The view of 'the market' as a solution to social issues and a path to prosperity is facing growing scepticism. The convergence of existential threats, such as those linked with climate and technological change, with the aspiration of economic resilience in a context of global competition have prompted a re-centring of the state across the Global North. Among other things, this has taken the form of a return of industrial policy and a push towards unilateralism in international economic relations, as evidenced by the most recent developments in US trade policy. At the same time, these developments fuel the discourse about a ‘transition away from neoliberalism’ and the emergence of a ‘geoeconomic’ or ‘post-neoliberal’ order.
Alon Jasper, Andrea Palumbo, Carolina Paulesu, Charlotte Ducuing, Elif Beyza Akkanat-Öztürk, Enrique Santamaría Echeverría, Eva Meyermans Spelmans, Eylül Erva Akın, Frederik Zuiderveen Borgesius, Gabriella Gimigliano, Giselle Villegas Bourgoing, Jie Ouyang, Leander Stähler, Massimo D’Auria, Raphael Gellert, Victo Silva, Vinicius Muraro, Vito Bevivino
Amidst these conceptual developments and practical realities, legal scholars from different backgrounds and specialisations, gathered in Groningen for the third annual conference of the Public-Private Challenge, to focus on the role of the law in structuring two key transitions that play a defining role in this emerging socio-economic organisation: the digital and the green transition. We concentrated, specifically, on how law revises the balance between public and private actors. In other words, how does the law restructure claims and burdens, rights and entitlements between private and public actors in these emerging transitions? Enrique Santamaria Echevarria reflects on the conference and shares the biggest takeaways.
"At the event, the participants addressed, each within their own expertise, the following questions:
- How are new legislative instruments addressing the diverse challenges posed by digitalisation, climate change and environmental degradation in the context of the traditional public-private divide (power, interests, actors, law)?
- What role does the law play in shaping a ‘post-neoliberal’ order? Does it reconcile the multiple contradictions arising from the (relatively) opposed normative foundations of the green and digital transitions (i.e. environmental protection and sustainability and economic growth and competitiveness respectively)? How does the public-private divide look in this shifting legal and political landscape?
- What is the role of private law in the digital and green transitions? When it comes to the necessary changes towards sustainable societies, which kind of role is left to and what challenges arise in the regulation of private relationships?
While the aim was not to provide a definitive answer to these questions, we did identify two recurring themes in the conversation, cutting across different domains and disciplines:
- The delegation of the advancement of public interests to large private actors, such as banks and platforms, and the concomitant deferral of legal and moral responsibility for sustainable and informed actions to individuals (hereafter referred to as Public Interests and Private Actors).
- A revival of the notion of infrastructure as the lens for the analysis of the workings of the law in relation to the digital transition, and as a manifestation of the materiality of digitalisation (hereafter referred to as The Infrastructural Revival).
Public Interests and Private Actors
The EU legislator is increasingly entrusting large private actors such as online platforms and banks, to play a leading role to protect and advance public values. Examples of public values include the preservation of fundamental rights online and the green transition. The EU legislator notably leverages the regulatory mechanism of broadly-phrased systemic risks management requirements to that effect. Notably, the law cements a leading role of large private actors to advance public values, to the point of turning them into quasi-regulators. Since markets as coordination mechanisms remain unchanged, advancing public values through large private actors still relies on profit-driven logic. This phenomenon disrupts the public-private divide underpinning liberal democracy and creates serious frictions with the fundamental principles of democracy and the rule of law. In the context of the Digital Service Act (DSA) and the Artificial Intelligence Act (AI Act), Andrea Palumbo and Charlotte Ducuing identify the systemic risks management requirements within the DSA and the Artificial Intelligence Act as a new milestone within risk-based regulation. Subject to a complex public-private nexus involving also the European Commission, the DSA and AI Act systemic risks management requirements go well beyond the risk-based approach of the GDPR for example, by entrusting private actors - such as very large online platforms and search engines - with regulatory powers. Five elements come across as decisive: The lack of legislative regulation of the source of risk; The substantiation of broadly-phrased public values by the private actors; The balancing between the public values by the private actors and the considerable room of maneuver that they enjoy by doing so; And the impact of such activities on third parties (such as online platform users) whereby platforms act as regulatory intermediaries. Palumbo and Ducuing additionally point to the frictions that these elements create with the rule of law that, in a self-reinforcing loop, erode its constitutive principles: transparency, accountability, access to justice, prevention of arbitrariness and separation of powers. They view the DSA and AI Act as the peak of a gradual erosion of the rule of law, driven by problematic regulatory mechanisms in EU secondary legislation and they therein highlight the key role played by the public-private nexus established by the law.
Specifically for the case of the DSA, Eylül Erva Akın & Elif Beyza Akkanat-Öztürk notably warn against the increasing delegation of quasi-regulatory powers to online platforms without sufficient democratic legitimacy or external oversight. Such is particularly the case with the systemic risks management requirements of Articles 34 and 35 DSA. The seriousness of the issues is reinforced by the systemic imbalance in social power and information asymmetry, to the risk of endangering fundamental rights including freedom of expression. Akın & Akkanat-Öztürk highlight the shortcomings of the DSA when it comes to environmental sustainability and support the recommendation that environmental concerns shall qualify as ‘systemic risks’ that online platforms shall manage under the DSA. While recognizing the need for further methodologies for doing so, they see an added-value in embracing a broader perspective for platform law that, beyond rights and competition, would also contribute to advancing the EU green agenda.
Arguably, legislation for the green transition follows a similar strategy of allocating in large companies the duty to identify and manage risks associated to their activities. The risk management obligations under the Corporate Sustainability Due Diligence Directive (CSDDD), now at risk of being further watered down, are a clear example of this. In this context, Eva Meyermans Spelmans situates the CSDDD in the economic geography of the apparel industry’s GVC. She shows how, while the introduction of mandatory human rights due diligence signals a shift towards a more regulated apparel industry where businesses have to take their responsibility for protecting society and the environment in GVCs, these green legal obligations should be designed with the industry’s power inequalities in mind to prevent hidden costs for the less powerful, such as workers or the environment. Within GVCs suppliers already laid off workers to recover the costs of expensive environmental certification, which shows how environmental obligations can come with adverse social consequences.
In the fields of competition law, banking and financial law and climate change litigation, Vito Bevivino, Massimo D’Auria and Gabriella Gimigliano observe a wealth of various – and continued – legislation geared towards the dual roles of addressing environmental sustainability and increasing the ‘competitiveness’ of the EU on the global plane. Also in this context, under the rationale of alleviating the regulatory burden on private companies, EU law gives private companies a key role in leading the ecological transition as part of their internal management processes, with clear manifestation in risk-based approaches in banking law. Bevivino, Dauria, and Gimigliano invite to reevaluate the conventional roles attributed to the instruments of private law, moving from the features of EU private law to a view of giving priority to their regulatory capacity – i.e. their capacity to advance public values. They identify a shifting role of the judicial authority, increasingly becoming a political driver for change through citizens’ democratic participation while at the same time being requested to reformulate the institutions of private law toward genuine environmental and inter-generational justice directions.
Alongside this shift of regulatory power to private entities, the green and digital transitions also delegate moral and legal responsibility to individuals, expecting them to act in informed and sustainable ways. In the digital realm, consent functions as the performative representation of autonomy and individual control. In the green transition, such delegation is palpable in the EU’s new consumer agenda. Both Carolina Paulesu and Jie Ouyang demonstrated how, by heavily relying on information duties, the Agenda promotes sustainable consumption through empowering individual consumers to make greener choices, placing therefore the responsibility on individuals.
The Infrastructural Revival
Europe’s reliance on external actors for its digital transformation has exposed geopolitical weaknesses and sparked a revival of debates about sovereignty and infrastructureRecent initiatives like the Euro-Stack, have called for more technologically independent Europe “across all layers of its critical infrastructure”. However, the meaning of the concept of infrastructure remains somewhat vague, reminiscent of the classical public utilities doctrine, and sometimes used to refer the material and immaterial layers supporting digitalisation.
In this context, questions examining what it means to consider digital infrastructure from the perspective of democracy, the complementary interplay of public top-down and private bottom-up legal frameworks (e.g. as present in the semiconductor industry), as well as the narratives concerning digital public infrastructure connected with ideas of digital sovereignty, the empowerment of citizens and government openness, come to the fore.
Charlotte Ducuing, Alon Jasper, and Leander Stähler trace emerging changes in EU law-making (‘regulatory policy’), and connect these with analysis concerning a renewed role of infrastructure (an ‘infrastructural turn’). Specifically, they argue that what is emerging as a result of EU regulations is a new “law of infrastructure,” which is reflected in the legislation in several keyways. This includes the phenomenon of Big Tech as a form of sustainable bigness, the recognition of clean energy and clean technology as a prerequisite for economic development, and the role of critical infrastructures for the maintenance of vital societal functions.
Importantly, this emerging law of infrastructure has a critical difference with other, established forms thereof – it blurs the divide between public and private. Like other laws of infrastructure, these regulations separate infrastructure from other economic activities and recognise the reliance of diverse social and economic activities on such infrastructures. However, the law of infrastructure on public-oriented legitimation, rather than drawing upon a more comprehensive public interest framework for infrastructure. Drawing upon public utilities literature, Ducuing, Jasper and Stähler argue in favour of a ‘democratic law of infrastructure’, which should reflect the ability for the public to develop democratically-organised power. Their contribution thus outlines a research agenda for how democracy can be investigated as a lodestar for the law of infrastructure, and ultimately how this law can thereby secure vital public interests.
Victo Silva, Vinicius Muraro, Raphael Gellert, Frederik Zuiderveen Borgesius take a critical stance on the use of the concept of digital public infrastructure (DPI) in policy discourses. Contrary to calls for digital sovereignty, some DPIs may exploit the openness of states' public infrastructure to introduce market competition into the state. While the roots of the DPI can be found in the concept of open government dating back from the 2000s, proponents of the concept emphasise the benefits of these approaches (ie more efficient public services by opening them up to private competition). Such an optimistic outlook on DPI is also displayed in the empirical analysis conducted on 695 policy documents spanning from 2015-2024, and mostly stemming from think tanks but also increasingly embraced by governments and IGOs. The analysis also showed a lack of attention to the most problematic aspect relating to DPI, such as privatisation of public infrastructure, data governance issues broadly speaking, lack of adequate safeguards including in relevant law making (e.g. the Data Governance Act and the GDPR).
Finally, the environmental impact of the material infrastructure supporting moder technologies remains a cause of concern. Clear examples are the microchips and semiconductor industries, powering sector like healthcare, logistics, AI, and quantum computing. The semiconductor sector emitted 167 megatons of CO₂ in 2022—42% from upstream supply chain emissions. Although research on green supply chains is expanding, sustainable procurement is still underexplored and often examined from only one disciplinary angle
Giselle Villegas Bourgoing, adopting a multidisciplinary approach, focuses on the intersection of legal frameworks and procurement practices in the EU, particularly under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). She investigated how top-down regulations compare to bottom-up industry standards in promoting sustainable procurement in the semiconductor industry, and concluded that while both regulatory and market forces influence sustainable procurement, top-down frameworks are the primary drivers of compliance. Market demands, however, play a complementary role in encouraging sustainable practices. Based on these findings, Villegas Bourgoing advocates then for adaptive public-private collaboration, offering insights for policymakers and industry leaders on aligning regulation with innovation to strengthen sustainable supply chains in the digital economy.
Conclusions
Appearing from the conference discussions and presentations is the lack of an integrated approach to the problems arising from environmental degradation and digital transformation. Beyond the Commission’s declaration of using the “Twin Transition”[19] as the skeleton supporting competitiveness, and scholarly calls to use technology for “environmental purposes”, law and policy are generally oblivious of the multiple looping negative dynamics emerging from these transitions and related regulation. While environmental concerns are notoriously absent in digital regulation, the different connections between law and unsustainable practices are becoming clear.
Thus, taking an integrated approach means abandoning legal silos and instead making connections between different legal instruments and legal fields. As a starting point one should take the different aspects of sustainability into account to make sure the green transition will be just. However, the structural change needed for the planet and society requires a broader mindset change that law on its own cannot achieve. This transformation will require collective, political, and cultural change.
This transformation must acknowledge structural injustices and challenge the capitalist foundations of current law and policy, but it can take different forms: from new imaginaries of prosperity and consumption that foregrounds democracy, solidarity and respect for planetary boundaries, to the integration of feminisms and other ways of conceptualising intersectional oppression in both our understanding of the law and our relation with the more-than-human."
