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The Envious Union?

July 24, 2017

 

The claim that Europe is jealous of Silicon Valley’s big tech companies is probably not true

Alphabet, the parent company of the search giant Google, aims to “do the right thing”, according to its official motto. Yet, if one was to observe this line as a commitment to the highest standards of morality, it may trigger a bout of confusion to learn that the same company was subject to an antitrust fine just a month ago. In addition, Apple’s attempts to “think different” landed the company in trouble when it got too creative with its tax bill and was required to pay more. Facebook's ability to “move fast” may be difficult to achieve it moves too quickly and forgets about its data protection obligations. These are all stories of American tech companies causing mischief in Europe.

 

The warnings of such corporate perversity were conveyed long ago. Jean-Jacques Rousseau, a classic sceptic of capitalism, worried about how capitalism would infuse both moral corruption and inequality to the detriment of society.* It appears that the actions of Silicon Valley’s biggest tech giants are representative of this bleak perspective.

 

However, that is only one side of the argument. These tech firms, as mischievous as they may appear to some in Europe, aim to please rather than deplete. The obsession of Steve Jobs, Apple’s pioneer, with perfection and originality, led to the creation of the iPhone, a product which now holds such great dominance and prevalence globally. From an iPhone can Facebook be accessed, a social media platform connecting those billions of people with such an unparalleled ease. A simple search query on Google is now very much the invaluable prodigious modern cure to a curious mind. But it is not the fruits of labour that such companies offer which some Europe object to, but rather how they go about their business. For the EU, it is more about playing fair than playing hard. Google’s antitrust fine, for example, was not issued just because of the tech giant’s dominance in search, but how it came to that dominance, according to the Commission (read more). But even this seems far-fetched, and the economic analysis exposes the fine as just an excuse to hold back dominant American firms in order to help a what is sagging tech sector in Europe (read more).

 

This blog, name after the aforementioned philosopher that is Rousseau, does not necessarily aim to reflect his views on society and commerce. Yet, some posts on this blog have sometimes detailed a somewhat aggressive push back by Europe against the some of the world’s richest and biggest tech companies, including this post. Although, even where this agenda can be fairly evident here, its premise is probably not envy. It may be more accurate to highlight this as an ideal drawn from a scepticism from the likes of Rousseau which focuses on holding those in powerful positions to account and ensuring equity. In an interview with The Economist Margrethe Vestager, the European Commissioner for Competition, emphasised this point: “We have a European rulebook and if you want to be in the European market, this is the rulebook you play by.” Such a stance is, of course, necessary, but a slippery slope is always possible. Europe’s agenda can easily depart from what would be a noble set of checks and balances to a rather ill-reasoned and unfair crackdown.

 

So far though, nothing the EU has done has managed to encapsulate Rousseau’s ideology more than its upcoming data protection laws. The General Data Protection Regulation, or GDPR, is Europe’s greatest strive to return power back to the people by giving them control of their data in a world where such control has often been absent or faint at the most. It ensures that companies are in fact playing fairly. But even here there is a fine balance between implementing appropriate rules for unprecedented times and stymying legitimate commercial activity. If anything, Europe’s adversity to tech companies is hopefully more to do with the undesired consequences of their activities on consumers and the market.

 

As such, a relatively smooth implementation of long-needed data rules, coupled with Brexit, presents an opportunity for Europe to present itself as a hub for technological innovation to rival that of Silicon Valley. This is an opportunity which Emmanuel Macron, the French President, appears keen to take advantage of. Europe could go from a strenuous market to a more ideal and increasingly attractive place for tech firms to grow and flourish. This is all hopefully not motivated by a sense of envy nor by unnecessary corporate scepticism. Europe’s restraint on these dominant tech companies should ideally be about doing the right thing. It will be seen whether that turns out to be true.

 

Sources:

*This summary of Rousseau’s idealogy is sourced from Pankaj Mishra book called Age of Anger: A History of the Present

 

Facebook facing privacy actions across Europe as France fines firm €150k 

 

Paris touts ‘game-changer’ Macron to woo banks from London

 

EU fines Google €2.4bn over abuse of search dominance 

 

The Agenda: Margrethe Vestager On Europe 

 

Apple appeals against EU tax ruling, Brussels says no cause for low tax bill

 

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