The top politician wants to limit the power of tech companies.
(Photo: REUTERS)
austin The Vice President of the EU Commission Margrethe Vestager stated that the digital world has developed from nothing to a gigantic industry. “Democracy and the rule of law have been pushed out,” she warned at the South by South West (SXSW) technology festival in Austin, Texas on Saturday. “It’s time for democracy and the rule of law to come back – maybe with some revenge.”
The top politician read the sentences with a smile. The content wasn’t fun though. Just the day before, the EU Commission had initiated new proceedings against the two US technology groups Google and Facebook because of an online advertising agreement. It is being examined whether the 2018 deal known as “Jedi Blue” violates competition law.
The consequences of two digital laws that the EU has launched will be much more far-reaching. The law on digital markets (Digital Markets Act) is intended to limit the market power of Internet giants such as Facebook, Amazon and Google. The Digital Services Act (Digital services Act) deals with social aspects such as hate speech and counterfeit products on the Internet and obliges platform operators to act.
For years, politicians in the US and Europe have largely agreed that the power of large tech companies should be limited. With Lina Khan, US President Joe Biden has put an ambitious boss at the head of the FTC, who wants to take on tech companies. However, their influence is limited.
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“We urgently lack the necessary money and the necessary personnel to really be able to control the companies,” Khan warned in an interview. However, the planned increase in their budget was stopped. Should the Democrats lose to the Republicans in this year’s midterm election, Khan would be further weakened.
“Silicon Valley doesn’t really take Washington seriously, but is afraid of Brussels”
Therefore, US tech companies are focusing more on the EU. “Silicon Valley doesn’t really take Washington seriously, but is afraid of Brussels,” said a US tech insider. “The CEOs of Apple, Google and Facebook fear their power could simply be limited by the EU even if Washington fails,” the insider said.
The technology groups underestimated the consequences of the introduction of the General Data Protection Regulation (GDPR) by the EU. This would not only have changed the business of companies in Europe, but also in the USA. “First California copied the GDPR as a state, now other states will follow and at some point the government in Washington will follow,” said the insider.
The Facebook parent company Meta had written in its annual report that the group could consider withdrawing from the trading bloc due to strict regulation in the EU. The group later rowed back in a statement: “Meta is in no way threatening to withdraw from Europe.”
Vestager said that Europe is a market of 450 million people. Companies should consider carefully whether they really want to deprive themselves of the opportunities of such a large market. Regulation is not a bad thing, but rather creates equal opportunities, Vestager advertised.
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