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Laws geared to big tech could harm decentralized platforms

Decentralized platforms such as Mastodon function as alternatives to established companies such as Twitter. But as policymakers crack down on big tech, it could harm new platforms.

While not as well known as companies such as Meta and Twitter, alternative social networking platforms such as Mastodon are cropping up -- and it's a type of platform that could be negatively affected by new rules and regulations policymakers want for big tech platforms.

Mastodon is what's known as a decentralized platform, meaning it's controlled by many individual servers rather than a single authority, and it's considered a nonprofit organization. Users creating Mastodon accounts choose a topic to identify with, such as climate justice, before creating an account on that server, like setting up an email. That user account can then communicate with other server accounts, even if they're based on different topics. Mastodon has roughly 1.8 million active monthly users, compared with Twitter's 436 million.

Companies such as Mastodon, founded in 2016, are launching as alternate options to large tech platforms, which have gained notoriety in the last several years for spreading misinformation, collecting and using personal data for targeted advertising, and harming teens' mental health. Policymakers across the globe are adopting and considering new rules and regulations to stop some of these harms. While the European Union has adopted laws such as the Digital Services Act (DSA) to regulate online platforms, similar bills have stalled in the U.S.

"We've seen the popularity with decentralized internet services come in and out of the news based off of control or decisions single platforms have made or not made," said Kir Nuthi, a senior policy analyst at the Center for Data Innovation. "It becomes a governance question, and that's why we keep seeing decentralized internet services trend." Nuthi spoke during an online panel discussion hosted by the Center for Data Innovation called "Can Regulators Handle the Mastodons of the World?"

The concept of a decentralized internet, known as Web3 -- essentially, moving control out of the hands of centralized tech platforms -- has yet to fully form. But as regulators focus on targeting existing platforms with new rules and regulations such as the DSA, experts believe such proposals need to include considerations for this next evolution of internet technology.

Crafting flexible regulations to consider technology changes

Advocates of decentralized internet services believe it will give users more control and choice over what they see online, as well as how much information they're giving out, Nuthi said.

Since the rise of decentralized platforms has come about slowly, most current legislative proposals don't specifically target them, but could inadvertently affect their growth. The DSA, for example, requires that online platforms have a point of contact, which could be difficult for decentralized platforms whose responsibility is without a single authority.

That's why policymakers should carefully consider regulations for online platforms instead of targeting new internet policies at existing tech giants. Indeed, stipulations in the DSA might be too difficult for voluntary, nonprofit platforms such as Mastodon to comply with.

"One of the things that automatically becomes very apparent is laws like the DSA do not provide any sort of clarity on questions of decentralized social media," said panelist Konstantinos Komaitis, senior researcher at Brussels-based think tank The Lisbon Council. "When you're talking about Mastodon, which is essentially run by volunteers and is based on users, then suddenly you realize that this is not effective, it's not supportive, and most probably it's going to create an environment where it would be very difficult for Mastodon to exist within Europe."

One way to consider decentralized platforms in regulations is to create separate provisions that are more flexible for the emerging technology rather than restrictive rules, Komaitis said.

Prescriptive regulations can be problematic for something like decentralized platforms, said panelist Neil Chilson, a senior research fellow for technology and innovation at philanthropy Stand Together Trust.

"This is the problem when you have a complicated set of laws or restrictions that are designed for the current world or a current set of actors, but then you try to wedge other ones in there," he said. "It tends to be distortive of the other models and possibly even stops them from coming about at all." That can benefit existing large tech companies, he added.

Chilson offered common law as an approach to regulating decentralized platforms, citing Section 230 as an example. Section 230 is a law with broad language protecting online platforms from liability for third-party content -- a legal precedent that the Supreme Court is currently debating.

However, that type of approach to regulation means the courts can address harms from decentralized platforms on a case-by-case basis rather than through over-prescriptive rules, he said.

"Thinking of models like that, what kind of legislation could we create that creates a space for the emergence of common law principles," Chilson said.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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