We tend to think this is going to end up being a very bad idea indeed:
The EU Digital Services Act (DSA), which goes fully into force on in-scope digital services later this month but is already being applied on a sub-set of larger platform providers like Meta, makes provision for charging these so-called very large online platforms (VLOPs) and very large online search engines (VLOSE) to help fund the cost of the bloc’s oversight of their businesses.
The regulation stipulates that the amount charged annually should take into account the costs incurred by the European Commission, which is the primary enforcer of the DSA on VLOPs and VLOSE; and be “proportionate” to the size of the service (based on average active monthly regional users) and also factor in the provider’s “economic capacity”, or that of the designated service (or services) they offer. (In Meta’s case, it provides two services which are designated under the DSA: Its social networks, Facebook and Instagram.)
Now, yes, some of us here aren’t all that keen on the EU itself. Some have even campaigned against it - but there is no ASI “view” on the organisation. So this isn’t about the EU specifically.
It’s also not about regulation - although we have a well known antipathy to many forms of it around here.
This is, rather, about something very specific, the setting of that budget.
We know, from C. Northcote Parkinson, that the motivating force of a bureaucracy is simply the survival of that bureaucracy. Once that is achieved it is the growth in the budget of that bureaucracy and the associated headcount. Given that there can be no useful measure of the output of a bureaucracy that’s just what the motivating forces are.
This is simply a revealed truth and is why we do now have more Admirals than ships, why the MoD now has more than one bureaucrat per sailor or soldier and also what gave rise to Ronnie Reagan’s joke (the punchline of which is the D of Ag bureaucrat crying at his desk because “My farmer died”).
OK, we know this. So now we have a bureaucracy to “monitor” certain companies. But the budget is not determined by what taxpayers are willing to pay for such monitoring (not that that’s much of a limitation at EU level) nor, in fact, by anything very much. The more the bureaucracy spends - that is, the greater the desire for a higher headcount, and expanded budget - the more the captive companies under the law will have to pay.
We do not expect this to work out well. In fact, we’ll make a prediction.
Per the Commission, the total pot of supervisory fees it has collected from VLOPs/VLOSE for 2023 is €45.24M (~$48.7M).
That’s not going to remain about €45 million. That’s going to go north at 15 to 25% a year soon enough.
Come back and prove us wrong in 20 years.
We do know that Parkinson is right. And the nutshell argument about bureaucracy is that to put bureaucrats in charge of their own budget is to put children in charge of the sweetie shop. An amusing idea leading to hyperactivity but no long term good will come of it.
This isn’t a good idea.