Tech

To take on Big Tech, US can learn antitrust lessons from Europe

Make it personal. Use every rule in the book. Dont focus on fines.

Those are the lessons from Europes long-running antitrust battle with many of the worlds largest tech companies — a playbook for U.S. officials as Washington restarts its own investigations into the likes of Google, Amazon and Facebook.

Since 2016, the European Union and individual EU countries have levied more than €20 billion in fines and other financial penalties against Silicon Valley for competition, antitrust and state-aid abuses.

Apple was hit over its tax dealings in Ireland. Google faced three rounds of charges against its global online empire. Facebook was judged to have unfairly used peoples data. Investigations are also underway into Apple and Amazon. The companies deny any wrongdoing.

This backlog of cases and decisions has made Brussels, not Washington, the testing ground for how to bring antitrust charges against Big Tech, a role that Europe has cultivated as part of its wider effort to become the worlds policeman for the digital world (outside of China).

It also has sharpened Europes officials to what does, and does not, work to curb the power of a small stable of tech firms whose dominance over large parts of the digital economy is outpacing authorities ability to keep up.

“We need to address the power of digital platforms” — Margrethe Vestager

That includes the failure of blockbuster fines — often worth billions of euros — to keep well-capitalized companies in check because many can easily shrug off these hefty levies with little, if any, shareholder pushback. While some European politicians have repeatedly called to break up tech giants, neither the Commission nor national governments have ever gone that far in their competition cases.

In response, EU competition officials like Margrethe Vestager, the blocs antitrust chief, have looked to personalize often complicated cases to woo consumers increasingly wary of Big Tech. Theyve also rejiggered the legal landscape to give regulators greater leeway in how they take on tech firms that often straddle multiple industries — blending existing competition rules with other consumer and privacy protections.

“Theres no doubt Europe has led the way,” said Ioannis Lianos, the newly nominated head of the Greek Competition Authority, before he took over his new role. “Theres now a lot of pressure in the U.S. to act.”

U.S. and European officials regularly meet to share ideas, with Vestager traveling to the U.S. earlier this year, and her American counterparts similarly visiting Brussels in 2019. Yet neither side has any formal cooperation mechanisms in place to share documents or findings on completed or ongoing investigations into tech firms, according to officials with knowledge of the matter.

Despite Europe offering a precooked recipe for American authorities — the U.S. Department of Justice, Federal Trade Commission and a number of state attorneys general have opened, or are mulling, several antitrust tech investigations — merely transferring what worked in Brussels to Washington is not a slam dunk.

In the EU, the European Commission acts as both judge and jury, investigating and then deciding on potential wrongdoing (companies only then can appeal to the blocs highest court). By contrast, U.S. regulators must put their claims before independent judges, who have so far taken a more lenient view toward dominant companies.

“There are core institutional differences that imply the results will be different,” said Marianela López-Galdos, global competition counsel at the Computer & Communications Industry Association, a Washington DC-based trade body whose members include Facebook and Google.

She who dares, wins

Despite these differences, one thing is clear: When bringing antitrust charges against Big Tech, it pays to make it personal.

No regulator has done that more than Vestager, Europes current competition commissioner. She has become the regions poster child for pushing back against Big Tech — and has connected with average citizens through selfies at press conferences, high-profile interviews and other tactics to win support for often complicated cases.

Vestager invited a television crew from Vice, the hipster U.S. news channel, to trail her as she made her first antitrust decision against a U.S. tech company. She also has been repeatedly named as one of the worlds most influential people by Time magazine, portraying herself as an avid knitter with a middle-finger statue in her office to show off her steeliness.

“We need to address the power of digital platforms,” the Danish politician told an audience in Paris earlier this year during a speech in which she referenced Leonard Cohen, the Canadian singer-songwriter. “Its especially important that we protect the opportunities for competition that do still exist.”

Vestagers term ends on October 31, but she is tipped for another high-profile job — which could but has not been confirmed to include responsibility for competition — in the new Commission due to take over on November 1.

Margrethe Vestager, the European commissioner for competition | John Thys/AFP via Getty Images

When she took over the competition portfolio in Brussels in late 2014, several landmark competition cases, most notably against Google and Gazprom, the Russian oil giant, had stalled after years of cut-throat lobbying aimed at her predecessor, Joaquín Almunia.

Yet in just over two years, Vestager had slapped the search giant with a €2.42 billion fine linked to abuses in some of its search services (the company is appealing). Soon afterward, she opened two separate investigations, and subsequently issued record financial penalties against Google, while pushing back against others like Apple, Amazon and Facebook for other abuses.

Her overtly public standoffs with Big Tech have won her both plaudits and rebukes from U.S. officials, including Donald Trump. Vestager has parlayed her regulatory actions into a prominent global role within policymaker circles over how much control tech companies should have over everyday life.

U.S. politicians like Elizabeth Warren and, ironically, Donald Trump — both of whom have called for antitrust investigations into Big Tech — have followed her playbook in personalizing their fight against Silicon Valley to win over hardcore supporters.

“Vestager was the beginning of the techlash,” said a senior U.S. tech executive, whose company has had repeated dealings with both U.S. and European competition authorities. He spoke on the condition of anonymity because of ongoing regulatory cases on both sides of the Atlantic. “The U.S. is poised to follow Europes and Vestagers lead.”

New era of data antitrust

Others in Europe are taking a more drastic approach — pushing the boundaries of antitrust by revamping competition rules for the 21st century.

With most of existing legislation created well before smartphones, social media companies and e-commerce giants even existed, regulators are applying existing rules in new ways to investigate companies that span everything from digital apps and Instagram feeds to online shopping and mobile search.

Thats particularly true within EU member states, where national competition authorities have often been in the vanguard of pushing what constitutes anti-competitive behavior and what changes in corporate activity are necessary to protect consumers.

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