Brussels to the test of its will to tackle Big Tech

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Updates to EU technical regulations

The feud between Brussels and Big Tech has grown noticeably over the past year amid growing European concerns over how Google and Facebook are using their dominant positions in the market.

As US President Joe Biden’s administration now prepares to step up scrutiny of tech companies, European regulators have taken a tougher line against the Silicon Valley giants over the past year by launching antitrust investigations.

Assembly Research estimates that out of around thirty competition cases launched against Big Tech around the world since 2010, a third were opened in 2020, with Europe by far the most active. Around five cases have been launched in Europe since early 2020 against Google, Amazon, Facebook and Apple.

Regulators in countries like France and Germany have also started enforcing their own laws to restrict the power of Big Tech.

Skeptics point out that antitrust cases will take years to have an effect in the markets they seek to correct, and often come too late to save Big Tech’s rivals. The process is painfully slow. Investigations and appeals to EU courts take years. Meanwhile, tech companies continue to post record profits.

Big Tech critics point to Microsoft’s infamous battle with the EU over allegations it exploited its dominant position in the browser space. The software company tied its free Internet Explorer as the default browser for Windows, helping to bankrupt its serious rival, Netscape. By the time regulators struck a deal with Microsoft in 2009 on their battle, Netscape was a killer.

Another example cited is the case of Google. The European Commission opened its first investigations over ten years ago into allegations of anti-competitive behavior. He has since fined the company around $ 10 billion. Google is challenging the fines, saying it creates more choice, not less, for consumers. Meanwhile, Google’s smaller rivals say their businesses continue to be undermined by the search giant’s abuse of its strong position in their markets.

Antitrust investigators in Brussels, however, believe they have a remedy for the slowness with which Big Tech is held to account. The Digital Services Law and the Digital Markets Law are bills aimed, respectively, at clarifying the policing responsibilities of large platforms and limiting their market powers.

The DMA, in particular, establishes a list of rules that spell out which activities are illegal, including a ban on companies pre-installing their own apps and a ban on those who manipulate their algorithms from ranking their services more prominently to the detriment. others. .

Both bills are recognition from EU Competition Commissioner Margrethe Vestager that fines are not enough to deter market abuse. Greater regulatory clarity is needed.

There is political support at a high level to pass the bill in the first half of next year. Andreas Schwab, the German MEP who is leading the debate on DMA in the European Parliament, believes it is time for tough rules to be set to limit the power of Big Techs, especially the five biggest companies. Schwab said in an interview with the Financial Times last month that regulators and the public have been “fooled” by Big Tech for too long.

Some member states, which alongside parliament will approve the new laws, want even stricter regulations. The finance and economy ministers of France, Germany and the Netherlands said in May that the DMA was too lenient on tech giants and lacked ambition. They want Brussels to step up its control over so-called killer acquisitions, where companies systematically buy up start-ups in order to stifle competition.

The decline of Big Tech, which invests millions of dollars in lobbying efforts, has been strong. Its supporters argue that tougher antitrust laws will only stifle innovation and choices for European citizens.

But some critics are still frustrated by what they see as a lack of meaningful application to correct bad behavior. They wonder how far Brussels will go in the fight against Big Tech. Few EU observers, for example, would expect Brussels to order the dismantling of tech companies. And the execution process should remain slow.

Damien Geradin, an antitrust lawyer who has represented companies in investigations against Apple and Google, said: “These companies have been free-riding for 10 years. They will be investigated in perpetuity until they have had enough and want to move on. Their size makes them immune.

javier.espinoza@ft.com

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