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The Federal Trade Commission announces sanctions for Facebook in 2019 for mishandling user privacy. Governments must learn how to regulate digital industries without stifling innovation.
Current regulatory institutions are rooted in the 20th century and lack broad enough oversight to deal with the digital economy.
In seeking to remedy this, governments should look at four different areas.
Governments have been grappling with the challenge of how to regulate new and rapidly expanding industries while safeguarding against potential risks ever since technological change first accompanied the Industrial Revolution. In the 18th and 19th centuries, governments had to support the development of entirely new industries while addressing problems in areas such as child labour, sanitation and air quality.
These challenges needed to be addressed as a result of the dramatic economic and social effects of these industries. There were very clear benefits to the government in supporting their development, but also huge potential harms in allowing the market to dictate terms.
Today, governments face a similar tightrope act in regulating the global digital economy being forged by the Fourth Industrial Revolution. The public sector must enable firms to develop innovative new digital products and services, while building in regulatory safety measures against possible […]