The MNC‐Coalition Paradox: Issue Salience, Foreign Firms and the General Data Protection Regulation

Abstract

While the EU takes on an increasingly global regulatory role, we have only a limited understanding of how or when foreign firms influence EU regulation. Multinational Corporations (MNCs) have many of the power resources that determine lobbying success. We argue, however, that high salience blunts foreign corporate power. High salience generates legitimacy concerns for EU institutions, creating a political opportunity structure that favours pluralistic participation. Civil society can point to the instrumental power of foreign firms as a means to contaminate business interests, amplifying consumer voices in the process. We label this the MNC‐Coalition paradox. We investigate the European Union's General Data Protection Regulation to assess our argument, as the revelations made public by Edward Snowden created an exogenous shock in salience. Highlighting the presence of MNCs – such as Google and Facebook – in the lobbying process allowed civil society leaders to delegitimize business preferences and bolster consumer protection. In addition to the theoretical contribution, our evidence sheds light on the policy process behind legislation that will shape fundamental civil liberties and privacy rights not only for Europeans but globally.

Regulating the European Data‐Driven Economy: A Case Study on the General Data Protection Regulation

“…On the one hand, our findings are thus compatible with other studies that provide more detailed, process-level evidence of how issue salience was indeed a reason for many actors to distance themselves from business interests (Kalyanpur and Newman 2019;Rossi 2016). On the other hand, our findings suggest that this was in fact only one causal mechanism by which the Snowden revelations were translated into coalitional change -with geo-economic conflict being the other.…”

“…For example, business groups are more successful in the EP when issue salience is low (as well as when they were united and proposals are dealt with by 'mainstream' committees) (Rasmussen 2015). Business groups, and multinational corporations in particular, can therefore be expected to be more influential under conditions of low-salience, 'quiet politics'; conversely, 'business power goes down as political salience goes up' (Culpepper 2010, 177;Kalyanpur and Newman 2019).…”

“…In fact, superficial agreements over terms often hide deeper disagreements over their meaning (Hildén 2019, 130-31).Others have argued that data protection was initially not very high on the agenda of many European firms. It was only later that US lobby efforts 'incentivized European business to join the watering down process' [Kalyanpur and Newman (2019), p. 454). In any case, the fact that the Commission's proposal clearly decommodifies personal data -and the fact that many business groups later vehemently opposed it -strongly suggest that their influence on the content of the proposal was limited (Hildén 2019, 152).…”

“…Business groups, and multinational corporations in particular, can therefore be expected to be more influential under conditions of low‐salience and “quiet politics”. Conversely, “business power goes down as political salience goes up” (Culpepper, 2010, p. 177; Kalyanpur & Newman, 2019).…”

“…Although business interests were initially successful in amending and blocking the GDPR, the exploding public interest in data protection in the wake of the Snowden revelations made it much more difficult for business groups to lobby against data protection. We are not the first to make this argument (Kalyanpur & Newman, 2019; Rossi, 2016), but we are the first to systematically map the changes in the discursive and coalitional dynamics before and after the revelations, using discourse network analysis (Leifeld, 2013). Our goal here is not to show how exactly salience changed the dynamics of the political conflict, but to systematically show that it did.…”