Digital Revolution, Institutional Coevolution, and Legal Innovations

The digital transformation "revolutionizes" entire economies and societies. It can be interpreted as a Schumpeterian technological and economic revolution that fits well into his "Theory of Economic Development" written more than 100 years ago. This paper analyzes three current policy debates with respect to the question, whether and to what extent also radical legal innovations might be necessary for ensuring a proper coevolution of the legal and regulatory framework for market economies regarding the disruptive technological and economic change in this digital revolution. These discussions are (1) the new challenges for competition policy through the large tech firms with very innovative proposals, e.g., about ex-ante regulation ("Digital Markets Act"), (2) the new huge threats to privacy, and the ensuing serious concerns whether the data protection law instrument of "consent" can deal with this problem effectively, and (3) entirely new questions about the governance of data (data access/sharing etc.) with the development of a new (so far not existing) field of data law. It is shown that these current debates can be interpreted as discussions about whether and to what extent traditional legal and regulatory concepts can still deal with this technological and economic change, e.g. through minor adaptations, or whether much more radical and disruptive legal and regulatory change is necessary for ensuring a proper coevolution of the institutional framework for the economy and society