Why Europe's Regulatory War Against Silicon Valley Will Backfire

By Mike Elgan  |  Posted 2015-04-14 Print this article Print
EU Regulatory War

In the U.S., on the other hand, three separate court cases have ruled that search results count as speech and are therefore protected by the First Amendment to the Constitution, just as books and periodicals are.

Speaking of speech, Google closed the Google News site in Spain because that country passed a law requiring Google to pay newspapers for the privilege of driving traffic to their sites. The site is still offline.

The Spanish example is merely the most recent (and most damaging to newspapers) case where European governments tried to get Google to pay for using headlines and snippets from newspapers in search results. Another case in Germany gave newspapers the option to opt out of Google News. News publishing giant Axel Springer tried opting out. The results were financially damaging, so they opted back in.

You might think that this case proves that Google provides a huge benefit to newspapers without charging them. But Axel Springer concluded that it proves Google's unfair dominance and excess power.

The most insane development in the right-to-be-forgotten rules happened when Europe's data protection chief, Isabelle Falque-Pierrotin, decided late last year that Google must censor the results globally, not just in Europe. Earlier this year, Google refused and the issue has not been resolved.

The implications of the establishment of a precedent where a governmental organization in one country or region can censor the Internet globally are staggering. China will want all mention of Tibet and Tiananmen Square erased globally. Saudi Arabia might insist that any criticism of Islam be purged everywhere. It's a disaster.

European politicians ignore this concern, believing that global censorship based on European values is good and right and global censorship outside Europe based on non-European values is bad and wrong. Google and other companies are expected to simply accept and implement European censorship and reject calls for censorship outside Europe. Or perhaps they believe that every government censoring globally wouldn't wreck the Internet and that the destruction of the Internet—and the power of Internet companies—would be a good thing.

(This speculation sounds extreme, but if anyone has a rational defense of Europe's call to censor globally, I have not found it.)


Facebook is also facing a tsunami of investigations in Europe over its privacy practices. Privacy watchdogs in the Netherlands, Germany, Belgium, Spain, France and Italy have begun looking into the social network's privacy policies and controls. Specifically, they're concerned about Facebook combining user data from WhatsApp, Instagram, Facebook Messenger and Facebook itself. They're also concerned about Like button tracking.


European regulators are also preemptively probing Apple's streaming music service, which hasn't even launched yet. They're probably responding to a complaint from a competitor, which is probably Sweden's Spotify. And they're concerned that Apple is throwing its weight and cash around to make what it believes are unfair deals with music labels for the rights to stream music.

The launch of the Apple Watch has also been conspicuously delayed in the luxury wristwatch capital of the world, Switzerland. A Swiss company called Leonard Timepieces got the right in that country to use the word "Apple" and also the image of an Apple in association with a wristwatch 30 years ago. So now Apple must reportedly wait until that trademark expires in December before releasing the Apple Watch. (The Apple Watch ships April 24th.)


The European Commission announced last month an investigation into whether e-commerce companies engage in anti-competitive practices by restricting the buying and selling of goods and services across European borders. The announcement of the probe was broad, but it's clear from speeches made by EU commissioners that Amazon is a major focus of the investigation, as is Netflix.



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