Forget techlash — The biggest problem for tech is a widening transatlantic rift
LONDON — Like a geeky alternative to the ice bucket challenge, the latest global trend to go viral is railing on Big Tech.
Its easy to see why.
Facebooks perceived role in the 2016 U.S. election and other political campaigns worldwide — and its subsequent potential misuse of user data — has won it few friends. Amazons expanding digital footprint worries many about the future for Main Street stores and their legions of at-risk workers. And Google, already no stranger to its own run-ins with global regulators, will likely soon face a hefty antitrust penalty linked to Android, its popular mobile software.
But below the surface of this so-called techlash by policymakers from Brussels to Washington, the same divisions quickly reappear over how Europe and the United States want to regulate Silicon Valleys biggest names.
For every antitrust charge or tax clawback that policymakers in Brussels or other EU capitals demand from an Apple, Uber or Twitter, theres a stony silence — or outright derision — from many of their counterparts in Washington, a lot of whom remain openly skeptical that Europes heavy-handed tactics are either merited or can address the increasing concentration of digital power in the hands of a few (mostly West Coast) tech moguls.
Regional differences over policing the internet are on the rise.
This transatlantic digital rift is, if anything, widening. The inability for European and U.S. officials to find common ground does not bode well for the future of the internet.
Regional differences over policing the internet are on the rise. If two of the Western worlds largest digital markets cant agree on the norms underpinning the tech world, it will likely prove difficult to convince others — notably fast-growing developing countries where people are just now coming online — to follow the lead of either Brussels or Washington, and not that of Beijing or Moscow and their more authoritarian approaches to the world wide web.
It also will weaken the legitimate — and ever-expanding — efforts to rein in the excesses of the digital world if Facebook, Google and others continue to get mixed messages from EU and U.S. officials about what is now expected of them.
Competition and data
The friction between Europe and the U.S. boils down to different takes on the central issues at the heart of global digital regulation.
On competition, Margrethe Vestager, Europes antitrust chief, and her national counterparts have been very clear.
From the European Commissions €2.4 billion antitrust fine against Google (the company is appealing) to Germanys charges that Facebook abused its social networking might (it denies any wrongdoing), the regions policymakers have made a direct link from these companies digital dominance to significant harm to EU consumers, corporate rivals or even our politics.
U.S. officials are unconvinced. Speaking in Washington last week, Makan Delrahim, who heads the Justice Departments antitrust division, questioned the broad brush use of competition rules to rejigger entire industries — let alone relying on antitrust law to police digital giants whose actions may (or may not) harm Western democracies.
The same goes for how tech companies use reams of personal data generated each day.
With Europes new privacy standards roughly a month old, many of the Continents policymakers are crowing about how these rules have been adopted well beyond the EUs borders, helping to reshape global data protection practices from Argentina to South Korea.
Wilbur Ross, the U.S. commerce secretary, has criticized Europes revamped rules | Chip Somodevilla/Getty Images
Thats not how many in Washington see it. Wilbur Ross, the U.S. commerce secretary, has criticized Europes revamped rules, known collectively as GDPR, claiming they would harm transatlantic cooperation on everything from counterterrorism to global trade. American officials similarly balked at the extra protections the EU demanded under the so-called Privacy Shield agreement, which allowed companies to freely move information from Europe to the U.S.
“Complying with GDPR will exact a significant cost,” Ross wrote in an opinion piece in the Financial Times. “GDPR creates serious, unclear legal obligations for both private and public sector entities, including the U.S. government.”
And dont forget tax
Not to be outdone, tax — specifically Europes plan to create new levies for digital companies that generate billions from the region while employing few in the 28-member bloc — is another bone of contention between two regions that are bracing for a potential trade war.
Faced with pressure from France, the Commission recently proposed collecting up to €5 billion in extra taxes from Apple and Google, among others, through a controversial plan targeting revenues that online firms generate within the EU but which currently escape the regions tax net.
Valdis Dombrovskis, the Commissions vice president, summed up the mood when he told reporters: “The amount of profits currently going untaxed is unacceptable.”
Facebook, Google, Amazon and others take a global view. Its probably about time policymakers start to do the same.
In response, Steven Mnuchin, the U.S. treasury secretary, chastised Europes efforts to get its hand on this pot of gold just as Silicon Valley giants repatriated, collectively, hundreds of billions of dollars in overseas cash under the U.S.s recent tax overhaul. “Imposing new and redundant tax burdens would inhibit growth and ultimately harm workers and consumers,” Mnuchin said.
For sure, much of these transatlantic tensions surrounding tech are long-simmering.
But what has changed is the (gradual) awakening — among both policymakers and the general public from London to Los Angeles — that these digital giants, just like the big banks before them, need a global set of rules that can be universally applied, no matter where these companies operate.
An EU-U.S. consensus on what those rules should look like remains a distant hope — one complicated by vastly different views on the governments role in tackling the industry.
Already, Facebook, Google, Amazon and others take a global view. Its about time policymakers started to do the same.
Mark Scott is chief technology correspondent at POLITICO.
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