The mantra “regulation stifles innovation” is often used when discussing regulatory proposals that impact technology companies. However, it’s time to challenge this catchphrase and call out its bluff. This year, with numerous elections taking place worldwide, tech companies are engaging in lobbying efforts to establish relationships with newly elected leaders. These companies are spending more money on “public affairs” to advance their private interests.
When it comes to artificial intelligence (AI), warnings about regulation choking off innovation have resurfaced. The EU’s AI Act, set to take effect next year, has been criticized for favoring knee-jerk regulation. But let’s pause and question the premise of this charge. Regulatory efforts can vary greatly, and the outcomes can be diverse as well. Some regulations may foster innovation by ensuring competition, while others that cut budgets on higher education may hinder it.
Regulations have actually led to many innovations in various sectors. For example, laws aimed at reducing CO₂ emissions have spurred the development of energy-efficient cars and appliances worldwide. Tech companies themselves benefit from rules that provide limited liability for content shared on social media platforms through the US’s Communications Decency Act section 230.
However, the notion that regulation should not be imposed if it stifles innovation is misguided. It implies that innovation is the most important objective while disregarding other crucial goals such as protecting fundamental rights or ensuring fair competition and national security.
In fact, there are instances where unrestricted innovation can stifle democracy and impede the regulatory process itself. Disinformation already undermines trust in electoral processes, even without evidence of manipulation claims being substantiated. Additionally, AI’s ever-changing nature poses challenges for oversight due to its highly personalized development through machine learning.
For decades, major tech companies have enjoyed a hands-off approach from US regulators and until recently from EU lawmakers as well. They now attempt to convince us that any restrictions imposed on them will erase all the positive impacts brought by the internet for billions of people.
Political leaders must not fall for this spin but instead prioritize tech regulations that strengthen democracy and uphold the rule of law over succumbing to lobbying efforts by Silicon Valley executives who prioritize economic interests above all else.
It is crucial to revisit this mindset since unregulated technology poses historic pressure on democracy itself. The claim “regulation stifles innovation” has become an influential lobbying presentation but should not deceive newly elected leaders worldwide who must protect democratic values against disruptive technologies’ potential harm
