Digitalisation and the (Unintended) Illegal Outsourcing of Legislative and Administrative Power in Denmark

Denmark is far ahead in developing Digital Government. The digital infrastructure is highly developed. Automated decision-making is used on a growing scale within the areas of tax, environmental regulation and welfare. In some narrow and defined areas AI is integrated. This is not without issues, as challenges have emerged. One of these challenges is a loss of insight by the public authorities into the formation of decisions directed at citizens. This is mainly due to the outsourcing of the development and maintenance of the used technologies. As an example, the Minister of Taxation in 2014 reported to the national Parliament that the tax authorities had lost the insight into, as well as the control of, more than 200 systems used within this area of administration. Only the private suppliers of those systems possessed the knowledge necessary to describe and change the functionalities and digital decision-making. Therefore, to a certain extent power of decision-making had – unofficially – been outsourced to private suppliers. This unwanted side effect of digitalisation was, however, counteracted by the Danish Ombudsman in a recent case concerning one of the core Danish digital infrastructure components (the national NemID). In the summer of 2017 the Ombudsman stated that if private companies were to develop and operate such critical digital infrastructure, the explicit acceptance of the democratically legitimised parliament was required. This applies, even though a public procurement procedure has been performed legally correct per the Ombudsman. This paper will focus on this challenges caused by digitalisation of the public sector, the disruption of the allocation of administrative and legislative power in the national constitution. An argument will be developed through an examination of both recent literature as well as case-law from the Danish Parliamentary Ombudsman, ultimately resulting in a presentation of the current Danish solution to the challenges described above – which hopefully can inspire and serve as an input to a discussion of the relationship between private suppliers of digital services and public authorities at a European level.