The role of private companies in democracy

Expected Outcome

Projects should contribute to all of the following expected outcomes:

• EU and national policymakers have a better understanding of corporate influence on democratic processes and outcomes, including activities through service providers in the EU internal market, enabling them to develop strategies to mitigate negative effects and promote a more just and inclusive society.
• EU and national policymakers have access to evidence-based recommendations and develop more effective policies and regulations for promoting responsible corporate behaviour, rules on integrity and transparency, preventing corruption and protecting democratic values.
• Civil society organizations and citizens have a greater understanding of the complex relationships between private companies and democratic governance, enabling them to hold corporations and policymakers accountable for their actions.

Scope

The relationship between private companies[1] and democratic governance is becoming increasingly complex and contentious. As corporate interests continue to grow in influence, this raises concerns about the potential risks and benefits of private sector involvement, particularly in policymaking on contentious topics such as climate change adaptation, environmental protection, data protection, privacy, civil rights, and the rights of minorities. Thus, there is a pressing need to investigate the impact of private sector involvement on democratic processes and outcomes, as well as its long-term effects on political inequalities and shifts in power dynamics.

Large corporations and lobbying groups can inform policymaking with valuable evidence and expertise, but also potentially exert undue influence that may compromise the public interest. The implications of corporate power for democratic values, human rights, and the public good are far-reaching and require careful examination.

Moreover, external private actors, such as foreign investors and multinational companies, together with influence activities within the EU internal market through service providers (for instance lobbying or political advertising) can shape democratic processes and outcomes, and, if not conducted responsibly, risk undermining the integrity of democratic debate.

To address these challenges, research is needed (including by SSH disciplines) to explore the complex relationships between private companies, lobbying groups and democratic processes, to develop tools to assess democratic impact of corporate practices, and to identify strategies to promote responsible corporate behaviour, to uphold transparency and democratic accountability of business practices and to ensure that private companies serve the needs of democracy and the public good.

Proposals should investigate the influence of large corporations, business lobbying groups, and external actors on democratic processes, exploring the implications of corporate power on democratic values, diversity, equality (including age equality), inclusion, human rights, and the public interest. This examination should also extend to the impact of private companies on multilateral decision-making, including at the EU level, and analyse how corporate interests shape decision-making processes at the transnational level.

Particular attention should be given to the role of corporate lobbying, public-private partnerships, the role of corruption, perceived corruption, and undue influence originating from the private sector in undermining democratic governance and the public interest. This includes examining the potential for corrupt practices to emerge, such as bribery, revolving doors, and other forms of undue influence, which can erode trust in institutions and perpetuate inequalities. Furthermore, it is essential to investigate direct interferences by corporations that go beyond legitimate ways of involvement in public sector decision-making. These interferences can take many forms, including artificially spreading or amplifying disinformation in order to, influence public opinions, and steering behaviours, contributing to the normalization of extremist or polarizing actors and discourses, which can have far-reaching consequences.

Proposals are encouraged to critically examine the structural power of capital in shaping policy agendas and public discourse, and to consider how this power contrasts with that of labour and civil society. Proposals could encourage structured and sustained dialogue among business actors, citizens, regulators, and watchdog organizations, with the aim of developing inclusive and accountable governance frameworks that reflect diverse interests and promote transparency.

Proposals are encouraged to investigate the influence of private companies on democratic governance, such as – but not limited to – the potential risks and benefits of private sector involvement in sortition-based citizens' panels and other forms of participatory and deliberative democracy processes.

Proposals should use a gender-sensitive and intersectional approach in their research to analyse how the actions of private companies in a democracy impact individuals’ rights differently based on their identities.

Proposals are encouraged to identify other relevant EU-funded projects exploring the role of private companies in democracy and consider exploring potential collaboration opportunities with them[2].

[1] In this context, when referring to private companies, we specifically mean large undertakings, namely multinational and global corporations, including industry and tech platforms, as opposed to small and medium-sized enterprises (SMEs).

[2] For instance, but not limited to: HORIZON-CL2-2023-DEMOCRACY-01-03: New approaches for combatting corruption and other undue influences on political decision-making.