Big Tech's Bad Week in Europe Signals More Problems in 2018
Big Tech's Bad Week in Europe Signals More Problems in 2018
(Bloomberg) -- The past 36 hours have reinforced Europe’s role as the toughest cop of American tech giants.
With a flurry of announcements, regulators across the continent signaled continued scrutiny of Silicon Valley in the year ahead. The European Union’s top court Wednesday ruled Uber Technologies Inc. must be regulated as a transportation service, a blow to the company’s attempts to avoid taxi rules and licensing requirements.
The ruling followed hard-hitting statements Tuesday by German and French regulators. Andreas Mundt, Germany’s leading competition regulator who built a career on tackling beer and sausage cartels, attacked Facebook Inc. over its alleged misuse of user data. Across the border, France’s privacy watchdog gave Facebook another headache, giving its WhatsApp messaging app one month to stop sharing data with its parent.
And even last Friday, Italian authorities were ordering Amazon.com Inc. to pay 100 million euros ($118 million) to end a fiscal probe into tax evasion.
The announcements cap a year in which European authorities have battled with Silicon Valley’s biggest technology companies. Notable clashes include Apple falling out with Ireland over a 2016 decision to pay $15 billion in back taxes, Alphabet Inc.’s Google being hit with a record $2.8 billion fine over shopping ads, and Facebook, Twitter Inc. and YouTube facing inquiries for the spread of extremist content and hate speech.
Perhaps the most poignant example of Europe’s growing distrust of big tech came in September, when EU Justice Commissioner Vera Jourova branded Facebook’s social network "a highway for hatred" and revealed how she deleted her own account on the social network.
There is little evidence to suspect 2018 will get any easier. Here are some of next year’s looming battlegrounds:
- Google is facing more antitrust punishments related to its Android phone software and dominance in online advertising.
- A court will decide whether Uber should lose its taxi license in London, the company’s biggest European market.
- Facebook, in addition to the added antitrust scrutiny, will face increased pressure to crack down on misinformation and other harmful content on its platform, as will Twitter and YouTube.
- New privacy rules are also going into effect in 2018 will give regulators in each European country more authority to fine technology companies for improperly collecting or sharing data on users.
While proponents of the regulation say Europe is providing a much-needed check against the power of global tech companies, advocates for the industry say it undercuts the region’s attempts to produce its own globally-influential tech companies.
"This is a blow to the EU’s ambition of building an integrated digital single market," the Computer The Computer & Communications Industry Association, an industry trade group, said today following the Uber decision.
What’s unclear is the impact Europe’s actions are taking. Apple, Amazon, Alphabet and Facebook all reported record results in 2017, showing the companies’ business models are as healthy as ever - despite new fines and regulations.
While the U.S. has largely taken a hands-off approach to regulating the tech industry, that could change as its power grows. "There is rising pressure in the U.S. to treat Big Tech more aggressively, but it is unclear if that effort will have success," said Michael Carrier, co-director of the Rutgers Institute for Information Policy and Law in New Jersey.
The biggest risk for Silicon Valley may be if Europe’s approach is emulated. "The rest of the world will look to the U.S. and Europe as the two polestars guiding their analysis of Big Tech," said Carrier.
To contact the reporter on this story: Adam Satariano in London at asatariano1@bloomberg.net.
To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Peter Chapman
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