Europe is gunning for Silicon Valley. As part of its ongoing effort to reposition its economy, the European Union just formally unveiled plans to unify its fractured markets and take a more aggressive stance toward U.S. tech companies, according to The Wall Street Journal. If you thought Europe was already rough on the likes of Google and Facebook, just wait.
The EU’s new strategy is twofold: First, it wants to unify the territories of all 28 national markets there and make it easier to create rules that automatically span those countries. Second, it aims to get more aggressive about probing the practices of American companies like Amazon, Google, Facebook, eBay and the like.
If passed, the proposal could have a pretty dramatic impact: Treating the EU like one big digital market would mean sites like Netflix wouldn’t have to geoblock content, as copyright laws would be smoothed out and made more consistent, as would cross-border shipping costs. It would also substantially change the way telecoms are regulated in Europe.
At the same time, the EU would open up an antitrust inquiry to examine how companies like eBay and Amazon approach online trade and whether their practices put a damper on competition in Europe. The idea here is to put up more formal challenges to the way U.S. companies operate in Europe, with the hopes of giving the European tech industry a shot at competing with these entrenched giants.
This is just Europe’s latest show of force against Silicon Valley. On April 16, the EU filed suit against Google for alleged antitrust practices, arguing that the company favors its own products in search results. A second inquiry was also made into Google’s practice of bundling its own apps with Android. Last week, the EU added another antitrust inquiry to the list: This time, they’re looking into how paid ad placements might impact search results. Oh, and 25,000 European users might file a class action lawsuit against Facebook, accusing it of violating privacy laws.
In February, President Obama addressed the EU’s aggressive posturing in an interview with Re/code:
In defense of Google and Facebook, sometimes the European response here is more commercially driven than anything else…. sometimes their vendors — their service providers who, you know, can’t compete with ours — are essentially trying to set up some roadblocks for our companies to operate effectively there.
We have owned the Internet. Our companies have created it, expanded it, perfected it in ways that they can’t compete. And oftentimes what is portrayed as high-minded positions on issues sometimes is just designed to carve out some of their commercial interests.
Today, an EU court dealt another blow to U.S. tech, ruling that Microsoft must change the name of Skype in Europe, because it is too similar to Sky TV.