Pando

America tech companies increasingly look to the EU to regulate their rivals

By Paul Bradley Carr , written on January 22, 2016

From The Europe Desk

In yesterday’s Financial Times, John Gapper wrote a fascinating column comparing the state of tech companies in Europe and the US.

Specifically, he disputes the prevailing wisdom that Europe should we worried about a lack of early stage tech startus.

Not so, says Gapper. Europe has plenty of small startups — what it’s lacking is the big tech companies that the Valley boasts.

Europe’s economies lack big companies not little ones. The deficit is not in start-ups but scale-ups: small companies that grow rapidly. Europe has many clusters of enterprises but too few expand enough to be the next Facebook, founded by Mark Zuckerberg in 2004.

But help is at hand, courtesy of the European Commission…

The European Commission has jumped into the act itself, declaring in a “2020 action plan” that “would-be entrepreneurs in Europe find themselves in a tough environment” and that “Europe needs a thorough, far-reaching cultural change” to match US enthusiasm for creating companies.

The column makes for interesting reading. But it’s also hugely ironic, given recent conversations I, and my colleagues here at Pando, have had with tech entrepreneurs and heads of various industry groups here in the US.

Y’see, while commentators in Europe are praising the US for its ability to build seemingly unstoppable tech jugganauts, American industry insiders are equally impressed with Europe. For the continent’s willingness to regulate and rein in those exact same US tech giants.

Copyright, privacy, monopoly/antitrust… In conversations with rivals and critics of Uber, Google, Facebook and similar unicorns, we’ve heard the exact same hope: Europe will be the place they finally get their ass handed to them by lawmakers.

Certain there’s precedent. It was in Europe that regulators collected over $3bn in antitrust fines from Microsoft and where Google now finds itself in the crosshairs. It’s Europe that laws have been designed to restrict how companies including Facebook and Amazon handle user data. The EU is already investigating Uber’s abuse of user data, and has made clear it’s willing to take on an US tech company that it belives is trampling the rights of EU citizens.

Unlike lawmakers in the US, that are often overwhelmed by organzied user revolts (Uber) or bribed into submission by lobbyists (Uber again), European lawmakers are the Honey Badgers of business regulation. Which is to say, they don’t give a fuck.

And nor do they have to: Tech lobbyists would be hard pressed to find someone who actually votes in European elections, never mind actually organize those voters into pressuring the EU to back off.

Sure, even inside Europe there are many who criticize EU lawmakers for stifling innovation and for simply not “getting” tech. And there’s a lot of truth in the criticism. The EU’s interference in member states’ laws is one of the reasons that the UK government is planning a referendum on whether to leave the EU altogether. But when asked to pick a side between overzealous EU lawmakers and US corporations, it’s rare that the Googles and Facebooks come out on top.

And so now we have the curious phenomenon of US tech bosses putting their faith in foreign politicians to do what local lawmakers won't. To hold to account companies like Uber and Google who otherwise would able to act with total impunity around the world.

For good or ill, America has long regarded itself as the world’s policeman when it comes to international diplomacy. Now, also for good or ill, it seems like Europe is building a similar reputation as the world’s business policeman.

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