Europe’s Quest to Fix the Internet

A technician passes by a Google logo during the opening day of the search company’s new Berlin office on January 22, 2019. Photo: Tobias Schwarz/AFP via Getty Images

BERLIN — Last month Dita Charanzová, a vice-president of the European Union Parliament, said that new plans to regulate technology companies were so ambitious they could create a separate “European internet.” She claimed that, like the government in Beijing, politicians in Brussels may end up creating an entirely different online experience on the continent. While recognizing that the intentions are different — instead of wanting to censor information, European leaders want to protect users — she worried that the outcomes might be comparable. She wrote, “We live in a world where there are two internets: there is the Chinese and there is everyone else. The answer is not artificially to create a third.”

But for Europe’s proponents of muscular internet regulation, the goal is not to Balkanize the internet — it is precisely the opposite. They hope that the new drive to rein in big tech, which began in Europe in earnest in December and should take a couple of years, will persuade others to follow their lead, and that serious efforts to limit the use of data, and to force gargantuan companies to behave fairly, could make waves that reach across the Atlantic and around the world.

“If we get it right, I would expect that other countries take inspiration. At first glance, this may seem like a radical stance against big tech, but I like to think of it as the beginning of a trend,” said Agustin Reyna, director of economic and legal affairs at BEUC, Europe’s consumer-rights organization. “These companies have too much power and are misusing it. They dictate how users engage in the digital world,” he told me. We are forced to interact with misleading interfaces designed to get us to behave in the way that big tech wants, he said. “Increasingly, there is agreement that this needs to change.”

The two proposals announced by the European Commission, the Digital Markets Act and the Digital Services Act, aim to create new rules for the entire E.U. with a wide range of objectives. At the upper limit of what is possible, they could seriously change the way that Silicon Valley titans do business in Europe. New laws could stop social media platforms and online marketplaces from extracting user data and then using it for their competitive advantage — part of the core business model for several companies. Instead, they could be forced to share data with other market players as well as public researchers. Companies could be barred from ranking their own products favorably in search results, making it difficult to switch between services, or from giving their own products special treatment in marketplaces or on operating systems. And it is even possible that the European Union could break giants like Google, Apple, Facebook, Amazon, and Microsoft (the so-called GAFAM) into little pieces, at least in this part of the world.

Authorities want to “set a high global benchmark by defining clear responsibilities and accountability for global platforms” a representative from the European Commission said via email. They claim the legislation “will protect users and their fundamental rights, rebalancing the responsibilities of users, platforms, and public authorities according to European values.”

For many experts, the concern is not that Brussels will be overzealous, but rather that, over the next few years, an incredibly sophisticated American lobbying operation will succeed — with the assistance of the U.S. government itself — in watering down the proposals until they are insufficient to the problem at hand. LobbyControl, a nonprofit transparency-advocacy group based in Germany, is trying to keep up with the array of operations seeking to influence the outcome. Campaigner Max Bank says that in addition to the tens of millions of euros it spends on transparent efforts, big tech funds apparently neutral think tanks that engage in “undercover lobbying.”

“Increasingly, the power of big tech is an issue for democracy itself and for power relations in society. We see it as a question of who is regulating whom,” Bank said, adding that in cities like Brussels and Berlin, he is glad that there is not — yet — the kind of revolving-door culture that exists in the U.S., where people leave jobs in government regulation to go work for big tech and vice versa. Among experts in Europe, the conventional wisdom is that the Democratic Party in the United States is deeply allied with Silicon Valley, and they are watching carefully as President Biden forms his Cabinet. Proponents of regulation have been encouraged by the appointments of Tim Wu and Lina Khan, but they still believe that Washington will pressure Brussels in favor of big tech. “I expect this to become a trade issue between the U.S. and the E.U.,” said Bank from LobbyControl.

Currently, the most important piece of European tech legislation is the General Data Protection Regulation (GDPR), which passed in 2016. It has been difficult to implement, and one of its founders says it already needs an update. European authorities have recently used already-existing legislation to crack down on Silicon Valley titans. For the first time, the E.U. is charging Apple with antitrust abuse, specifically for the way that it uses its App Store. In France, the government is using an E.U.-wide copyright reform to force Google to pay media outlets for the snippets of content it uses, and other countries may follow suit. And though the cases are slightly different, E.U. authorities were certainly paying attention when, last month, Facebook banned all news on its platform during a regulation battle with the Australian government. But the new proposals seek to be proactive, rather than reactive, with institutions now part of everyday life.

“The case in Australia gives you an idea of the power that these companies have,” said Tommaso Valletti, a professor of economics at Imperial College London and former chief competition economist for the European Commission. “But their approach doesn’t tackle the fundamental issue of market power.”

Valletti noted that the last time major antitrust action was taken in the tech sector — against Microsoft in 1998 — it led to a period of renewed innovation, including by players such as Google and Facebook. But in the past ten years, those new companies have largely used market dominance to accumulate enormous power and foster addiction rather than offer new services. “The GAFAM companies have a combined market capitalization of $8 trillion. That is as large as a mid-size European country,” he said. “Tech platforms have become bottlenecks to the way we socially interact, to the way we shop, to the way we search for information. We need to do what we already did, as a society, with banks, electricity, telecommunications. Once you become an essential utility in our lives, regulation is the way forward.”

Europe’s Quest to Fix the Internet