Why Europe's Regulatory War Against Silicon Valley Will Backfire

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

NEWS ANALYSIS: Europe is apparently hell-bent on bringing American tech companies to their knees. Here are the reasons why.

European regulators and other government bodies have become obsessed in recent months with using every legal tool at their disposal to harm American technology companies like Facebook, Apple and, above all, Google.

It goes beyond protectionism and beyond anti-Americanism. Ultimately it's a war against the Internet itself. And it's hurting Europe.

One strange element of Europe's relentless attacks on Google is that in fact Europe doesn't oppose Google—only European politicians and regulators do. In fact, Europe is one of the most pro-Google regions in the world.

For example, while Google's search market share is about 67 percent in the United States, it's north of 93 percent in Europe. And in the countries where action against Google is most aggressive, it's even higher than that—for example, about 95 percent in France and about 96 percent in Spain.

European critics of Google will tell you that this "dominance" is the problem, but it bears a reminder that Google's search market share isn't about Google "taking" share. It's about the people exercising their choice and preference.

While European critics of Google would say that such dominance is a big part of the problem, I see a massive disconnect between European citizens who overwhelmingly prefer Google as it is, to a massive bureaucracy (influenced by industry) that disagrees with the European public on the Google question.

Let's take a look at European elites' war on Silicon Valley, starting with...


The Financial Times reported on April 14 that the European Commission's Competition Office is set to formally charge Google with abusing its dominance of Internet search in Europe.

This is an old charge against Google and one that has been mostly dismissed outside of Europe.

Nevertheless, EU's Competition Commissioner Margrethe Vestager will announce plans to serve Google with a formal "statement of objections" listing the complaints against it by various companies in the EU, the Times and several news services said, quoting conversations with unnamed sources.

Germany's Hamburg Commissioner for Data Protection and Freedom of Information last week ordered Google to change user privacy by the end of the year. The order requires Google to get explicit consent from users to combine data from different Google services and also be more transparent with what Google does with that user data.

Google was also fined in France and Spain over related concerns, and agreed to comply with privacy policy changes in the UK and Italy. In a nutshell, Google is saying that all Google services covered under a single password sign-on are one product—that Google is the product. European regulators' position is that they’re separate "products" or services and therefore must be treated as such.

And, of course, Europe's right-to-be-forgotten laws mostly target Google, although technically they also go after Yahoo Search and Microsoft Bing, as well as other search engines. In a nutshell, Google and other search engine companies are required by European law to allow citizens to petition to have certain links removed from search results when the search involves the name of the person. For example, if someone was involved in some past scandal, citizens can request that Google remove links to newspaper articles reporting about it.

Let's be very clear that the right-to-be-forgotten is censorship. And censorship is mostly unacceptable in Europe when it comes to books, newspapers and magazines. There seems to be a bizarre consensus among governments and elites in Europe that new things, such as Google search, are invalid and can be meddled with because they don't really count as legitimate "speech." Old things, on the other hand, such as books, magazines and newspapers do count, and therefore cannot be censored because they represent legitimate speech.



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