We are in the midst of a double transformation of modern societies. On the one hand, digitization stands for new forms of business and life. On the other hand, the turn to sustainable lifestyles should also generate far-reaching changes. Considerable efforts are being made in Europe for both. For example, one third of the planned 750 billion euros from the Corona reconstruction fund should flow into the digital and ecological renewal of Europe.
When it comes to digitization and sustainability, however, we are dealing with opposing developments. Sustainability aims for a more careful use of resources and people, for a society that does not reduce a life to consumption options. Digitalization, on the other hand, has so far mainly meant “more”: more exploitation of resources, more energy consumption, more consumption.
More consumption is at the core of today’s most successful digital business models: Shopping in the subway? TV in the park? Online games in the toilet? No problem with Amazon, Youtube and programs from the app stores. The refuges beyond the world of goods are disappearing. More and more time is being devoted to consumption. The fact that the digital offers are associated with an enormous ecological footprint rarely penetrates the awareness. This does not only apply to the production of new smartphones and computers, which devour vast amounts of resources. Even before Corona, video streaming consumed almost as much energy as all global air traffic, and Amazon produced 200,000 tons of plastic packaging waste annually, of which an estimated five percent ended up in the oceans.
The leading companies of this digital consumer capitalism have secured key positions in the economy over the course of 20 years by creating digital markets without which efficient economic activity is hardly possible today. The bringing together of supply and demand, which is crucial for well-functioning markets, is done on the basis of data.
Dominik Piétron works at the Institute for Social Sciences at Humboldt University Berlin and at the Einstein Center Digital Future.
(Photo: oh)
A downside is, of course, that users are tied to the digital systems through sophisticated strategies. If this is successful – as is the case with the operating system duopoly between Google and Apple in the mobile Internet – platforms can start charging for access to consumers. The EU-pending conflict between Apple and Spotify over the so-called “Apple tax” – the 30 percent share in sales that Apple levies on transactions that occur in its app store – is just one example of the conflicts between market-controlling platforms and actors who depend on them. Software providers, independent sellers on Amazon, self-employed courier drivers: They all pay for their access to the market and are largely defenseless to the changing requirements of the market operators. There is only competition here between the providers in the digital markets. The platforms themselves elude it and make a profit from it.
Liberal thinking in Europe has increasingly taken offense at this. He sees the market as a neutral place for a free play of forces and talents. Ordoliberal thinking, which is so important for Germany, sees the state as the guarantor and designer of markets.
Philipp Staab is Professor of Sociology at the Humboldt University Berlin and at the Einstein Center Digital Future.
(Photo: Robert Poorten / oh)
The associated anti-trust access was usually of a reactive nature: the aim was to secure competition where it was threatened, or to restore it where it no longer existed. The primary goal was to protect consumers from excessively high prices – a motto that obviously falls short in view of free digital services and global environmental degradation. In contrast, apart from the privatization initiatives of the 1990s and 2000s, the proactive design of markets was mostly left to private companies. His contemporary virtuosos are the platform companies of the commercial internet.
Europe now wants to change this. With the Digital Markets Act, the Data Governance Act and the Data Act, several market design programs for the digital economy are being planned. They stand for the possibility of a new approach that supplements traditionally reactive market design in the digital world with a more proactive market concept. In the Digital Markets Act, for example, particularly large platforms are to be subjected to special rules that are no longer just applied retrospectively, but should be introduced proactively. Numerous EU data policy initiatives are also intended to break the market power of the leading companies.
The historic opportunity lies in an ecological market concept
With this approach of actively shaping digital markets, the EU is aiming directly at the economic power of the large technology groups. At the same time, however, ecological aspects play practically no role. The EU is in the middle of the most ambitious project of market design since the common internal market and, with the Green Deal, is driving what is probably the largest transformation project since industrialization. It intervenes deeply in the market and wants to change the destructive basis of our economy. And both should have nothing to do with each other?
A historic opportunity lies in the systematic combination of both aspects, in a green market concept that integrates sustainability aspects deeply into digital and digitized markets. A good start would be in the area of data policy envisaged by the EU, where the data flows in markets would have to be designed in such a way that they enable sustainable business models and modes of consumption. If, for example, one were to promote open data pools with comprehensive information on the ecological profile of goods, platforms could be obliged to make this information accessible to consumers. This would make the environmental costs of the products visible. At the same time, such green databases offer the possibility of new business models: Openly accessible information about the components and composition of products enables them to be recycled and could further close material cycles, for example in the construction sector. In short: It is high time to bring the digital and green transformation together. The way to do this is through the active, democratic design of markets.