A layered governance approach to regulating Big Tech

Abstract

After decades of unregulated growth, the world's largest technology companies have now attracted the attention of regulators in both Europe and the US. Regulating “Big Tech”, however, has proven to be challenging, partly because of their size, but also because of their strategic importance in maintaining a competitive advantage between western nation-states and rising economies in Asia. The paradox is that regulators hope to create a regulatory regime that constrains the oligopoly power of Big Tech without quashing their capacity to innovate. Traditional regulatory theories are not equipped to address this paradox. Drawing from neo-institutional theory, we propose a “layered governance” model of regulation to address this problem. Layered governance is an emerging regulatory regime that distributes power across multiple government and non-government organizations while providing the regulated organizations with a degree of flexibility and choice by the organizations themselves as to the mode of regulation. We elaborate how layered governance is consistent with current understandings of regulation as derived from neo-institutional theory, elaborate how it differs from traditional approaches to regulation, and discuss how a layered governance approach to regulating Big Tech may evolve in the future.