The Complex Relationship Between Internet Regulations and Innovation

When you use the internet, your information can be shared and used by anyone. That’s why the internet has a set of rules that govern the information you share. It’s what prevents people from accessing certain types of content, such as child porn or sex sites. The rules also protect you from identity theft and other forms of fraud.

For years, many large online platforms acted as though they were immune from regulation — a result of decisions like the Reno case and Section 230 of the Communications Decency Act that gave them broad immunity from liability for user-generated content and engendered cultural assumptions that regulators would only slow innovation. Now, those assumptions are beginning to shift. In response, policymakers are rushing to enact major new laws that could fundamentally alter the way we use the Internet.

But they should take care before they do so. As this new Copia Institute report demonstrates, the end result of these changes does not appear to be an improved Internet where online platforms become more responsible for their users’ privacy and speech interests; instead, it looks more like a less open Internet that allows governments greater ability to abuse those large companies for their own purposes.

The authors of this new report draw on Complexity Theory to show that, contrary to popular myths, the impact of regulatory changes on Internet innovation is not linear and that distinct combinations (or configurations) of factors correlate with different outcomes. By identifying those factors, the authors can help policymakers better understand the complex relationship between internet regulations and a nation’s innovation performance.