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Last week, antitrust regulators from the European Commission levied $ 5 billion fine against the Google's Android ecosystem has left a lot in Silicon Valley with a sense of déjà vu.
Although the amount of the fine is unprecedented, the commission 's judgment is only the latest in a series of similar sanctions. and legislation aimed at hindering US technology companies. Although US trade officials have largely ignored it, the European Union is conducting a unilateral trade war on the Internet in an insufficient effort to protect the EU's own technology industry.
The EU seems to have given up hope to compete fairly with the United States. Instead, he simply uses the US technology economy as a personal ATM.
If this sounds extreme, consider the evidence. Since the dawn of the Internet era, regulators have repeatedly targeted US technology companies and their innovative business practices, even when these practices result in better, faster and cheaper services than consumers Europeans have adopted millions.
These fines include massive fines against Microsoft, Intel, Qualcomm and Google, as well as multi-billion dollar tax judgments against Apple and Amazon for taking advantage of EU safe ports. (Amazon CEO, Jeffrey P. Bezos, is owner of the Washington Post.)
Netflix and Amazon have been forced to produce more original video content in the European Union, even though the providers of Cloud services are stored in data belonging to EU businesses and consumers in local data centers. US-based ridesharing and apartment rental services, including Uber and Airbnb, have been severely restricted or banned in Europe.
On the legislative front, laws draped in US consumer protection rhetoric values and consumer rights focus exclusively on the business practices of US-based Internet companies. Earlier this year, for example, Europe has implemented a massive expansion of longstanding restrictions on the collection and use of consumer data. The law, known as the General Data Protection Regulation, has already cost billions to US companies and threatens them astronomical fines for any offense – up to 20 million euros or so. 4% of gross receipts, whichever is greater.
And earlier this month, the union took a step that claimed to "reform" the European copyright law but is widely seen as an attempt to tax internet links, forcing US social media to pay the bills. European sources of information. to link to their content. This last action, which claims to be a neutral antitrust enforcement, is just another barely veiled tariff
The European Commission is objecting this time to three specific practices relating to Google's Android operating system, which, according to the commission, "All this was intended to consolidate Google's dominant position in general Internet search." This includes the aggregation of Google search and navigation apps with the Google Play App Store and the Google Play App Store. 39, prohibition of Android licenses for uncertified versions of the operating system A third practice, which implied that Google pay device manufacturers make Google their only pre-installed search application, was dropped there at least four years old
In addition to the fine, the commission asks Google to stop the practices within 90 days. up to five percent of his daily income for each day the company does not comply. Google is appealing the decision.
This is the second US attack against Google's free software model in as many years. The commission fined the company $ 2.8 billion in 2017 for research practices that regulators have said they prefer Google shopping apps to third parties. (Google is also appealing this fine.)
Neither claim resists the most basic understanding of how the smartphone market or Internet search has ever worked. The tax on the shopping app, for example, makes no mention of the fact that despite Google's purported priority over search search results, it's Amazon and not Google that dominates the trade Internet-based retail
Android, especially in the United States, is competing fiercely with Apple and its iOS operating system, which is much more tightly controlled by Apple than Google controls Android. In fact, complying with the US Applications may require that Google bill software like Apple, which makes Android devices more expensive, which is hardly advantageous for US users.
But protecting US residents have never been the goal of the commission. His latest initiatives point to a dangerous escalation in efforts to create trade barriers around the technology industry native to Europe.
Unfortunately, the real problem of the EU is not that of entrepreneurs in Silicon Valley. It is rather the stubborn determination of the region to pursue a failed industrial policy. While US entrepreneurs operate almost exclusively with private funds, the US has long been directly involved in the development of technology products and services. Beginning in the 1980s and the ESPRIT program, European governments have made repeated efforts to create a regulated technology industry from top to bottom.
Efforts have all failed, largely because of an unfavorable tax climate for high-risk investment, overly prescriptive labor laws that make it impossible to create and quickly terminate new businesses and the regulation of broadband public services that has reduced investments in critical technologies, including cable, fiber and fixed wireless. The most recent initiative was the digital single market of 2015, whose main objective was to eliminate the barriers to electronic commerce in the European Union that worsen. But it also threatened a surge in antitrust enforcement against successful US online platforms, including Amazon, Google, and Facebook, even though their behavior did not meet the traditional antitrust requirements of actual harm.
According to the DSM, market power raises a number of issues that warrant further analysis than the application of competition law in specific cases. The expanded and creative sanctions for US technology companies that go far beyond competition law the only feature of the DSM to see a lot if not any activity.
Source: Kleiner Perkins Internet Trends 2018, page 218.
The results of such an unbalanced approach speak for themselves. According to the most recent findings of the Internet analyst Mary Meeker no European company is among the top 20 most profitable Internet companies. And all the companies on the list, with a few exceptions, have been created over the last two decades – European entrepreneurs had just as much hope of reaching the same level as those of n '# 39; any other country. Yet, no European business has been filed since 1995.
President Trump was wrong to call the US an "enemy" of the United States. But in Silicon Valley, this description may not be too far away. It is a war that we have not started and, without the support of our own government, we have little chance of winning.
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