At the heart of this research lies the assumption that the global digital economy has profoundly transformed the balance of power between public and private actors. Digital governance has in fact become a site of negotiation between different sources of authority: states, supranational institutions, and multinational corporations. This thesis analyses how the European Union attempts to regulate large digital platforms, particularly focusing on Apple-Ireland and Amazon-Luxembourg state aid cases. To explain these developments, it relies on Susan Strange’s theoretical framework of structural power and triple diplomacy. By analysing and explaining the interaction among states, supranational institutions and multinational corporations (MNCs), this research contends that, because of their command over data, technology, and markets, Big Tech firms have become structural actors capable of influencing and, at times, redefining the regulatory capacity of national governments. Drawing on from Strange, this thesis indeed argues that digital corporations are capable of shaping the “rules of the game” of digital governance, rather than simply operating within them. This shift of power from states to markets has elevated digital tech firms from economic entities to political interlocutors that negotiate with states as almost equals. As a result, digital governance has become the locus of continuous negotiation across Susan Strange’s three dimensions of diplomacy: government-government (or supranational-government), government–firm, and firm–firm. In this context, the EU has responded to the increasing private power of MNCs by leveraging its regulatory authority and market power, attempting to reassert fiscal sovereignty, promote tax justice within the Single Market and project its global influence in the digital space. The empirical section analyses the EU’s antitrust and state aid investigations into Apple and Amazon’s tax rulings granted respectively by Ireland and Luxembourg. According to the Commission, both Member States had provided the two American firms selective fiscal advantages in violation of Article 107 TFEU, artificially lowering their tax burdens and thus distorting competition within the Single Market. Both decisions constitute paradigmatic examples of triple diplomacy at work, revealing the inherent tensions at the state and supranational level in governing an increasingly digitalised and globalised economy. The Apple and Amazon cases also demostrate the structural inadaquancy of the current global tax regime, which was designed for an industrial economy and, thus, is ill-equipped to tax intangible assets or to assess the economic presence of firms that operate digitally across jurisdictions, regardless of their physical presence. The OECD/G20 global tax reform process is also analysed through the lens of structural power and triple diplomacy. The thesis argues while the OECD reform prove the need for stronger multilateral coordination and more binding global rules, it also reveal the political obstacles that hinder progress, especially when reforms challenge the interests of the most powerful states and/or firms. The final part of the thesis addresses the geopolitical and normative confrontation between the EU and the US over digital governance and the unavoidable clash between the American market-driven and the European rights-based model of digital economy.
Arianna Rosa C. Modica (Thu,) studied this question.