Private Power Play: The Impact of Corporate Technological Dominance in Geopolitical Arenas
By Erika Vodvárková, Elton Högklint, and Fernando Gómez-Acebo
In September 2022, Elon Musk deactivated Starlink coverage for Ukraine in the Crimean Peninsula preceding a planned Ukrainian attack on Russian Navy vessels in Sevastopol. This decision was made after Musk had communicated with senior Russian officials, who warned him that allowing Ukraine to attack the port would incur a nuclear response from Russia. This elimination of coverage was crippling for the Ukrainian attack, as the Ukrainian technological infrastructure is wholly reliant on Starlink’s rapidly deployable and secure connections. This event raised questions within the US military concerning how dependent foreign policy objectives were on the cooperation of private actors.
Starlink is far from the only private technology service that has dominance, and sometimes even a monopoly, on an important public service. Alphabet has a virtual monopoly in the search engine market, to the point where the verb for looking something up using the internet has become synonymous with the name of their service, Google. Delisting web pages from Google dramatically reduces its accessibility to the general public, and limits the ability of most citizens to access the information therein. Meta dominates the social media sphere through its ownership of Instagram, Facebook, Whatsapp, and Messenger. These platforms, particularly Facebook, have become hotspots for the spread of conspiracy theories and false information and played a significant role in the lead up to the January 6th insurrection in the US. Furthermore, these platforms have tremendous power over individuals’ and organisations’ reach in the public sphere, as being removed from Meta’s platforms inhibits exposure to huge swathes of the population.
Access to these services is entirely determined by the private firms and their own terms of service. While some anti-discrimination laws apply, many freedoms or rights, such as the First Amendment of the US Constitution, do not apply to these technological spaces as they are private entities. Before delving into some of the potential problems this causes, it is important to contextualise this state of affairs.
How Does Private Sector Dominance Arise?
To highlight how this scenario can take place in other spheres, we describe this process in a generalised way. A private company develops x technology that fills an unexplored niche. In Starlink’s case, its network is able to provide network service anywhere on the planet using portable terminals and non-geostationary satellites. The innovative and state-of-the-art quality of technology x grants strategic, economic, or political advantages to stakeholders that have access to it (a connection that is difficult to trace and jam with no need for infrastructure). Stakeholders are thus pushed to adopt technology x so as to not be at a disadvantage with respect to other parties (Ukraine has limited ability to jam Russia’s connection, so they depend on Starlink to fight on equal ground).
Of course, technology x can only be offered by the private company as they are at the forefront of the field. The use of the technology is not regulated as it concerns previously unexplored legal spaces; for example, Starlink’s relocation of satellites does not need governmental approval as long as they comply with the ITU’s stipulations of satellite allocation. At the same time, stakeholders that need the technology the most are usually vulnerable and cannot develop alternatives. While military organisations such as the Pentagon have comparable technology, Ukraine cannot afford to develop its own.
These factors create a situation in which a single powerful company, which has a minimal stake in geopolitical issues (Starlink and Musk’s companies at large are not terribly affected by the war in Ukraine) and little oversight, has immense leverage over a stakeholder that has no alternative. This leverage can be used in an extortionate manner.
This power imbalance is likely to worsen with time. The stakeholder’s dependence on technology x can also result in its development of other infrastructure around access to that technology, thus becoming increasingly reliant as time goes on; in this case, Ukraine’s new naval drones are operated through Starlink’s terminals. Therefore, when Musk shut down Starlink, the drones were rendered useless until the system was brought back online. This creates a feedback loop, allowing private companies to hold extremely favourable positions and smother the competition while increasing their market dominance.
A Persistent Problem
Following this dynamic, it’s easy to draw similarities with many other issues complicating geopolitics today. For example, AI is an apt comparison case. Almost all state-of-the-art AI technology is privately owned. Public entities don’t have access to the datasets and computing power required to develop them, but AI is already shaping up to be the backbone of most technological developments in the coming decade. Beyond commercial chatbots, AI is already being used for military purposes in tracking, cyber defence, and drone engineering. Similar to Starlink’s case, regulation on AI is next to non-existent, and most changes to the workings of popular language models (such as ChatGPT’s various filters implemented in 2023) are only carried out by parent companies for public relations. As AI’s inner processes are notoriously difficult to interpret from the outside, companies have free reign to bias the decision-making of their models in any way they wish.
This rapid growth in the geopolitical influence of the private sector marks a significant paradigm shift in global power dynamics. For centuries, private individuals, including mercenaries and weapons dealers, have played roles as power brokers and violence specialists. However, today we find ourselves at a unique historical moment where these actors can engage in conflict-altering activities while remaining fully within the framework of a democratic state apparatus. For as long as this state of affairs persists, the influence of private entities on geopolitics presents myriad issues to the basic principles as well as the effective functioning of democratic states, both nationally and internationally.
Private entities bear little legal obligation towards the nations and populations impacted by their actions. Domestically, private persons and entities are not accountable to any democratic constituency and are immune to the pressures and scrutiny of elections. Internationally, they operate without the constraints of intergovernmental treaties and without the necessity to safeguard their diplomatic reputation or exercise soft power. Furthermore, owing to their lack of ‘direct’ political power and the corresponding responsibilities, private persons will likely be unresponsive to the traditional diplomatic and negotiating strategies typically conducted between the representatives of nation-states. In the absence of targeted legislation curtailing the excursion of political influence by private entities abroad, there exists no inherent democratic safeguard that can be levied to compel their accountability to the public.
Given the separation between highly influential private individuals from democratic accountability structures, without legal regulatory barriers and responsibilities to an electorate, the involvement of private individuals in international affairs is unpredictable and restrained only by the extent of their power. As the well-established rules and principles of the geopolitical arena begin to erode, the international sphere becomes necessarily more unstable.
Additionally, with electoral or oppositional pressure, private individuals often solely follow their private interests either in the market or in geopolitical conflicts. These interests might be not only perfunctory and volatile but likely also incongruent with the positions and ambitions of the ruling government. Such a divergence in interests between the private sector and the state might severely undermine the legitimacy of the democratic government both nationally and internationally.
Finally, private individuals and corporations are often more vulnerable to external interference than governmental bodies. Governmental bodies often have a distribution of checks and balances, as well as a wide array of countermeasures to reduce the risk of foreign interference within its workings. Private entities are more vulnerable due to the higher concentrations of influence and the private nature of important individuals. As mentioned earlier, Elon Musk made the decision to deactivate Starlink coverage for the Crimean Peninsula after having communicated with Russian senior officials. The interference of the Internet Research Agency in the 2016 election is another example of foreign agents manipulating tech giants.
As an attempt to curb this burgeoning undemocratic power, implementing a posteriori regulatory measures presents a complex legislative challenge. This difficulty is exacerbated by the fact that the substantial power and influence wielded by the very subjects of possible regulation can be easily levied into lobbying against set regulation.
In order to ensure that technological services and advancements serve democracy and the directives of democratically elected governments it is important to be aware of the aforementioned risks of private ownership of critical technologies. Governments should consider regulatory initiatives, democratic directive structures, and the acquisition of militarily sensitive technologies as means by which to address these risks.
Erika Vodvárková, Elton Högklint, and Fernando Gómez-Acebo are Amsterdam-based participants in the European Horizons Transatlantic Fellowship Programme.
