The EU Is not any Longer Massive Tech’s Largest Risk

Hey everyone, it’s Natalia. Silicon Valley’s arch-nemesis used to be in Brussels. Margrethe Vestager, the European Union’s tech and antitrust chief, has for years been the world’s leading regulator challenging tech giants like Google, Apple Inc. and Amazon.com Inc. She’s doled out antitrust fines and tax penalties and ordered changes in behavior—in some cases prompting her victims to seek help from U.S. officials to stand up to her.

Now, however, the Valley’s mightiest regulatory foe may be closer to home. Under the Biden administration, Washington D.C. has become the new nexus of the Big Tech antitrust fight. The regime has recruited some of the most aggressive Big Tech critics to guide its policy, including Tim Wu as antitrust adviser and Lina Khan to join the Federal Trade Commission.

“What is happening in the U.S. is a sign of the global conversation having changed,” Vestager said in a recent interview with Bloomberg. She added that democracies like Canada, Australia, and Japan have also recently followed the EU’s lead to take a tougher line on tech’s market behavior.

In some cases, Europe no longer has the strictest rules. Recently, “we’re not as much ahead of the curve as we were when it was privacy,” Vestager said, referring to the bloc’s landmark data protection rules, which took effect in 2018.

Now, the EU and the U.S. are set to work more closely together on privacy and tech regulation, Commerce Secretary Gina Raimondo told Bloomberg TV last week. And the idea of establishing an EU-U.S. Trade and Technology Council is likely to come up when President Biden visits Brussels in mid-June.

Discussions between European and U.S. officials could partly be aimed at influencing each other’s policy to protect their homegrown companies. But for the U.S., it could also be about learning from their colleagues across the ocean.

After years of inaction on tech policy, both Republican and Democratic lawmakers are now pushing for more forceful measures. While there still aren’t any concrete decisions in antitrust cases or comprehensive new regulations around liability, for instance, any action taken by U.S. regulators could have wider ramifications and result in a bigger threat to business. By contrast, European enforcement and orders to change business practices have had to center around the companies’ operations within Europe.

That may partly explain the wide gap in lobbying spending by tech giants in the U.S. compared to Europe. Facebook Inc. increased spending by 56% in Washington to $19.7 million between 2018 and 2020, while Amazon spent 30% more to reach $18.7 million, according to a recent report by consumer advocacy group Public Citizen. In Europe, Facebook spent as much as 5.75 million euros in 2020 and Amazon spent as much as 3 million euros, according to the EU transparency register.

Still, European enforcement isn’t about to fade away. In recent months the EU proposed a slew of tech rules aimed at tackling illegal content, shepherding artificial intelligence and regulating so-called gatekeeper companies—all while antitrust investigations continue to plod on.

Even as Amazon, Apple and others face increasingly menacing regulatory threats at home, they’ll still have to contend with Vestager. Natalia Drozdiak

If you read one thing

Leave a Comment