, add up and analyze more reliably than any husband or lover could ever do.
“Surveillance capitalism” is what Harvard Professor Shoshana Zuboff calls in his book of the same name, which has already become a major work of our time. We, the citizens, reveal our most intimate information – to maximize revenue from advertising sales from technology platforms. The more transparent citizens are, the richer the platforms.
We must not continue down this path. The alternative, our way out, President von der Leyen, is incredibly simple.
Data must once again belong to those to whom it has always belonged. To the citizens.
The Chinese model is simple: the data belongs to the state. Capitalist state-owned companies collect the data, monitor their citizens and hand over the results to the Communist Party, which rewards citizens who are loyal to the regime.
In the United States, where data belongs to capitalist corporations, things are much better. Companies like Facebook, Amazon or Apple compile, collect and record data and use it to optimize their business models. They monitor and analyze our behavior so that we consume more. For the economic benefit of platforms. It is much less harmful than what is happening in China. However, this is not yet the way things should be. This turns citizens into puppets of capitalist monopolies.
We need help from legislators
In short: I think citizens need to be more self-critical and assertive. But to do that, they need the help of politicians. The support of legislators.
Europe has a historic opportunity to do what Europe has always done best: assert the authority of popular sovereignty. And to achieve this, Europe – and hopefully all countries that belong to the Western community of values – must ensure that data does not belong to the state or to companies. They must be returned to the individual. And I am sure that the United States will follow Europe in this case. This is one of the few times Europe has the chance to become the leader of the digital age.
In concrete terms, this means prohibiting EU platforms from storing private data and using that data for commercial purposes. It has to become law.
And it must go further than the General Data Protection Regulation and other existing laws on one decisive point: any attempt to weaken data protection in the name of so-called voluntary consent must be excluded. Permission to use data does not even have to be possible in the first place. Sensitive and personal data have no place in the hands of the platforms that govern the market (the “gatekeepers”) or in the hands of States.
For a better world of freedom and self-determination
President von der Leyen, if you and your colleagues ban the commercial use of private data, you will change the world. You will make the world a better place. Otherwise, we will engage in a new order. An order in which human rights, self-determination and freedom within the framework of the law will no longer have any meaning. We will surrender to a surveillance capitalism that will topple everything Europe stands for.
If you think I’m exaggerating, here are two recent examples that prove my point.
First, Facebook and Twitter decided to block Donald Trump’s account. One might intuitively think it was the right thing to do since the president was endangering democracy from above. But is it fair for a capitalist society to decide what politicians are allowed to say and to whom? For a company (and in particular one which, with 3 billion users, has a clear leading position in the market) to place itself above the law and above democratic institutions?
Second, in Australia, the government has decided that Google must give publishers an appropriate share of the revenue it has earned from journalistic content. If Google does not reach an agreement with these publishers, the decision will then be made by an independent arbitrator.
As a result, Google threatened to block all Google search functions in Australia. That would put Australia at a great disadvantage. People would have very limited access to knowledge, and companies would have very limited access to their customers. There are no two solutions: it is blackmail. The Australian government has not been intimidated so far. Prime Minister Morrison was clear about this: “Australia sets our rules for the things you can do in Australia.” It’s the government that makes the decisions in Australia – not Google. Who decides in Europe?
President von der Leyen, your European Commissioner, Thierry Breton recently said: “Europe is the first continent in the world to initiate a comprehensive reform of our digital space. They are both based on a simple but powerful principle: what is illegal offline should also be illegal online.” There is nothing to add to that.
Do you want to prevent people from being spied on? Do you want to prevent them from being monitored to know what they consume? And do you want to make sure they’re not being watched for which political party they’re voting for?
So ban in virtual life what you have already forbidden for decades in real life. And make stronger in Europe what makes Europe strong: the power of the people.
The platforms will tell you that you are destroying their business model by doing so. It’s not true. It will only weaken a little. Like publishing houses and like all bloggers (the publishing houses of the future), platforms will still be able to monetize their reach. Or like any merchant or wholesaler, platforms will still be able to sell their products and services. But billions will go back into the hands of thousands of publishers, artists and retailers. Companies that build customer loyalty through the quality of their products, not by monitoring their behavior.
Platforms that have such market power have mutated into essential facilities. They are de facto monopolies. Without any alternative for the consumer. These companies must be subject to different rules and regulations, otherwise competitiveness will suffer, as will the market economy. The fact that platforms can do business differently has been proven by Netflix (for transparency reasons, know that I sit on the board). Netflix has no ads and does not analyze private data. All she monitors is the behavior of viewers in relation to her own films and series.
What we need is a European Constitution.
President von der Leyen, this simple measure gives you the chance, perhaps for the first time ever in the age of the digital economy in the EU, not to swim against the tide of progress or to fix something after the fact. You can proactively shape the digital future. Whether it’s copyright reform, data protection changes, or the Online Privacy Regulation, the EU has almost always arrived too late, taken too long, and tech companies have been able to avoid or circumvent regulations. It’s like the race between the hare and the tortoise. The turtle always gets there. By being smarter and therefore faster.
By implementing such a measure – a kind of European Constitution – the EU will be ahead of its time and at the same time too far ahead for others to catch up. It will not swim against the current, but with the current at the service of its citizens.
I make a very sincere appeal to you: prevent the surveillance of our citizens by making it illegal to store all personal, private and sensitive data. Reduce the excessive power of the US and China monopoly platforms.
Encourage European citizens to lead a self-determined life and empower them to do so. And in doing so, to enable ideas, opinions and concepts to compete in a Europe of diversity. Pluralism of lifestyles, opinions and ideas has always been Europe’s strength. Surveillance, collectivism and external control have almost destroyed us.
Total transparency always has a totalitarian purpose.
Today’s Europe is the opposite.
President von der Leyen: seize this opportunity for Europe. Here, the subjects do not serve the powerful. Here, the state is at the service of the people.
Mathias Döpfner, CEO of Axel Springer