Data, Big Tech, and the New Concept of Sovereignty

Abstract

Despite the massive amount of data and sophisticated computing capacity, Big Tech has evolved into the new data sovereigns that governments must accept in the data era. Data mining and application determine the true value of data; in this regard, Big Tech is tough to replace. The so-called “Fourth Industrial Revolution” is reshaping the emerging global order, and at its core are Big Tech firms. They not only express their concerns and spread their values and ideologies but also make their strong presence felt in international affairs, as Big Tech appears to be transforming into a new type of Leviathan. With access to significant amounts of data, the rise of Big Tech poses a challenge to sovereignty’s exclusivity and superiority, assuming the position of de facto data sovereign. The article holds that the Big Tech firms, by virtue of their technical advantages, have not only deconstructed the traditional concept of sovereignty, but also formed a complex symbiotic relationship.

Introduction

The Internet’s comprehensive penetration into human lives and the widespread use of digital devices have led to the emergence of big data and updated analytical techniques, which are transforming trade and upending global politics [1]. Even more than other elements of the global economy, data are intertwined with power [2]. The empowerment of numbers intensifies the structural impact and subversive challenge of the modern technological revolution on traditional society, economy, and politics. This new form of digital power has substantially rearranged the conventional power structure. On the one hand, the government relies increasingly on data to manage the state and society, and digital authoritarianism and technical autocracy are maturing as a trend. On the other hand, Big Tech firms have formed a “digital empire” that is relatively independent of political authority by controlling data and monopolizing technology.

The digital era necessitates long-term technological accumulation, massive amounts of financial investment, and an exceptional talent pool, prerequisites that can only be met by a handful of incredibly powerful large technology organizations. In the current period of booming growth, the profit-driven orientation of capital and the reliance of technology on capital have resulted in a substantial increase in capital investment in artificial intelligence by established technology firms. The rapid growth of unicorn companies is also closely related to the massive capital investment [3]. With extensive personnel and financial resources, these large technological companies, Big Tech, developed a technical monopoly and progressively dominated the science and technology market, thereby establishing a pervasive and powerful impact. On this premise, Big Tech actively sought cooperation with public power and eventually infiltrated the government system through the provision of technical support, public services, and public products, influencing the operation of public power. Consequently, a superpower that existed outside the old system rose fast.

The government frequently lags behind Big Tech in data gathering, algorithm research and development, talent reserve, capital investment, and technological application, because, unlike the government, Big Tech has extensive financial resources, specialized tasks, and clear objectives. With the widespread use of data governance in the national governance system, the improvement in the national governance system will rely more and more on big data, new algorithms, and large technologies that master and manipulate these technologies [4]. This circumstance may result in three direct outcomes: First, the greater the prevalence of data governance, the greater the government’s dependence on data and Big Tech that control it; Second, the greater the government’s dependence, the greater the digital power granted to Big Tech, and the greater Big Tech’s ability to act; and third, the greater Big Tech’s ability to act, the larger the data acquisition scale, the faster the data processing speed, the more services provided to the government, and the greater the efficiency, the greater the stranglehold. This closed cycle includes the trade-off between power and reliance, which will eventually alter the power balance and power structure between the government and Big Tech. Apparently, the modern government is still at the center of the power structure, but Big Tech with superpowers have quietly constructed one power vortex after another with strong power and unclear boundaries, thereby creating a multi-center, decentralized power structure [5].

Big Tech’s influence and stature are constantly expanding in the modern world with presented by “oligarchization” [6, 7]. They typically participate in international politics in addition to displaying their talents in nation-states. Big Tech, which has unquestionable advantages in capital, information, and technology, has a growing voice and influence in matters of resource acquisition, commodity development, social mobilization, and rule-making, and can occasionally even have an impact on a country’s political climate. It actively engages in global governance, spreads its influence to other parts of the world, and helps to build the international system [8]. Smart operating systems such as Android and IOS and smart applications such as Facebook, Twitter, Google, and Amazon, these giant firms play the role of platforms, providing underlying technologies that others use to build or facilitate their own businesses [9]. Pepper Culpepper and Kathleen Thelen call this “platform power” [10]. In the information sector, the digital market firmly in the hands of emerging Big Tech firms with using their technological advantages. Endowed with these advantages, Big Tech is playing an increasingly significant role in international economics and politics [11]. For instance, when the Australian government ordered Facebook to pay for news content, the social media giant quickly retaliated by censoring all content from Australian news outlets. Subsequently, Australia’s domestic and international affairs had to be compromised due to this event [12]. Big Tech has forced sovereign states to cede control, causing everyone to recognize a simple fact: This dispute between Australia and Facebook is actually a power struggle between Australia, as a sovereign state, and multinational Big Tech firms over the regulation of digital media platforms. Facebook is no longer merely a large digital corporation, it has evolved into a potent political actor with the authority and power to negotiate with sovereign states. Therefore, more Big Tech firms will participate in the global system, accelerating the trend of increased subject diversity in international interactions.

The Power of Data: A Key Aspect of Sovereignty

The concept of sovereignty is one of the most important political ideas in human history and has been with us for more than hundreds of years, now, it has spread to all the regions with the industrial revolution and the globalization process. After outlasting all rivals, it has eventually become the fundamental tenet of the contemporary international order. The concept of sovereignty has faced fresh difficulties with the emergence of the digital sphere. Data, according to Don Tapscott, will be the most valuable resource in the digital age [13]. In essence, data are a special type of information that is created after fragmented information has been digitized, logicalized, summarized, calculated, and processed. Due to the inherent communication qualities, data, and general information function as circulation tools in economic processes. The difference is that general information has a smaller influence on economic activities and frequently reflects people’s unique circumstances; meanwhile, data can be gathered and calculated in such a way that - by establishing comprehensive indicators or generalizing group characteristics - more comprehensive and general conclusions can be drawn, offering more systematic and accurate bases for economic decision making. Conceptually speaking, data sovereignty means that any information that is located in a nation is governed by its laws. Although this notion is valid in the real world, it is vague in the online environment. On one hand, the mobility, fragmentation, and dispersed nature of the data make it challenging to contain it within the bounds of geographic space; on the other hand, the long history of cyberspace self-regulation prevents the involvement of sovereign governments in the global data governance system. The stakeholder model, which promotes equal participation of international organizations, businesses, technical groups, and private institutions, precludes the participation of sovereign governments.

Given that the digital realm is a fluid, borderless, and constantly changing universe and has an unspecific setting maintained by the physical laws of reality, subjects of different natures and identities can access the digital space, establish independent network nodes, and exchange information. Their initiative, creativity, and information of these various types of data accumulated in their activities are also parts of the digital space. A few technological groups with the grand ambition of altering the world intend to create a new Royal order in this heterogeneous space because the different nature of space previously gave rise to the notion that the principle of sovereignty is out of date. The structural effects and disruptive threats of the new technological revolution on traditional society, economy, and politics are further pronounced by the empowering qualities of the digital age. Traditional power systems have undergone a significant rearrangement as a result of this new sort of digital power. Digital authoritarianism and technological tyranny are becoming increasingly apparent as governments rely on data to run the country. Meanwhile, Big Tech firms have created “digital empire” that are largely independent of governmental control, thanks to their monopoly on technology and control over data.

For the characteristics of the digital space, its power sources and contents are diverse. Concentrating different power levels in the hands of a single actor is difficult; instead, they demonstrate a decentralized nature. Behind this pluralism, a complex disturbance is created by various demands of the state, capital, and individuals in the modern world under the influence of new spatial characteristics. Direct replication of the Westphalian system in the digital space is not only technically impossible but also not in the economic and developmental interests of actors in the digital space, including all sovereign states. Traditional hierarchical relationships among actors based on power in real space have become hazy. The established political order and state - capital interactions in the physical space are in danger due to the dominant control of Big Tech firms over the digital space, particularly over social media, and finance [14]. Therefore, comprehending, integrating into the digital realm, and creating a new system in which all sovereign states can exercise influence as central actors in the contemporary international system is a common decision for them. For the major powers in the international system, such comprehension, integration, and creation are even more crucial. The competition among major powers in the real space is also mapped onto the digital space, which constitutes an inherent driving force for major powers to enhance their influence in the digital space through various modes. Due to the close relationship between digital space and real space, digital space has become an important part of the strategic radiation capacity of major powers in the international system [15].

David Harvey states that the spatial logic of power and the logic of capitalism determine how imperialism operates and that at least one of these is at the root of all imperialist acts of conquest and colonization [16]; however, both fundamental logics start changing to economic and political logics in the digital age that embodies the capital will. Modern imperialism accomplishes its dual goals of speeding economic accumulation and infiltrating political ideology through the development of various network communities. Harvey contends that economic hegemony - a form of capital expansion intended to gain dominance, rather than violence and war - is the new form of aggression used by capitalist powers. Harvey discusses the origins of imperialism in terms of the dialectical relationship between the territorial logic of power and the logic of capital by linking the territorial expansion of political power to the spatiotemporal diffusion of capital accumulation [16]. For Harvey, the so-called “capitalist imperialism” is based on the contradictory fusion of two elements: imperialism as a particular political program whose actor power is manifested in the abilities to govern a certain territory and mobilize human and natural resources to achieve political, economic, and military goals; imperialism as a political and economic process spreading in space and time, where capital domination and use occupy primary positions.

Harvey’s “spatiotemporal fix” theory, especially the study of two logical power relations, may be an important source of insight into data sovereignty [17–20]. The arrival of digital existence constructed by big data is a huge social event, and we cannot deny the disruptive changes brought by such an arrival to the existing world; however, while rejoicing in the dividends brought by digital existence, we must also pay attention to the fact that the digital and social nature of network fields and the algorithms and records of big data itself have triggered the rupture of intersubjectivity, accelerated the scarcity, acceleration, commodity, and consumption of space and time, therefore, caused the uneven distribution of space and time resources. To some extent, digital existence is free, but it is ubiquitous in the guidance and discipline of capital and power [21]. As Harvey notes, all problems can eventually be reduced to questions about space and time. Harvey’s “spatiotemporal fix” theory is a special method to solve the capitalism crisis through time delay and geographical expansion [16]. Specifically, “temporal repair” is the process of adjustment of capital accumulation within a fixed spatial structure, whereas “spatial repair” is the temporal process of seeking external spatial transfers when a “temporal repair” fails [22]. In the era of big data, spatiotemporal changes reflect the factual logic of society as a product of modernity. As said, “the dynamic mechanism of modernity is derived from the separation of time and space and their formal recombination.” [23] All productive activities, rather than being an immutable or permanent collection of elements, are processes that interact between temporality and spatiality.

According to Harvey, space and time always express some kind of class or other social content in social affairs and often become the focus of intense social struggles [24]. This definition presents the importance of time and space as social resources. In digital existence, power and capital perform tacitly with space and time, including their modes of operation changes due to spatiotemporal transmutation. With the help of digital space, capital and power not only can reach a wider space in a faster time but also possess and dominate spatiotemporal resources more implicitly.

In terms of power change, in general, mobile power in digital existence mainly includes the power of the network, and the power to freely access and use the network; however, digital life must rely on various spaces of differences, which are set by capitalists and technological elites together. The basic principle is to maximize benefits by setting different rules of the field; as a result, participating in space production and having access rights is often difficult for the general public. This situation also shows that in digital existence, power is displayed in the form of a small group of technical elites looking at the majority of the general public by setting the corresponding space; however, the operation of social domination is achieved through selective inclusion and exclusion of certain functions and people in different spatiotemporal structures [25]. In this power transmutation process, technological giants transform their technological elements into power and social elements into daily digital practices and regulate individual behaviors. This power display is spatially regulative and temporally always present, so daily individual behaviors and activities are strictly guided, monitored, and controlled.

In terms of capital change, the potential crisis of capital in a traditional finite geographical space is dissolved by the infinite digital space. Capital is a revolutionary mode of production, always restlessly searching for new forms of organizations, technologies, modes of production and exploitation, and objective definitions of space and time [26]. Capital brings its will to expand to the maximum with the help of fluid space and time. The capital operation in traditional society is usually bound by the objective territory; sometimes, carrying out a convenient exchange of space is difficult because the facilities built based on material space are difficult to move. Nevertheless, in the mobile space, capital can convert this material space into virtual symbols, that can easily occupy and monopolize space and time, thus, depriving individual time and space. Capital occupies market share by injecting money into various consumption fields, i.e., it monopolizes the digital space through its possession of material facilities that support the mobility space. Thus, individuals are forced to perform digital practices in the space prescribed by capital and power. Susan Strange vividly describes this process as “leakage,” [27] that is, “leaking upwards, sideways, and downwards.” National sovereignty is gradually eroded, weakened, or even partially replaced. National sovereignty is becoming looser and more diverse, manifested in the sharing of authority by other entities. As sovereignty changes, territory inevitably undergoes changes as well. Traditional territory mainly refers to physical spaces such as land, territorial waters, airspace, and territorial seas, which are fixed and have determinate boundaries. However, under the conditions of the new technological revolution, the determinate physical boundaries of space can be blurred by the network, and the traditional territory is no longer determinate or fixed [28]. The essence of globalization is the expansion of capital on a global scale. Within this process exists an inherent tension between territorial logic and capital logic. Capital accumulation is a process of eternal expansion. More specifically, the deepening of globalization requires that multinational technology firms integrate global resources to maximize profits; they must also occasionally resist the constraints of state power. In this context, data sovereignty can be seen as crucial to succeeding amidst intense international competition as sovereign states look to “monopoly space” in new spatial forms [16]. Because sovereign states want “monopoly of spatio” in a new spatial form, data sovereignty can be seen as a key product against the backdrop of intense international rivalry [19].

There are multiple understandings of data sovereignty. For the purposes of this study, two of the representative positions were initiated. One theory holds that data sovereignty is a sub-category of network sovereignty and an extension of territorial sovereignty. Moreover, according to the technical characteristics of cyberspace, network sovereignty can also be further subdivided into “sovereignty on the physical layer of the network,” “sovereignty on the logical layer of the network,” and “sovereignty on the social layer of the network.”1 Sovereignty on the physical layer of the network involves a country’s sovereignty over computers, servers, mobile devices, optical fibers, switches, and other network equipment. This form of sovereignty has been unanimously recognized by the international community and falls under the territorial jurisdiction of nations. Sovereignty on the logic layer of the network involves a country’s sovereignty over computer codes, especially the communication protocol software responsible for network interconnection and transmission. Such sovereignty is mainly common governed by international organizations, including Internet Corporation for Assigned Names and Numbers (ICANN), Internet Society (ISOC), etc. Sovereignty on the social layer of the network is more complex and involves competition between countries over the control, processing, and circulation of massive amounts of big data. Currently, there is no widely accepted data sovereignty model. There is another theory, which is directly opposed to the previous theory, that uses the term “data sovereignty” to refer to the possession and use of massive amounts of data by Big Tech in order to distinguish data sovereignty from concepts such as “Internet sovereignty” and “information sovereignty,” which are derived from traditional sovereignty theories [32].

If the latter of the two theories still carries the political meaning of traditional national security, then data sovereignty has entered the field of vision of policymakers and researchers along with cloud computing and big data mining. The data sovereignty involves a series of processes such as data collection, aggregation, storage, analysis, and use - all of which reflect the value chain of the new economy and the commercial value of data [33]. This kind of data sovereignty theory does not presuppose that data sovereignty is an extension of traditional territorial sovereignty in the data field; instead, it returns to the original theory of sovereignty and regards data sovereignty as the possession and use of data. Therefore, the entity with sovereignty over the data may not necessarily be a country because a large amount of data is actually owned and used by multinational Big Tech firms.

Big Tech: Becoming the New “Leviathan”?

Expansion of Power by the Big Tech Firms

Although states are the leaders of the entire political, economic, and social system, in the digital world, Big Tech firms dominate computing power, algorithms, and data more strongly [34]. Chantal Mouffe proposed competitive pluralism, believing that algorithmic competition among platform companies would lead to the coexistence of diverse views [35]. However, Kate Crawford’s research shows that the lack of accountability mechanisms for Big Tech firms in algorithmic competition has, to some extent, increased their monopolistic power [36]. Compared with past industrial and financial oligarchs, the political-economic structure and capital power ownership of Big Tech firms have not undergone a fundamental change. As a large amount of surplus financial capital has pushed for the widespread use of digital technology in society, the combination of capital and digital technology has spawned many new models and new forms of business in the Internet field, promoting the development of productivity and the upgrading of quality. The digital economy centered around Big Tech firms has become the most prominent new economic growth pole in the world, while companies like Google, Amazon, and Facebook, supported by the US government, continue to expand into other countries and constantly absorb international market share to reap global data dividends and achieve high-speed development for themselves.

From the perspective of capital power ownership, the rise of Big Tech firms is the result of further expansion of private capital power, becoming the latest carrier of capital power and technology combination after the financial oligarchs. Since the Industrial Revolution, capital power has begun to form a social power structure of co-governing the world with more legitimate political power. It is precisely through the continuous iteration of capital and its forms that modern society has become possible, from industrialization and post-industrialization to contemporary globalization. For example, industrial capital represented by oil or power companies indirectly exerts its influence in other social fields by playing a role in basic needs such as energy.

The expansion of power by Big Tech firms is actually a new type of social power carrier created by capital utilizing data-centric social production methods and organizational mobilization patterns. Datum is the new factor of production that significant technological power has mastered. In the digital age, whoever possesses the data possesses the power. Joseph Nye has noted that one kind of contemporary global power shift is the diffusion of power from the state to non-state actors [37], a diffusion partly caused by the rapid development and transformation of information technology exemplified by the advent of the Internet.

The empowerment and decentralization surrounding the generation, supply, distribution, and use of data resources are creating a new mechanism for the production of power. In recent years, the digital technology revolution has advanced by leaps and bounds, and Big Tech has played a crucial role in promoting the construction of a digital ecology on a worldwide scale. Big Tech has formed a closed-loop “DNA” ecology based on its vast user base and relatively mature big data operation system, i.e., the linkage of three loops: data analytics, network externalities, and interwoven activities. This has created a complete digital industry chain from data production to value realization. Big Tech focuses on data resource collection and value generation to develop a network-scale effect and then constructs a digital ecosystem to continuously strengthen and expand the ability to deploy resources and rule-making power that transcends virtual and actual borders. The new technological revolution has created the digital era, and datum has become the most core element and means of production. This revolution has changed the environment of government governance, which will inevitably be transformed as a result. Datum has become the most important resource for government governance and a prerequisite for governance decision-making. While tech giants assume certain public service functions, they also erode the public governance dominant power that originally belongs to the state power scope. The further expansion of private capital power breaks the balance of rights and responsibilities of civil rights and public power that were originally maintained by the legal order of the state, and also directly challenges the power distribution pattern between the public sector and the private sector that has been formed in the industrial and information economy era.

In the digital revolution, some of the most important elements, such as algorithms, data, and computing power, are controlled by platform-based companies. Plans and leading practices for digital transformation are often pioneered by these platform-based Big Tech firms, making datum a new production factor and a critical strategic resource that has a global impact on economic production methods and forms of social governance. Data differ from strategy or knowledge in that whoever develops or acquires knowledge can deny access to others. In contrast, datum is, in principle, nonrival and partially excludable and can be simultaneously and repeatedly used by people, companies, and governments [2, 38, 39]. As a pioneer of the digital economy environment, Big Tech, which possesses a vast quantity of data resources, becomes the dominant force in this new power generating mechanism and an indispensable data power carrier [33]. In this context, Raven argues that “social entities form their influence and control over the state and society by possessing their own social resources and independent economic and social status” [40]. This social power, relative to state power, breaks through the boundaries of power solely held by state institutions. Foucault’s theory of power also believes that power in modern society is “decentralized,” and state institutions are just a limited domain of power [41]. In the field of data, this phenomenon of power diversification is even more evident. Big Tech firms gradually influence and dominate other entities by controlling large numbers of data resources, and power is no longer exclusively held by state institutions, but gradually becomes “decentralized.” At the same time, Nye believes that not all power is based on coercion or violence [42]. Some power is non-coercive or less coercive, known as “soft power.” “Social power is generally less coercive and is soft in nature, taking advantage of coordinated rights, influencing interests, applying pressure through public opinion, inducing, promoting, and compelling rather than directly making the other party comply.”

Data power is a new social power based on the advantage of controlling or processing massive amounts of data. By mastering the flow and distribution of the new production factor of data, it can provide vital virtual products such as digital goods, digital services, and information flow for the production of various industries, dictate the reallocation of physical, social resources, and the digital industry chain, value chain, and social operation mode formed around the development, production, and consumption of these resources, and provide fundamental arithmetic, data storage, telecommunications, and computing capabilities. With the development of big data, artificial intelligence, and other technologies, data can empower conventional means of production, increase the allocation efficiency of social resources, and provide greater economic value. In a knowledge structure characterized by rapid technological change, Big Tech firms have the increased ability to “internationalize” data and transform vast amounts of data into economic and strategic advantages [42].

“Unicorns” vs. “Leviathans”: Institutions and Functions of the Nation-state

Multinational Big Tech firms rely on their comparative technological advantages related to the Internet to force this huge group of social “unicorns” to the surface. A “leviathan” is defined as a political entity that has a monopoly on violence and holds power over life and death. When the “leviathan” and “unicorns”, as well as their corresponding new forms of social organization encountered, a new political landscape and power relationship is formed that will subsequently be revealed by political theory. This is an unavoidable question as well as a potential reality that could materialize at any time. In the politics of the industrial age of the 20th century, political power was closely linked to the political space it created and controlled. Moreover, the state was able to flexibly regulate the boundaries and scope of this space. In this traditional political space, all commercial and social life was circumscribed within impassable administrative boundaries. In the early stages of the Internet, many governments held monopolies over technology that enabled them to control information. In this sense, the “truth” that underpins the legitimacy of modern nations is manufactured, and the living space on which people depend is created by the state or autonomously by society but is undoubtedly subject to the ubiquitous control of the state [43].

The state has long been the ultimate sovereign power - that is, the center of power that governs and manages society. Indeed, the state power structure of human society has been in a monocentric state for a long time in terms of subject composition. Despite the increasing openness of national governance systems, many subjects outside the country can also participate in diverse and complex social issues. Nevertheless, they cannot exist as an independent center of governing power. However, with the recognition that “data is not just crude oil and gunpowder in the new era but also power,” has been widely supported [2]. The value of data is demonstrated. More importantly, in the era of artificial intelligence, the distribution of social resources is increasingly dependent on data. Moreover, data gradually becomes detached from its primary usage and develops into an important emerging social force - and even a new form of power. The emergence of new power production factors indicates that the mechanism of replacing power with technology will emerge, the channel for the transformation of technological advantages into power or power advantages will be opened, and the flow of power will occur.

From a global perspective, these new spaces beyond state power are constantly expanding, and new technological factors have created more autonomous spaces for society. Additionally, the “territorial” attributes of these spaces are being strengthened by new technological factors. In extreme cases, the ability and mechanism of the state to regulate society will also be weakened or even completely subverted by new technological factors. For example, the development of blockchain technology and the subsequent “decentralization” and redefining of information storage may subvert governments’ abilities to monopolize and manipulate the reporting of current events. Even if a nation possesses advanced algorithms, it will be unable to resist the complex algorithmic capabilities and possible coalitions of vast institutional and social forces. Multinational technology firms’ control over data, research and development, industrial value chains, and data generation and use may cause a collision between judicial jurisdiction and law enforcement power, resulting in blurred and overlapping boundaries between governments’ public powers. The extensive participation by and interconnections between various industries - such as the energy, communication, transportation, medical, and finance industries - will lead to dynamic complexity and a deep intermingling of security issues.

In the process of improving their competitiveness in the data market, Big Tech firms have become eroded by capital, and they have eroded the foundation of public power. One of the most obvious is to challenge the identity authority of the country as data sovereignty. Based on the derivative effect of algorithm technology, the digital platforms mastered by Big Tech firms have gained multiple comparative advantages related to data and the economy. Through these advantages, users can be pushed accurately, and then personal choices can be manipulated. Simultaneously, they have obtained de facto rule-making power, administrative law enforcement power, and even dispute adjudication power [44].

Due to digital technology and algorithms, Big Tech firms can now affect the political ecology of sovereign states. The growth of Big Tech firms has deepened governments’ reliance on their own technological and data capabilities, and some of governments’ social governance powers and even judicial dispute judgment powers have been diverted to platforms. The COVID-19 pandemic has greatly accelerated the growth of Internet technology firms. As people’s daily lives have increasingly moved online during this period, these firms have gained even greater economic power by leveraging personal data as assets. Additionally, Big Tech’s control over political communication has been further strengthened, which has given rise to concerns about their dominant influence over information dissemination and political mobilization. This trend poses a significant threat to the proper functioning of democratic systems [45].

Judging from the scale of the resources they possess, it is likely that Big Tech firms are already super actors comparable to countries. Moreover, many platforms are also trying to exercise a level of economic control in cyberspace that was originally only available to the governments, causing the boundary between the market and governments to begin to “drift.” The digital economic paradigm has changed the traditional service model, trade model, division of labor, and value creation mechanism. When many Big Tech firms promote their products or business models, they actually establish and enforce the rules of the game. For example, merchants or consumers can be selected to settle according to service agreements, licenses are issued to settlers through access rules, and Big Tech firms have the right to access the digital market. Moreover, the process of providing digital goods and services will also erode countries’ economic power. Immediately preceding the listing of the Chinese fintech firm, Ant Group, Jack Ma urged in a speech that the country’s existing financial regulation needs to be reformed and that Alipay and other financial services offered by Ant Group have been hit with traditional regulatory requirements. Judging from the results of the suspension of the listing, the “future digital currency” that Ant Group called for should not be led by enterprises. The expansion of its “fintech empire” touched the limitations of the country’s economic authority [46].

Finally, the influence of Big Tech firms has infiltrated the material and cultural lives of citizens, creating tensions with the inertia of political and cultural national governance. Technology has also changed the process of information diffusion and weakened the state’s control over information flows. With the help of search engine filters and algorithms, Big Tech firms with many users can determine what people can and cannot see. Together with phenomena such as “information cocoon rooms,” the government has achieved an intelligent “segregation” of the ideological lives of citizens. As a recent example, Big Tech firms, e.g., TikTok, Meta and YouTube have adopted restricting or labeling news from Russian state-run outlets, such as Russia Today (RT) and Sputnik to response the military operation in Ukraine [47, 48]. Simultaneously, platforms have either intentionally or unintentionally cultivated a large number of “opinion leaders,” and therefore, the monopolization of public opinion by the state is being disrupted by the private capital of Big Tech firms. The network information fission dissemination behavior represented by platform media will not only stimulate and promote risk events in virtual society but also make risk events in virtual society more difficult to predict and control, highlighting the amplification or polarization effect in cyberspace, which, in turn, may endanger national data security and legitimate rights and interests and even disrupt the stability of the entire society.

Regulation and Gaming to the Big Tech Firms

In the context of the information revolution, the world is highly interconnected. However, the possession and use of data are not flat or fair. The inequality of data ownership has generated significant social polarization. Older theories all assumed that technological innovation would bring more decentralized competition; however, the development of emerging technology firms around the world has accelerated monopoly. [49]. The Internet economy has shown a trend toward “solidification” on the economic level. After the global Internet was monopolized by several Big Tech firms, no force capable of disrupting this “first-mover” has yet emerged. The exponentially increasing mobile Internet is no exception. China’s “unicorn” enterprise group, which is driven by “hard technology,” has the characteristics of a short growth cycle, strong innovation capacity, and explosive concentration. However, the characteristics of technology firms’ upstream monopolies and the formation of strong technological hegemony are becoming increasingly clear [50].

The rise of emerging technology firms displays both similarities and differences with the capital power of the past few centuries. Similar to the status of capital of the enterprises during the industrial age, technology itself has become a new vehicle of power. Capital can control the means of production and labor, and disruptive technology can control almost everything, including the human spiritual world. No individual or organization can escape. In this regard, the superimposed development of cognitive science and artificial intelligence is providing additional proof [51]. Data and cross-border data flows provide an illustrative example of this trend. As enterprises and countries have observed, Big Tech firms collect online user data through digital platforms and use it to obtain huge revenues. The data monopoly status obtained from data, which limits the government’s legislation and law enforcement’s ability to force governments to strengthen control over the free flow of data across borders [52]. The massive amount of data controlled by emerging technology firms serves a wide range of social functions and influences politics. In the absence of effective supervision, citizens’ private information and public data may suffer large-scale leaks or be traded on the market [53].

Big Tech firms are able to use their technological advantages to engage in political competition with governments in cyberspace, constantly seizing control of the Internet and digital world from national governments, as an increasing number of national governments strengthen their antitrust measures against Big Tech firms at home and abroad, the power of sovereign states in cyberspace continues to rise. The cyber powers that control core network information technology, as well as dominate the international digital order, rules, and network technology standards, will continue to play an important role in formulating national behavioral norms in global cyberspace and in determining the shape of the global network [54]. For example, after Joe Biden became the President of the United States, he highlighted the “ten deadly sins” of Big Tech firms and platforms, including the arbitrary collection of a large amount of user data, the immoral use of data for experiments and profit, the enticement of users through extreme and polarized content, the tolerance of criminal acts (e.g., illegal online stalking and sexual content), the abuse of a dominant market position to exclude competitors, the disruption of market competition and development, the stifling of technological and commercial innovation in the field of technology, and more [55].

The expansion of power by Big Tech firms has its roots in the fact that while they are taking on some public service functions, they are also eroding the public governance leading role that originally belonged to state power. The further expansion of private capital power breaks the balance of rights and obligations that are originally maintained by the state legal order, and also directly challenges the power distribution pattern between the public and private sectors that has been formed in the industrial and information economy eras. Meanwhile, the monopolistic operations of Big Tech firms often conflict with the long-standing principle of free competition championed by governments in Europe and America, resulting in heavy fines. In China, to protect competitiveness, the government has taken strong measures for a long time to require Big Tech firms to comply with Chinese laws and regulations. These regulations will limit the pre-competitive business practices of tech giants. For example, in February 2021, the State Administration for Market Regulation in China released a broadly scoped “Anti-Monopoly Guidelines in the Field of Platform Economy,” which set specific anti-monopoly requirements for tech giants [56]. In addition, the People’s Bank of China issued new regulations for non-bank payment service providers in January 2021, soliciting specific competition requirements [57]. Cyberspace Administration of China published draft rules over AIGC (AI-Generated Content, ChatGPT-like services) for public comment [58], which, as it stands now, basically requires a license, and asks for a security evaluation from Cyberspace Administration of China (CAC) to provide AIGC to the public. Similar situations have occurred in other countries. In recent years, many countries and regions have been regulating monopoly problems in the Big Tech firms by strengthening relevant anti-monopoly legislation. In October 2020, the US Department of Justice and 11 states announced an antitrust lawsuit against Google, accusing the company of using anti-competitive behavior to maintain its monopoly position in the search engine and online advertising fields [59]. In December 2020, the European Commission submitted two drafts - the Digital Services Act and the Digital Markets Act - aimed at strengthening the regulation of social media, e-commerce platforms, and other online platforms operating within the European Union, to defend the EU’s digital sovereignty [60]. Big Tech firms and other governments often reach a certain level of compromise, but this compromise is not always possible in China. Because of its refusal to comply with local laws and regulations, Google, Facebook, Twitter, and other US-dominant Big Tech firms are unable to conduct normal business on the Internet in China. Mobile device giant Apple placed its largest data center in Asia in China’s Guizhou province [61], for government supervision and management, and to eliminate national security threats to China [39].

In terms of the effectiveness of regulating international Big Tech firms, the market share of top technology firms in the European and American countries in China is almost zero, so there is no monopoly operation, information leakage, and national security threat. However, the uniqueness of China is that it has bred several technology giants such as Alibaba, Tencent, Baidu, ByteDance, and Meituan. These companies have limited internationalization, but the risks of monopoly and information leakage brought by them within China should not be ignored. This has happened quite publicly in China with new law policies directed at digital monopolies undercutting fair competition and governance. This was observed in guard against platform monopolies and unregulated expansion of capital, and crack down on monopolistic practices and unfair competition in accordance with the law [46, 62].

In traditional global governance mechanisms, national governments are the main actors, and non-state actors are rarely incorporated into the process of creating the mechanism. However, in the field of cyberspace, Big Tech firms, as non-state actors, have a greater influence than they do in the physical world. Due to its command of vital data resources and needed new “public infrastructure,” Big Tech has become indispensable for the reconstruction of economic and social order. These platform enterprises led by private investors fully leverage global mobility and technology innovation. Their influence is extending from the economic to the social and political realms, transforming them into an all-encompassing “superpower.” [63] A crucial symptom of the social transformation in the digital age, Big Tech is comparable to sovereign states in the evolution of global practice. The rise of Big Tech has expedited the trend of power shifting from the state to the market in state-market societies, which is a process that has been occurring for some time [64]. In the growing digital environment, the state’s digital transformation as a traditional power carrier has fallen significantly behind the new forms of capital organization represented by Big Tech. Obviously, so long as cyberspace cannot be separated from physical space or cannot totally dominate it, it will be challenging for Big Tech to fundamentally supplant the modern state.

Big Tech Firms and Nation-state: A Symbiotic Relationship in Progress

As data gradually becomes a new factor in the production of power, Big Tech firms that are more capable of obtaining massive amounts of data and using advanced algorithms to process data will earn more benefits from technological empowerment. In the context of very complex and large investments in data and its derivatives, a massive amount of data collection will be required to create scenario applications. Only governments and Big Tech firms with ability to monopolize resources and data. The monopolization of resources and information by multinational technology firms is even more prominent because the production of big data in contemporary society mainly derives from various application platforms, and people’s work or lives, study or entertainment, and even consumption habits are collected via various application platforms and delivered to the cloud. More importantly, the developers and operators of these application platforms belong to a small number of Big Tech firms [4, 65]. In addition, algorithm research and development have high thresholds, and therefore, designing advanced algorithms requires large capital investments, professional research teams, and a solid early-stage technical foundation. Ordinary SMEs do not have such capacities. Although the influences of current technology firms are mainly concentrated in the economic and social sectors, in a “world ruled by data,” the role of data will eventually spread to national governance. This is in line with the trajectory of the diffusion of iconic technologies during previous technological revolutions. As the scope and degree to which it embeds itself in processes of national governance continue to expand and deepen, countries’ reliance on the data and algorithms held by Big Tech firms will continue to increase. Due to the unique advantages possessed by Big Tech firms in relation to data and algorithms, countries often need them to provide technical assistance when solving social problems, and Big Tech firms have thus become an important force that governments must rely on. In theory, governments are still the largest public organizations; however, the technical routes and tools to achieve public tasks will increasingly require extensive collaboration with Big Tech firms.

In addition to posing challenges to nation-state in numerous domains, Big Tech has had a positive impact with the use of data. In preventing and controlling the COVID-19 pandemic, for instance, the Big Tech firms has played a crucial role in the dissemination of information on pandemic prevention, the provision of information channels for assistance, the distribution of pandemic prevention and living materials, and the facilitation of remote work and education. Facebook has launched a “COVID-19 Info Center” service, which is located at the top of Facebook users’ news feeds. It not only helps users to understand the relevant information about the pandemic at the correct time, but also constantly reminds users to “maintain social distance” [66]. To enable users to timely understand the pandemic situation, Apple has also developed new applications. With these applications, users can timely understand important information, such as pandemic prevention precautions, infection symptom standards, and outdoor travel advice. To facilitate user operations, Apple has also added related functions to its voice assistant Siri. Users can directly ask Siri for information on pandemic dynamics, infection symptoms, and other aspects through voice commands [67]. Google has begun to promote its online meeting system, providing advanced features of Google Meet for free to all G-Suite and G-Suite for Education customers. These high-end add-ons include the ability to hold large meetings with 250 people, as well as the ability to record and save meetings [68].

In addition, Big Tech firms often no longer limit themselves to merely consulting on political matters. They are increasingly assuming the role of co-rule-makers, actively exerting influence on the economic and social implementation of regulations, and even directly intervening in the formulation and design of government regulations and policy tools. Some cases demonstrate the “reverse coercion mechanism” launched by Big Tech firms. For example, Didi Taxi collaborated with the Shanghai Municipal Transportation Commission and the representatives of four major taxi companies to jointly build the Shanghai Taxi Information Service Platform [69], which seems to be different from the past government-led, enterprise-affiliated situation. Big Tech has a “social enterprise” component and can become the collaborative builders of new urban infrastructure and assume social governance responsibilities, particularly in crisis management.

However, there is another reason. Some academics argue that data extraction is not comparable to oil refining because it is not a natural process, but rather a reflection of social tendencies [19]. In actuality, Big Tech firms have formed a “data relationship” that is as natural as labor-management relations. It can extract data from the daily activities of humans without obstruction and can benefit from it. In this setting, a new discourse regarding the definition and resolution of societal problems is replacing older discourses. Beyond surveillance capitalism and data colonialism, a kind of social administration is slowly taking shape [70]. The emergence of Big Tech firms are not only a commercial activity or a new form of economic control through multilateral markets. As a technological means, Big Tech firms have generated a new “society” for capital, where every detail inside can be continuously tracked, accessed, classified, and calculated as value due to the existence of data. The general sense of daily life is still outside the scope of general economic relations, but through the key means of digital platforms, daily life will be completely incorporated into the marketized network. Adam Arvidsson has analyzed well the technical method of extracting value from platform data as a financialization form [71], but the more fundamental approach is the appropriation of society itself. However, the interests of Big Tech and sovereign states do not always coincide, and the strategic planning of firms is oriented to their own will to develop. Giant companies strive to form what is from their perspective a favorable economic ecosystem in the host country, and through their strong economic power, they control important economic sectors of the host country and monopolize certain products and markets. To a large extent, this affects economic activities and even influences policy adjustment options in the host country [11, 72].

Big Tech firms not only endogenously generate some technological powers by virtue of their unique technological advantages, but they also obtain entrusted or conferred power from the state through auxiliary governance. The existence of endogenous and external power transforms Big Tech firms into entities with broad influence, not unlike a state. This will have an impact on the traditional single-center governance power structure of a state. With the further entrenchment of big data technology in governance structures, governments will come to rely increasingly on these giant companies. When the government uses intelligent platforms developed by enterprises to handle government affairs, a large amount of data that is generated in the background will also be captured by enterprises, which will further aggravate the asymmetries in power structures. Therefore, it can be said that on the surface, governments are still exercisers of power; however, in truth, their position of power is being seriously eroded by Big Tech firms. However, although the rise of Big Tech firms may challenge or weaken a state’s power center, it does not mean that the traditional power center of a state will no longer exist. The change of a government’s power center is not a question with a single answer. Rather, it is a multiple-choice question. In the process of data production, circulation, and use, individuals, enterprises, society, the state, and other relevant subjects have different interests regarding data and present the characteristics of complex symbiosis, interdependence, and dynamic changes. That is, Big Tech firms can become new powers. Although the traditional position of the state as the center of power has been impacted, the state, has not completely collapsed or disappeared.

Conclusion

Big Tech firms rely on their technological advantages regarding the Internet to challenge government power in physical reality and in cyberspace. Within the traditional order of global governance, national governments are actors, and non-state actors are rarely included in the mechanism creation process. However, in the field of cyberspace, non-state actors, including multinational technology firms, have greater influence. Emerging technologies have empowered technology firms in the real world and in cyberspace, reshaping the power relationship between business and government in both spaces. In Politics as a Vocation, Weber pointed out that violence is not a regular or only means used by states but is a unique means of states [73]. The state is considered the only source of legitimate use of violence. However, data violence has challenged this thesis from multiple dimensions. Regarding the subject of data violence, the power of Big Tech firms is significant. The use of digital technology for political, economic, and social control, with the birth of the term “data colonialism” is indicative of the present state of affairs [11, 74, 75].

Although related infrastructure is still fixed in the physical reality, the wave of digital globalization provides conditions for the cross-border flow of massive data and information. At the same time, the flow of information in the virtual world is almost unrestricted by borders. Furthermore, as digital technology fundamentally changes the geographical boundaries of war [76], the boundaries of international and domestic security norms are becoming increasingly blurred [77]. Despite the concept of sovereignty in the modern sense being formed, Hans Morgenthau said, “sovereignty is not the actual independence in politics, military, economy or technology,” [78] because a country usually maintains intricate associations with other countries and regions in terms of data elements, the duality of emerging technology, which can both support and enhance traditional geopolitical power, but also challenge and reshape the traditional roles of sovereign states.

From the perspective of the political and economic relationship structure, Big Tech firms and sovereign states are not a simple zero-sum relationship, or two entities that are torn apart. Big Tech firms were once an important part of the innovation competition between sovereign states before becoming giants, and in today’s international political system, the growing technology giants have formed a symbiotic relationship with powerful sovereign states [79]. National governments’ policies and financial support for domestic tech giants are beneficial for enhancing their competitiveness, ensuring the autonomy of the country’s digital infrastructure, and better addressing the monopolistic behavior of foreign tech firms. Moreover, these firms can earn huge revenues by selling internet platform services, cloud computing services, etc., to the government. National governments can leverage the expertise of domestic tech giants to enhance their ability to govern the network and maintain network security, thereby increasing their influence in the global cyberspace. Foreign tech firms are often “weaponized” by their countries of origin, and engage in geopolitical games in both the online and offline spaces with other nations. For Big Tech firms to exert geopolitical influence in the global arena, they need the endorsement of state power. This is a projection of the power of powerful sovereign states in the global order system. If Apple and Google were not American companies, they may have already suffered from the high fines imposed by the EU, and if Huawei and ByteDance were not Chinese companies, they may have already been forced to give up under the harsh sanctions of the US government. On the other hand, in the digital geopolitical competition, Big Tech firms are also key forces in supporting the expansion of the power of powerful sovereign states. The BIG FIVE entrenched in Silicon Valley is an important support for the US to maintain its hegemony in the digital age. If Silicon Valley suddenly declined and its successors were weak, the US would undoubtedly suffer a blow to its power and status in the world today.

The relationship between Big Tech firms and sovereign states is complex. They influence and compete with each other; however, they also have achieved a certain degree of cooperation and have created win-win scenarios in certain areas. In the future global political and economic landscape, governments and Big Tech firms need to develop more coordinated strategies to deal with increasingly complex challenges. This means that all parties must respect each other and leverage the potential of Big Tech firms in the realms of innovation, economic growth, and global governance while also protecting national and public interests. In order to achieve this goal, governments must strengthen their oversight of technology firms to ensure that they make positive contributions to the sustainable development of global society and comply with laws and regulations. In addition, Big Tech firms must actively fulfill their social responsibilities and contribute to solving global problems through cooperation with governments and international organizations. As a part of this process, research on global politics and economics should focus on the interactions and influences between Big Tech firms and sovereign states in order to better understand their status and role in global governance. In this way, we will be better able to meet the challenges of the future and develop effective policies to deal with the expanding influence of Big Tech firms on global politics, the economy, and society. As emerging technologies continue to accelerate the political integration of cyberspace and real space, the power struggles between Big Tech firms and national governments will determine the future development of cyberspace and even the real world.

Hongfei Gu

is an Assistant Professor at the School of International Relations at Xi?an International Studies University. Specializing in international political economy and China-Europe relations, he has published a number of articles in peer-reviewed journals and edited volumes on those topics.

Funding

The National Social Science Fund of China (Grant Number: 18AYY006).

Declarations

Conflicting Interest

The author declares that there is no conflict of interest.