EU Moves to Curb Market Power of Big Tech

Posted on October 12, 2020 by Paul Thurrott in Amazon, Apple, Cloud, Google, Social with 16 Comments

A new report says that European Union regulators have drawn up a “hit list” of the 20 biggest tech companies whose market power it will curb.

The plan, first reported by The Financial Times, targets the 20 biggest Internet-related firms in the world, and includes at least Amazon, Apple, Facebook, and Google. It will require these firms to operate under much more stringent regulations than smaller competitors, including “new rules that will force them to share data with rivals and an obligation to be more transparent on how they gather information.”

“The immense market power of these platforms is not good for competition,” one of the multiple sources cited by the report said.

“The internet as we know it is being destroyed,” another source noted. “Big platforms are invasive, they pay little tax and they destroy competition. This is not the internet we wanted.”

Apparently, the list isn’t yet final, but it will be determined by market share, revenues, number of users, and other criteria. It’s designed to overcome the biggest problem with today’s antitrust enforcement, which typically amounts to fines that, for these tech giants, are so small they’re just considered “the cost of doing business.” And business change requirements, when they do occur, are so slow that they’re ineffectual. The goal is now to move quickly.

And regulators aren’t against structure remedies, which would require Big Tech firms to break up into multiple companies if they wish to continue doing business in the EU.

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Comments (16)

16 responses to “EU Moves to Curb Market Power of Big Tech”

  1. Avatar

    proftheory

    Next they'll be calling for the US to be broken up because it is too much of a global power. And yes California, Oregon, and Washington would also need to be subdivided. They have been too Monarchy (Mommy state) dominated for way too long.

  2. Avatar

    scovious

    It would be amusing if stopping business in the EU was more economically preferable than breaking up US Tech companies. China would block them anyway because of censorship, and EU would block them because they are too homogenized. The US Tech companies could still operate across both American continents, Australia, most of Asia, and also Africa. But since they are under the gun locally for monopolistic practices, I wouldn't hold my breath. Change is coming.

    • Avatar

      bkkcanuck

      In reply to scovious:

      The EU is just too big a market to ignore. It would be like a company saying they would pull out of the US market. Being big should not be the issue, it should be based on tightening anti-competitive behaviour market-wide (big and small), and tightening regulations on social media on how they use your data and to prevent the algorhythms from effectively radicalizing people based on feeding them garbage based on earlier searches. If someone searchs something out - that is one thing, but they have to find a way to stop the feedback loop where they effectively harm society to make a profit. They could also mandate social media platforms have an open industry standard API (which has to be the same one used to access internal platforms - so that you don't have a closed API and a public API) that effectively busts open the closed platform and makes sure that social platforms and chat interoperate so that you reduce the network effect (and require data accessed through the API not be used for anything but connectivity - continuing EUs push on privacy).

    • Avatar

      drb1979

      In reply to scovious:

      If anything Australia and various Asian countries would join with the EU efforts on this.....better for them and better for the EU...these countries are not happy about the lack of tax the tech giants pay, increased competition too would be helpful but Gov's the world over are looking at Big Tech and their taxes...

    • Avatar

      wright_is

      In reply to scovious:

      The US Government is the US Big Tech's biggest enemy. They had 5 years to implement Privacy Shield properly, but they received non-compliance notices in 2016, 2017, 2018, 2019 and 2020, before the Schrems II case declared Privacy Shield null and void, because the US hadn't implemented any of the provisions they had promised in 2015, after Safe Harbour was declared null and void. So we have over a decade of US government in-action leading to cloud services with any presence in the USA being untenable.

      Specifically:

      • they failed to install a permanent ombudsman to deal with GDPR issues
      • they failed to rescind the Patriot Act, or exempt EU data from its overreach
      • they failed to rescind the FISA Courts, or exempt EU data from its overreach
      • they failed to rescind National Security Letter, or exempt EU data from its overreach
      • they actually implemented the CLOUD Act, which extended US judicial overreach

      So, instead of making it easier for US companies to compete in Europe, they have made it harder.

      Add to this the fact that Big Tech seems to think that they are above the law - "hey, we are a Silicon Valley company, we don't have to follow your stinking laws, when we do business in your country!"

      I'm sure it works both ways. I'm sure, if a 16 year old German came to the US and ordered a beer in a bar, he would be served, because he is German and US laws don't apply to him!

      Big Tech has run roughshod over the whole industry for nearly 2 decades, so it is little wonder that people are getting pissed off with it.

      Also, parts of Asia have also had enough, South Korea is also investigating the practices of Big Tech, for example. Japan as well.

      Heck, you just have to look at the list of countries that can store and process EU data, Uruguay is on the list, but the USA isn't? That should tell you something about how the US is treating data.

      Also, for example, Facebook and Google were allegedly caught with political advertising coming from outside the parties involved. In most European countries, there are very tight laws on political advertising. It can only come directly from the parties involved and there are strict time limits (usually the last couple of months before an election, I believe in France the rules are even tighter, with no advertising allowed in the week before the election?) and monetary limits. The parties have to lay their budgets open for scrutiny and there is a strict upper limit on spending, I believe Germany was around 30 - 50 million Euros for a national election, communal elections are only 5 digits. Facebook and Google, on the other hand were accepting political adverts from outside the country where the election was taking place (illegal), over time periods that were prohibited and the adverts weren't funded by the parties involved (illegal).


      • Avatar

        Greg Green

        In reply to wright_is:

        This just demonstrates governments shouldn’t expect other government to enforce laws that aren’t their own. If an 18 year old US person goes to Germany and orders a beer, should they refuse him because he’s under US age? Of course not.


        On the other hand if he’s wanted for a crime in the US, then the procedure is extradition, not expecting Germany to enforce US laws.


        Otherwise I agree that the tech companies are far too big, but they also influence far too many government members. But that brings the problem back to governments, not tech companies. Until government members are smarter than tech company lawyers we’ll always have this problem. It’s why the courts are probably where most of this will be resolved. Tech company lawyers fighting each other without issues being dumbed down for government representatives.

    • Avatar

      nbplopes

      In reply to scovious:


      Yes it would. Australia? EU is trying todo what is right. The way this is going today is towards a quite dystopian future were about 10 companies run the show, socially engineering their way through while democratic structures remain incapable of dealing with them in the midst of their indecisions.

  3. Avatar

    Sam Knight

    The way the Internet has evolved (devolved?) in the last 15 years is pretty scary. I remember the excitement of discovering new sites (web rings, Geocities, etc) that all looked and behaved differently. Progress is a great thing, but the monoculture of Facebook and every other site being a Wordpress site isn't, and don't even get me started on the tracking that happens with every site embedding Facebook and Twitter logos to share content.


    It's a real shame that Microsoft has all but abandoned the consumer market. I'd love to see them bring back MSN/WLM Messenger, Windows Live Spaces, Groups and all the other old services.

  4. Avatar

    wright_is

    In reply to karlinhigh:

    Probably something along the lines of the Gaia-X initiative for cloud services (open source API, so anybody can provide services and you can move between services at will - or distribute your architecture across multiple providers for added redundancy).

    WhatsApp looked like being "the" messaging service, but it is not GDPR compliant, so can't be used on business devices and personal use could also cause problems, if a contact objects.

    We use Threema, Signal and Telegram.

    I've never understood, if you don't trust the government, how can you trust a big corporation, which has even less scruples and is actually out to get you?

  5. Avatar

    wright_is

    In reply to karlinhigh:

    Gaia-X is an EU initiative, supported by some big EU names (E.g. Atos, Deutsche Telekom, OVHCloud, BMW, Bosch, SAP). It will be a cloud system like AWS, but run by dozens of different companies, you select which company you want to host what part of your operation, you can transfer a service from provider to provider on the fly (or have it mirrored on a different provider for redundancy) and it will be 100% hosted in Europe by European companies, compliant to EU law.

    As to the GDPR issue with contacts, that is the problem with WhatsApp, it uploads all your contacts' details to the Facebook servers, which is not GDPR compliant (you didn't get the permission to do so from the individuals and it isn't hosted in Europe). Signal, Threema and Telegram get around that, they never upload you contact lists. Signal, for example, uploads a one-time hash of each contact and sees if there are any matches to existing users, if they are, you are notified of those contacts and vice versa. But the contact list isn't stored on their servers.

    There are various other ways that would also be compliant.

  6. Avatar

    melinau

    This has various facets and is about a bit more than simply "competition". Ignoring issues of avoiding taxation in jurisdictions from which they make huge profit, Big Tech also suffers a huge 'democratic deficit'.

    The consequence of this is that Big Tech follows a variety of often implicit political agendas in how it deals with Nations & with individuals. Most of Big Tech is controlled by individuals who subscribe to what may loosely be described as a neo-liberal andor "Libertarian" view of the world.

    We are supposed to have some degree of democratic control over our Governments whereas we have zero control over Google &c. except that which can be attempted by elected representatives in Government. It seems logical, given the Economic & "Social" power of Big Tech that we should want to have some role in determining how they use their power.

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