Corporate regulation by information: democratic deficit and overcoming the dangers of the new regulatory paradigm

Editors: Borghi, M. and Brownsword, R.

Pages: 67-86

Publisher: Routledge

Place of Publication: Abingdon, Oxon, England and New York, US

DOI: 10.4324/9781003242987

Abstract:

Globalization has resulted in regulatory gaps that are being filled by alternative forms of corporate “regulated self-regulation” that broadly comprise self-regulation that is legally enforceable and that which is enforced through non-legal mechanisms such as social or market ‘penalties’. The former is typified by criminally-backed compliance, exemplified by the corporate “failure to prevent” offences, but the policy commitment to maintain the viability of the offending corporation, through the use of deferred prosecution agreements, results in a deterrence deficit. The non-legal enforcement mechanism, in which social activists and non-governmental organisations play a significant role as regulatory participants, is an important counterweight to this deficit. However, while information about corporate activity is the glue that motivates and binds participants in the non-legal arena, the algorithmic practices of large online intermediaries have led to disinformation and a reduction in the supply and exposure to public interest news. Since the regulation of technology firms to address the disinformation problem poses perhaps insurmountable complex challenges, and risks undermining free speech, the need to address the democratic deficit, and tackle corporate crime, is best met through incentive regulation to bolster the traditional news media and establish a fair market in the supply of public interest news.

Source: Manual