The impact of the Internet on Democracy and Democratic values: Fake News, Manipulation and Destabilization

Dan Shefet
Thursday, February 8th, 2018

“It is wrong and immoral to seek to escape the consequences of one’s acts.”

Mahatma Gandhi




Democracy has become a shared value around the world.

It not only embodies the idea of representative government, but also of human rights.


Indeed, the term has become synonymous with a set of fundamental values which we as citizens respect and our government is deemed to protect.


Unfortunately, we are faced with increasing challenges to democracy both from within our borders and from our neighbors.


One of the main consequences is enhanced exposure to manipulation of information, the electoral processes and ultimately our minds.


The Dark Side of the Net


There is no need to reiterate praise of the Internet and the wonderful gifts it bestows upon humanity in allowing inclusiveness, education, communication and empowerment.


Enough has been said and written about the overwhelmingly auspicious features and qualities of the Net, but just like any other technology, the Net also has its dark sides.


This essay will not deal with those dark sides as in “Dark Net”, but with the impact of the Internet (The Web) as such on individual integrity, dignity, tolerance, democratic values and ultimately world peace and stability.


These consequences are often “justified” in the name of free speech and one of the favorite theories advocated to that end is that free and unregulated speech will allow the Net to autoregulate. Egregious content will more or less automatically disappear.

Given that the Net will regulate itself any other regulation is unnecessary and constitutes a violation of Free Speech, it is believed.


The concept of the “Marketplace of Ideas”


The concept often referred to under this theory is that of the “Marketplace of Ideas”: Just like the physical Marketplace will find its equilibrium under the weight of the “natural forces” of supply and demand, so will content on the Net regulate itself under the influence of similar “natural” forces.


As a metaphor The Marketplace of Ideas dates back to the writings of Milton, and as a legal theory it can be traced back to the late US Supreme Court Judge Oliver Wendell Holmes in the case Abrams v. United States (1919): “The ultimate good desired is better reached by free trade in ideas — that the best test of truth is the power of the thought to get itself accepted in the competition of the market” (Abrams vs. United States, 1919).


The theory is generally that ideas will “fight each other” in open debate and that the “best idea” (whatever that means) will survive.


It draws inspiration from a sort of Darwinist or utilitarian model and it was actually also used by John Stuart Mill.


The Marketplace of Ideas is constantly quoted in debates on Free Speech without any detailed definition or explanation as to how it is deemed to work its wonders.


The theory leads to at least 2 analytical misapprehensions since it implies that not only will «the best idea survive», but also the best technology.


This is based on (1) an erroneous understanding of the current business model / an archaic application of Malthusian growth theory within the parameters of said model and (2) a failure to properly identify the importance of the cost side of the equation.




The Tech Giants are not at the mercy of the marketplace. They control the marketplace. Their dominance will not be curtailed by market forces and certainly not as a consequence of a restricted number of potential users arguably limiting growth.


True the market reflects potential growth and expected returns that may be unrealistic, but we are not witnessing a bubble.


This is not dot-com days.


IT advertising and consumer attention (addiction even) have solidly eclipsed alternative channels and real-time bidding, echo chambers and referencing (just to name a few substantial revenue generators) have proven their efficacy and attraction both to investors and users.


Applying a Malthusian « Limit to Growth » analysis (remember Dennis Medows?) is seriously flawed.


Metcalfe has helped us understand the exponential character of networks and the power of controlling them. Once created the network becomes self-fulfilling.


We are not witnessing static product penetration, but vertical diversification and when the network is controlled new products are almost sure to capture the market.

The network becomes the market.


What we are witnessing is a market controlling market forces and not the other way around.


Barriers to entry are almost insurmountable.


Limits to growth are not a function of the number of users, but of the products peddled and when the market is controlled the first variable is insignificant and even irrelevant.


Take an example: Facebook’s Lab 8 is developing body language interfaces (which according to some analysts amounts to thought control, but that’s an entirely different story). This will result in new products just like the internet of things, self-driving cars, household surveillance sensors, glasses (they’ll be back), AI etc. and these new product boons are and will be controlled by the existing players. It is of no concern to their growth that these products will be peddled to an existing customer base – on the contrary.


In addition,Schumpeterian disruption is neutralized. Take blockchain as an example. This technology could challenge the titans, but we know what will happen: They develop their own blockchain technology or acquire it from startups – even at the seed stage.


No VC or PE fund manager would take a substantial position unless it was part of such a strategy.


True we will still have the occasional IPO, but only with guaranteed underwriting.


The dream of startups today is not to attain substantial market participation, but to be sold to the titans. Such deals whether a combination of earn-outs, warrants, swaps and / or cash are all extremely sweet and the war chest is almost unlimited (imagine if the tech titans start leveraging!).


The Wendell Holmesian «Market Place of Ideas» has become a mere fiction: The combined economic, cultural and psychological power vested in the titans creates an entirely new economic paradigm.




In addition, the cost side sustains such consolidation: Imagine if a bank would be relieved of its compliance obligations.


The average cost ration of compliance to revenue in the finance industry is substantial.


This is one of the real reasons why accountability is rejected – not the promotion of free speech and democratic values.


Regulation of the “Marketplace of Ideas”


Let’s take a further critical look at this concept of the Marketplace of Ideas.


The word “Marketplace” designates some sort of trade or commercial transactions and raises connotations of commodities or units of currency.


Are ideas to be compared to commodities or units of currency?


The author strongly objects to any such analogy.


Assuming the opposite, let’s analyze how the concept of the Marketplace may be applied to “ideas”.


The notion of the “survival of the fittest idea” is inherent in the theory and the belief that just like the “Marketplace” ensures the dynamics that lead to the survival of the “best product” or “best economic agent” so will the unregulated” battle of ideas” weed out the “weaker ideas” in favor of the stronger – so goes the theory.


The “real “Marketplace is however far from unregulated.


Even in the most liberal of societies do we find regulations of the “Marketplace”.


One of the best examples is that of anti-trust. If the Marketplace i.e. the interaction between free economic agents would regulate itself so that “the best commodity/idea will survive”, why introduce antitrust legislation?


Obviously, the marketplace is distorted if there is no free exchange of commodities. Consolidation and monopolies impact prices, output, product and service development, variety etc.


From a historic perspective, however, the debate was heated when the first instances of governmental intervention to liberate the economy from monopolization were introduced.


We have long since crossed that bridge and even the most market driven societies subscribe to some measure of antitrust-regulation.


Once it has been accepted that the marketplace may be distorted and produce perverse economic effects including barriers to entry of newcomers, predatory pricing and elimination of competition, it must be accepted that society and the Marketplace in particular require regulation against the nefarious consequences of concentrated market power.


Society and consumers end up paying the price. There is no need to justify antitrust regulation.


It seems obvious to us today that a Marketplace cannot exist without such regulations.


Failure to regulate leads to restriction of liberty – not to the opposite.


Even the staunchest supporters of the free market which seem to be the theoretical foundation of the Marketplace of Ideas would not argue against a certain level of environmental protection, consumer protection, anti-trust, financial regulations, product liability etc.


Actually, the marketplace of ideas far from justifying absence of regulation demonstrates exactly the opposite: The need to protect values through regulation.


The metaphor of the marketplace of ideas is appropriate, but it demonstrates that regulation is necessary. Marketplace auto-regulation is a fiction.


If we analogize this state of affairs to the Marketplace of Ideas, we see that auto-regulation is no less a fiction.


The unique concentration of information on a few corporate giants today should cause us all not only to fear the consequences of information control (never in history has so much information been controlled by so few), but also seriously to consider whether some sort of adapted antitrust regulation should be put in place on the Net just like we have it in the real Marketplace.


Survival of the fittest


The second critique against the Marketplace theory is based on its “survival of the fittest” axiom.


What is the “best” or the “fittest” idea? “Best” for whom: consumers, manufacturers, society?


“Market participation” i.e. dominance is not a pertinent criterion of truth or intrinsic societal value. The “virality” of content has no bearing on its validity.


One may question whether the Marketplace of Ideas has not “gone bankrupt” already or at least demonstrated its inability to function as the great hand of equilibrium allowing the “best idea” (whatever that means) to prosper.


The Marketplace of Ideas does not work as a regulator because it has no cost, no perishable goods and no supply and demand structure.


The consolidated nature of “commodity output and price control” and the lack of common currency cause it not to function in accordance with the theory.


It has no consensual measure of value. In the Marketplace of Ideas, the “best idea” is not the most truthful, but the most commonly shared. “Value” is based on the heuristic conviction of the “purchaser” and often causes artificial appreciation of ideas with no other “value” than statistic spread.


In addition, the marketplace is not unique, single or even global.


On the Net ideas are exchanged in a number of distinct and almost closed marketplaces. “Bubbles” and “Eco chambers” with groups of likeminded “consumers” open to consumption of ideas by their favorite “manufacturers” replace the unique character of The Marketplace.


There is no other criterion of truth than their joined embracement and celebration of the ideas circulated within the group.


No other idea will penetrate the group and the struggle between competing ideas becomes a ludicrous metaphor.


The idea lives forever. It has no costs. In the real Marketplace at least, some sort of cost based selection will lead to removal of unwanted products from circulation. This does not apply to the Marketplace of Ideas.


Necessary regulation


We saw what happened to the capitalistic system as a result of subprime abuse.


Toxic zero asset values contaminated true economic and financial assets and caused a systemic collapse of the financial system worldwide.


The marketplace did not regulate itself. Just like the demise of true financial assets do we witness the value of Free Speech being diluted by the defense of toxic speech. Destruction of real values as a consequence of dilution by toxic values “sub-primed” the entire capitalistic system.


Do we want to see Freedom of Speech being “sub-primed”?


We must learn from the analogy to the “Real Marketplace”.


The question is not regulation, but the terms and implementation of regulation and first of foremost the structure put in place for the exercise of regulation. Who decides, who implements and who enforces?


These queries do not however make the case against regulation.


Digital Manipulation: Fake News is no news


The second subject that we will have to analyze, and which is directly related to the Marketplace of Ideas is the impact on democracy of unregulated “information” or “content”.


This leads us to debate on “Fake News” and on this particular point the difference between those that have, generate and control information and those that do not. The term “Pariah Bay” appropriately indicates that some cyber citizens possess information while others do not. These latter “Information Pariahs” are excluded from educated judgement. The Digital Divide is a major problem as such, but it relates to equal information access and net neutrality. It does not cover “Digital Manipulation” of those that do not have access to credible information.


Fake News has become a term designating potential manipulation of the electoral processes of democracies by dissemination of false information. The term implies a reference to “politically motivated false information” as opposed to “commercially motivated false information” (“Astro-turfing”).


The impact of information on society and ultimately world peace and stability is typically referred to under the heading of “Fake News


It is interesting that commercially motivated false information is regulated heavily in both the US, Europe and Asia.


To what extent such Fake News has had an impact on the electoral debate and results in certain countries may itself be open to debate and dispute, but it is beyond such debate and dispute that there is a correlation.


Fake News is actually no news, but it is not a fake problem.


Fake news is a predictable but not foreseen problem.


Even the Bible addresses the problem:


You shall not spread a false report (Exodus 23:1).


Greek mythology had a “goddess of rumors”. Her name was Fame and she was depicted as spreading false news destabilizing those that were seduced by her trumpet.


For the Roman historian the eponymous term “Tacitean Rumors “was coined.


The use of fake news for propaganda purposes is well known and a vivid example is the purported crucifixions of allied soldiers by the Axis powers during WW1 which caused widespread panic to both troops and the civilian population.


Rumors about Jews poisoning wells and devouring Christian children during the plague in the 14th century is another poignant example of the devastating consequences of Fake News.


The Harlem Riots in 1935 (caused by false rumors about the assassination of a Porto Rican born child) is a classic. No assassination had taken place. The boy was fine. He had suffered no harm, yet all hell broke loose on the back of pure fiction.


During WW2 a specific “Rumor Project” was launched under the auspices of the Office of War Information pursuant to Executive order of June 13, 1942. The purpose was to provide an informed and intelligent understanding of “the status and progress of the war effort, war policies, activities, and aims of the United States government”. The list is unfortunately long (National Archives, 1995).


The borderline between Fake News and different content is very difficult to draw.


The impact of Fake News on democracy – Communication Meltdown


If we relate “Fake News” to content which has a societal impact or in other words content which may change ultimately the course of history rather than the destiny of one person (which is typically referred to as defamation, denigration, harassment, cyberbullying etc.) we find borderline situations like the late French Prime Minister Joseph Caillaux who (had he not been driven to suicide by a heinous campaign against him personally) might have prevented World War 1.


The impact of the Internet on the democratic processes is not restricted to Fake News, but also intervention in electoral laws in many countries.


Most countries have laws that ban publication of opinion polls before the ballot takes place. In some countries, such restrictions apply a couple of weeks before, in other countries the time frame is different, but the principle is the same: The legislator has long since accepted that the impact on voter behavior of opinion polls is significant.


Unfortunately, the Internet beyond the reach of sovereign state regulations does not respect these laws and often allows not only opinion polls, but also unequal media time to influence the electoral process.


Many states provide forlegal and even constitutionalprotection of the integrity of elections in order to protect democracy against internet driven and empowered manipulation, but when faced with domains controlled by other jurisdictions the problem of defending democracy is no longer a question which may be solved by each sovereign state on its own.


It is about time that the international community realizes that the effect of toxic content on the Internet is just as dangerous as toxic emissions are to the atmosphere.


The difference is that the problem of global warming may well be eclipsed by the consequences of a “Communication Meltdown”.


We need a COP 21 on The Internet of Values.


Speech needs company,

Silence needs solitude.

Speech wants to conquer others,

Silence helps conquer oneself.


Speech makes friends or foes,

Silence befriends all.

Speech demands respect,

Silence commands it.


Speech is earth-bound,

Silence is heaven-bound.

Speech educates,

Silence exalts.

Speech is subjective,

Silence objective.


Speech has regrets,

Silence none.

Speech has limitations,

Silence is boundless.

Speech needs effort,

Silence a lot more.


Speech is human,

Silence is Divine.

While speaking you are heard by creatures,

In silence you hear the creator.


Silence leads to a stillness of the mind,

Then to introspection,

Then to self-cleansing,

Finally to liberation.


Prema Pandurang (“What is Hinduism? Modern Adventures Into a Profound Global Faith”, 2007, April)


Dan Shefet: Lawyer and Individual Specialist to UNESCO


French lawyer born in Denmark, Dan Shefet holds a Philosophy Degree and a Law Degree from the University of Copenhagen. Specialized in European Law, Competition Law as well as Human Rights in general and in the IT environment in particular, he participates in conferences in academic venues on IT Law, Data Privacy and Human Rights on the internet.


In 2014 he founded the Association for Accountability and Internet Democracy (AAID) the main objective of which is to introduce a general principle of accountability on the internet in order to secure the protection of human integrity.

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