What the blithering flip are Eurocrats thinking? “Hmm: the EU is falling further and further behind. The Eurozone’s economy is no larger than it was in 2006. What shall we do about it? I know: Let’s pick a fight with Google!”
Brussels has accused the online giant of skewing the market against competitors with its Android mobile operating system. Margrethe Vestager, the EU competition chief, thinks Google is abusing its dominant position. After a year-long investigation, she says: “What we found is that Google pursues an overall strategy on mobile devices to protect and expand its dominant position in Internet searches.” If found guilty, the search engine faces vast fines.
Google’s response strikes me as a pretty good one: Customers are free to delete or retain its apps as they wish. But this isn’t really about Android. It’s part of a sustained Brussels campaign against American tech companies.
A few weeks ago, I sat in a committee room in the European Parliament watching Germany’s commissioner, Gunther Oettinger, talk about how Europe needed to “take on America” in the digital sector. Plenty of analogue-era companies, perhaps especially in Germany, are cheering him on.
Dead tree media, such as the Axel Springer group, hate the way they depend on Google to drive traffic to their sites, and hate even more the way it can sell advertising based on their content. Deutsche Telekom, which is partly owned by the German government, hates the way its customers use its network to make calls on Skype, send messages on WhatsApp and watch videos on Netflix and YouTube—– none of which earns the old company a single euro.
TUI, the world’s largest travel agency and tour operator, hates TripAdvisor. German booksellers hate Amazon. German cab-drivers hate Uber. And so on.
As well as pursuing individual actions against some of these firms, the European Commission has launched a “comprehensive investigation” into the role of Internet platforms, such as search engines, online marketplaces, social networks, app stores and services in the sharing economy. Almost all of these happen to be American: Think Amazon, Facebook, Apple and Uber. As Commissioner Oettinger put it at the launch, the EU needs to regain its “digital independence.”
Is it just coincidence that so many of the companies being targeted by the European Commission are based in the United States? Yes and no. There has always been an anti-American streak in the EU, which was latent during the Cold War, but became active after 1990.
Recall, for example, the way in which the EU spent an absurd amount of money on developing a satellite system to rival GPS, even though GPS was available for free in order, as the then French President Jacques Chirac put it, “to challenge American technological imperialism.”
But, in truth, these companies can hardly be other than American when the climate in Europe is so hostile to innovation. As Berin Szoka of think tank TechFreedom puts it: “Europe has a collective insecurity complex about the Internet.” When it isn’t attacking Google, it’s trying to regulate blogs.
European companies are not alone in wanting to build barriers to entry, of course. Firms all over the world resist competition from newcomers. Nor are Euro-firms unique in seeking to use legislation to undermine their rivals. Indeed, I remember several years ago being lobbied by Google itself to oppose some supposedly anti-competitive practice by Microsoft. I warned the company then that it was fashioning a weapon that would one day be turned against it.
What makes the EU different is the sheer remoteness of its institutions. Being as distant as they are from the voters, who are also the consumers, EU functionaries are commensurately vulnerable to special pleading and producer capture. As Szoka says: “Regulatory discretion is used as a rule of digital protectionism, and Europe falls further and further behind Silicon Valley.”
The paradox is that, by pursuing such heavy-handed intervention, Eurocrats are creating the very thing they say they want to stop, namely a flow of the best brains and the liveliest entrepreneurs from my side of the Atlantic to yours. The real analogue-era mastodon here is the EU itself, with its 1950s, top-down, dirigiste structures. How much longer will it survive?
Dan Hannan is a British Conservative MEP.
