Donald Trump's Misguided Love for the EU’s “Fantastic” Bureaucrats

(Bloomberg Opinion) -- President Donald Trump called CNBC this week to offer grudging praise to the European Union – not something that happens every day. He suggested the U.S. should follow the example of Brussels’s “fantastic” bureaucrats in hitting the likes of Alphabet Inc.’s Google and Facebook Inc. with antitrust investigations and fines.

Unsurprisingly, it wasn’t the details of competition law that were uppermost in Trump’s mind, rather the sheer dollar amount being squeezed out of American companies for Europeans’ benefit. “Easy money,” he said admiringly.

Yet the president seems to have missed the point of the EU’s assault on Silicon Valley and Seattle. The big fines may grab the attention, but it’s the argument over who gets to profit from all of the world’s data that’s really driving the strategy in Brussels. And if data is indeed the new oil, then America and Europe are probably headed for a resource war.

The recent billion-dollar fines inflicted on Google and Apple Inc. by Europe’s top antitrust official, Margrethe Vestager, should just be seen as an opening salvo. Europe’s bigger ambition is to tackle the way tech platforms hoard the user data that makes their businesses so lucrative, whether through the selling of advertising or other services like shopping. This isn’t just about improving privacy and security for internet users; it’s about sharing the spoils from their data more fairly. If Brussels is successful, it would have a much more profound impact on the revenues of the tech giants than the occasional multi-billion dollar fine.

This question of who gets to profit from the so-called “digital dividend” – the monetization of the data from social media, search engine results, and online marketplaces – might well be the central political battle for tech firms in the coming years.

Google, in particular, is front of mind for European officials. Over the past decade, it has scanned Europe’s literature, its art, its city streets, and its citizens’ deepest desires. It’s been forced to destroy or mothball some of that data, but the company’s ability to keep hoovering up the world’s information is undiminished. The question in Brussels is whether the financial benefits should accrue only to Google and its ilk.

EU officials are toying with several potential measures. Some argue that users should be able to own their data in some way and profit directly from selling it back to the platforms. Others, such as Vestager herself, suggest the tech giants should share their data with rival companies and startups to improve competition.

The real temptation for European governments will be to ask either for a slice of the data revenue via special taxes or – more likely – for direct access to the data for use in public services. Think location information for mass transport systems, or medical data for health. This would no doubt be derided as punitive protectionism by the U.S., but the Europeans would see it as just reward for their taxpayers’ heavy investment in research and telecoms infrastructure (on which the tech platforms have essentially taken a free ride).

Of course, plenty of Americans will agree that tech’s “Big Brother” behavior needs to be curbed. But the backdrop of trade tensions between Brussels and Washington will make it harder to find common ground on issues like this. A new paper by Andrea Renda of the Center for European Policy Studies makes a convincing case that worries about cybersecurity and the future power of artificial intelligence are pushing countries to seek more power over data flows anyway, even at the cost of a less open internet.

So while Trump may chuckle at Europe using America’s tech champions as an ATM, he will balk at what comes next: A Europe that wants to take back control of its data. The U.S. is unlikely to concede without a fight.

To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.

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