We are at the heart of a double transformation of modern societies. On the one hand, digitization is synonymous with new forms of business and life. On the other hand, the shift towards sustainable lifestyles should also generate profound changes. Considerable efforts are being made in Europe for both. For example, a third of the 750 billion euros planned from the Corona reconstruction fund should be devoted to the digital and ecological renewal of Europe.
When it comes to digitization and sustainability, however, we face opposite developments. Sustainability aims for a more prudent use of resources and people, for a society that does not reduce life to consumption options. Digitization, on the other hand, has so far mainly meant “more”: more exploitation of resources, more energy consumption, more consumption.
Increasing consumption is at the heart of today’s most successful digital business models: shopping in the metro? TV in the park? Online games in the toilet? No problem with Amazon, Youtube and app store programs. Havens beyond the world of goods are disappearing. More and more time is spent on consumption. The fact that digital offers are associated with a huge ecological footprint rarely penetrates consciousness. This does not only apply to the production of new smartphones and computers, which devour large amounts of resources. Even before Corona, streaming video consumed almost as much energy as all global air traffic, and Amazon produced 200,000 tonnes of plastic packaging waste every year, about 5% of which ended up in the oceans.
The leading companies of this digital consumer capitalism have acquired key positions in the economy in 20 years by creating digital markets without which efficient economic activity is hardly possible today. The reconciliation of supply and demand, crucial for the proper functioning of markets, is done on the basis of data.
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Dominik Piétron works at the Institute of Social Sciences at the Humboldt University in Berlin and at the Einstein Center Digital Future.
One downside is, of course, that users are tied to digital systems through sophisticated strategies. If this is successful – as is the case with the operating systems duopoly between Google and Apple in mobile internet – the platforms can start charging consumers for access. The ongoing dispute in the EU between Apple and Spotify over the “Apple tax” – the 30% share of sales that Apple takes from transactions made in its app store – is just one example of the conflicts between market control platforms and actors who depend on them. Software providers, independent sellers on Amazon, independent courier drivers: they all pay for their market access and are largely exposed to the changing demands of unprotected market operators. There is only competition between providers in digital markets. The platforms themselves escape it and benefit from it.
Liberal thought in Europe has increasingly taken offense. He sees the market as a neutral place for a free play of forces and talents. Ordoliberal thought, so important for Germany, sees the state as the guarantor and designer of markets.
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Philipp Staab is Professor of Sociology at the Humboldt University in Berlin and at the Einstein Center Digital Future.
(Photo: Robert Poorten / oh)
Associated antitrust access was generally reactive in nature: it involved securing competition where it was threatened, or restoring it where it no longer existed. The main objective was to protect consumers against excessively high prices – a currency which is clearly insufficient given the free availability of digital services and the degradation of the global environment. In contrast, apart from the privatization initiatives of the 1990s and 2000s, proactive market design has largely been left to private companies. Its contemporary virtuosos are the platform companies of the commercial internet.
Europe now wants to change that. Along with the Digital Markets Law, Data Governance Law and Data Law, several market design programs for the digital economy are being planned. They represent the possibility of a new approach that complements traditionally responsive market design in the digital world with more proactive market design. In the law on digital markets, for example, particularly large platforms should be subject to special rules which are no longer only applied retrospectively, but should be introduced proactively. Many EU data policy initiatives are also aimed at breaking the market power of large companies.
The historic opportunity lies in an ecological market concept
With this approach of actively shaping digital markets, the EU is directly targeting the economic strength of large tech groups. At the same time, however, ecological aspects play almost no role. The EU is in the middle of the most ambitious market design project since the common internal market and, with the Green Deal, is driving what is arguably the biggest transformation project since industrialization. He intervenes deeply in the market and wants to change the destructive basis of our economy. And the two shouldn’t have anything to do with each other?
A historic opportunity lies in the systematic combination of the two aspects, in a green market concept that deeply integrates aspects of sustainability in digital and digitized markets. A good start would be in the area of data policy envisaged by the EU, where data flows in markets should be designed in such a way as to enable sustainable business models and consumption patterns. If, for example, we were to promote open data pools with comprehensive information on the ecological profile of goods, platforms could be forced to make this information accessible to consumers. This would make the environmental costs of the products visible. At the same time, these green databases offer the possibility of new business models: freely accessible information on the components and composition of products allow their recycling and could further close the cycles of materials, for example in the construction sector. . In short: It is high time to combine digital and green transformation. The way to achieve this is through the active and democratic design of markets.