How Much Of Europe's Regulatory Interest In Silicon Valley Is Just Jealousy Over Successful Foreign Companies?

from the real-or-imagined dept

Wed, May 27th 2015 1:49pm — Mike Masnick

A month ago, the EU brought down the antitrust hammer on Google -- with somewhat suspicious timing. As we noted, the move by EU regulators to claim that Google violated antitrust laws came the very same day that the EU's digital commissioner, Gunther Oettinger announced that the EU should more heavily regulate American internet companies to help European competitors get a leg up against them:

The European Union should regulate Internet platforms in a way that allows a new generation of European operators to overtake the dominant U.S. players, the bloc’s digital czar said, in an unusually blunt assessment of the risks that U.S. Web giants are viewed as posing to the continent’s industrial heartland.

Speaking at a major industrial fair in Hannover, Germany, the EU’s digital commissioner, Gunther Oettinger, said Europe’s online businesses were “dependent on a few non-EU players world-wide” because the region had “missed many opportunities” in the development of online platforms.

Mr. Oettinger spoke of the need to “replace today’s Web search engines, operating systems and social networks” without naming any companies.

And this week, the NY Times has an article about the increasing attention Facebook is getting from European regulators as well. In that case, it's not so much antitrust issues (though, those are raised on the side), but much more focused on data protection/data privacy issues.

To be clear, Facebook doesn't have the best reputation when it comes to handling privacy issues of its users. The company has a history of changing its privacy policies with little notice, sometimes in ways that appear to unilaterally shift the privacy settings on certain information. Frankly, much of this was a result of Facebook needing to shift from what was an almost entirely closed network to one that was much more public and open -- which was a key to the site becoming so successful. Frankly, while some of the criticism is well deserved, and Facebook's bull-in-a-china-shop approach to privacy in its earlier days was pretty startling, of late the company has appeared to be much better about things. And many of the earlier concerns proved to be almost entirely overblown by people misrepresenting things or taking things completely out of context.

That isn't to claim that Facebook is good for user privacy -- but the supposed fears about Facebook and privacy seem overblown. Yes, Facebook is super popular, but it's still a voluntary system that you can choose to use or not. If you really don't like the company, it's not hard to not use it and to block it from tracking you on various other sites. But that won't stop Europe from using fears over privacy as a wedge to attack the company:

Regulators in Europe, however, are especially focused on how the company collects and handles those users’ data. The region has some of the world’s toughest data protection rules, and policy makers from France, Germany and Belgium are investigating whether Facebook broke Europe’s laws after the company announced a new privacy policy this year.

If found to have breached the privacy rules, Facebook may face fines or demands that it change how the company handles people’s data, though the company says it complies with the region’s data protection laws.

Meanwhile, European regulators are also looking to regulate how Facebook's messaging systems work:

Yet lawmakers are now looking into whether Facebook’s messaging services should be regulated like those offered by traditional carriers. And industry executives say that as the social network starts to offer other services like phone calls through the company’s many smartphone applications, Facebook should play by the same rules that now apply to traditional mobile operators.

It will be worth watching closely to see what regulators come up with. It is, of course, entirely possible that these internet companies really are doing bad things that should require regulators to step in. But, to date, there's been a lot of puffed up smoke, rather than any actual fire. And it really seems like the interest from EU regulators has more to do with the fact that these companies are (1) big and successful and (2) American rather than European.

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Filed Under: antitrust, eu, jealousy, policy, privacy, regulation, silicon valley
Companies: facebook, google

33 Comments

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Anonymous Coward, 27 May 2015 @ 1:58pm

The US tries to impose its will via trade agreements, so the EU counters via regulation. These actions have little to do with trade and business, and everything to do with the exercise of power and control.
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David, 27 May 2015 @ 2:59pm

Do they not realize
That there is absolutely nothing preventing them from developing any of their own search engines, SaaS, PaaS, etc? It's just that people really like the ones they are using without regard to national borders?
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That One Guy (profile), 27 May 2015 @ 3:13pm

Why compete when you can just kill the competition?
That takes work though, and requires you to develop and offer a competing service good enough to convince people to switch to it. Much easier to hamstring the competition, then you can offer a crap service that's 'better' simply because it's not being micro-managed to death by idiot bureaucrats.
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John Fenderson (profile), 27 May 2015 @ 3:18pm

I'm not so sure
It seems that often when someone points out wealthy people or companies that use their wealth to abuse other people, someone will come up with a "you're just jealous" retort. The accusation is almost never correct, but is just a way to dodge the actual points being made. As such, I tend to be extremely skeptical of such arguments. And I'm skeptical of it being used here.

And it really seems like the interest from EU regulators has more to do with the fact that these companies are (1) big and successful and (2) American rather than European.

It seems to me that the interest comes from a cultural disconnect. Things that seem right and proper in the US often don't look that way to the European eye, and vice versa. I suspect that this is the major reason for the interest from EU regulators.

They do make specific objections that have nothing to do with jealousy, but have a lot to do with cultural differences. I don't agree with their objections (I am, after all, under the effects of US culture), but that's beside the point. If those objections are dearly held, then the only realistic response the EU can make is to encourage services that operate in a manner more in line with their sensibilities.

I think this is the real reason for the push to develop native services, not jealousy or a NIH syndrome.
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Anonymous Coward, 27 May 2015 @ 3:51pm

Re: I'm not so sure
"have a lot to do with cultural differences."

Shouldn't the search engine's culture be based on those within the country that use it? Google can tailor its search engine to different countries and if there is a cultural divide then Google's organic search algorithms should accommodate that by tailoring EU search results to users within the EU. and if there is such a disconnect then shouldn't a EU business simply start their own search engine and tailor it to the EU culture so that users can voluntarily choose a search engine that better suits them. They have every opportunity, no one is stopping them. Why should the EU government be allowed to dictate culture. EU citizens, based on their usage and how that affects Google's organic search algorithm are perfectly capable of dictating their own culture. Or they can create their own more culturally suitable search engine.
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Anonymous Coward, 27 May 2015 @ 4:42pm

I thought Google was a multinational now? Is the EU's problem with foreign companies in general or only with foreign countries that remove money from their economy and ship it elsewhere?
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Who Cares (profile), 27 May 2015 @ 5:28pm

Re:
Neither. It is just that in the US the only anti-trust spankings by the EU you get to see are the ones against US companies. Doesn't help that those companies tend to get the really big fines due to the revenue they generate in the EU combined with the habit of trying to play the same games they do with the US regulators only to discover that that tends to increase the fine.
But if you look at the total value of the fines separated in EU only businesses and businesses from outside the EU, the amount of EU only fines is still larger then the ones outside ones.
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Anonymous Coward, 27 May 2015 @ 5:45pm

Obligatory 'GOOGLE SHILL!!1!1!'
...oh hell. It's just not funny anymore.
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Gwiz, 27 May 2015 @ 5:48pm

Take the Copia link at bottom of every page to judge Masnicks's objectivity.
Just look at that graphic of corporate sponsors.
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Who Cares (profile), 27 May 2015 @ 5:51pm

About the Google investigation, part of this is for the same thing that the US investigated and let them of with a promise they'd not do it anymore (in 2012 after 2 years of investigating).
The EU doesn't do apologies like that. If the follow up indeed determines that Google abused its market-share in the EU to profit at the expense of other services, then Google will end up paying. And the fine will be more then the profit made due to the abuse.
Seriously what is more of a deterrent against future misbehavior by a corporation? The expectation that if it breaks the law some regulatory agency gives the lawyers working there a stern talking to while allowing the corporation to keep the ill-gotten lucre. Or the knowledge that it has to answer to it's shareholders due to not only having to repay the money made by breaking the law but also having to pay a fine on top of that causing a dent in the bottom line?

And then the Facebook thing. Yes people can opt to not use it.
However Facebook is providing services in the EU so it has to follow EU law. It can op to not follow EU law by not providing services there.
If Facebook keeps insisting on using privacy protections based on US law for people in the EU it will keep running into lawsuits and investigations about it breaking EU law until it changes it's behavior or leaves.
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Anonymous Coward, 27 May 2015 @ 6:09pm

Re:
Are you fucking serious, out_of_the_blue? You're resorting to using names of people that already have accounts?

Wow, what a dumb cunt.
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Anonymous Coward, 27 May 2015 @ 6:12pm

Considering the larger amount of information Facebook collects from it's users, and the much larger risk of anti-competitive practices thanks to it's walled garden and current expansion, at the very least Facebook makes more sense for EU regulators to be concerned about than Google.
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tqk (profile), 27 May 2015 @ 6:18pm

Re:
The EU has laws in place that mandate user data privacy, which US corps don't have to care about or abide by, until the EU enforces it like now. I like the way EU protects user privacy. I don't like the way the EU attacks US corps just because they're US corps or big. Why can't EU corps compete?

I haven't used Google in years, never have used Twitter, and won't use Facebook. I use their competitors all the time, things they appear loath to admit even exist.

We need to shoot more politicians, I think, both the EU and US. I didn't write assassinate. I wrote shoot. They all need a wakeup call, and they all ought to be thinking much harder. We're letting far too many useless people reach adulthood. The Spartans got it right: throw the deformed idiots off the cliff at birth and don't let them grow up and pollute the gene pool.
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tqk (profile), 27 May 2015 @ 6:23pm

Re: Do they not realize
There *are* other search engines already! The users insist on using Google anyway! What can be done about this?!?

How about shut up and stop blaming your problems on others?
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tqk (profile), 27 May 2015 @ 6:54pm

Re: I'm not so sure
They do make specific objections that have nothing to do with jealousy, but have a lot to do with cultural differences.

You're being far too generous. Europeans have no trouble with using Google as their go to search engine. European politicos have a lot of problems with Google being Europeans' go to search engine.

Europeans en mass may be more culturally sophisticated wrt us (debatable), but their politicos are no better than our politicos. The latter are just doing what their nature tells them they can get away with. They're the problem, just as our politicos are our problem so very often.

Why Europeans aren't telling their politicos to shut up about this may be a cultural problem they might like to consider. Why're EU politicos so hell bent on attacking SillyValley corps when EU users love SillyValley, hmm? There seems to be a bit of a disconnect there between the two.

Laissez nous faire?
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tqk (profile), 27 May 2015 @ 7:20pm

Re:
Methinks Apple's walled garden is a far greater problem wrt individual privacy than Facebook's (mis)management of individual privacy, but everybody *loves iBaubles*, so can't go after Apple. FB's next on the list, along with Google.

Can't be seen to be attacking the cult of Jobs! Google's fair game though.
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Lawrence D’Oliveiro, 27 May 2015 @ 8:33pm

On The Other Hand ...
... they seem to have a more enlightened approach to net neutrality.

Swings and roundabouts, I guess...
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Steve (profile), 27 May 2015 @ 10:12pm

Not everyone is as desiring of fame as your average American. Some folk in other countries prefer not to bare all for the world to see.
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Anonymous Coward, 28 May 2015 @ 1:10am

Re: Re: I'm not so sure
A lot of people assumes that competition is automatic in a "free" market. That is not so. As soon as a market is settled, it is very difficult to move the market.

People do not have perfect information!

EU or the countries within will not be making new search engines. That is for private companies to do. And they actually do exist, even if nobody has heard of them!

There are two politicians involved here, namely sir Oettinger and miss Vestager. Sir Oettinger is very much the definition of why people dislike the current system for appointing commissioners, while Vestager came from a vice prime minister position and is somewhat competent.

Oettinger is spouting pure nonsense as soon as he opens his mouth. Vestager is a lot better rhetorically acceptable and actually cares about some of the issues she is looking at. She has a ridiculous case of having to look into her boss and his tax schemes and there she is horribly defensive and seems to favour keeping her job over justice. On most other issues she is pretty strict.

Gazprom is getting investigated for abusing their position but tries to sneak out of it by claiming they aren't subject to competition law since Kremlin owns them and russian politicians claim it is political prosecution... She is slowly starting on the cases against the music industry on geoblocking even if media (several of them use some of the same mechanics!) dislike covering it.
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Anonymous Coward, 28 May 2015 @ 1:32am

Re:
Laws my friend.

It is a knifes edge to not want ISDS, but allowing companies to ignore the laws outside their homecountry if they uphold the domestic laws.

If you followed the case, you would know that US competition authority gave some strong words to Google after finding their behaviour unacceptable and likely illegal. EU competition authority mostly seems to want to prosecute on mostly the same grounds.

As for Oettinger: He is a shameful example of why the political structure behind the commission is so hated: It allows a politician with no knowledge in a field and no interest in listening to anyone but the highest shouting (or maybe even bidding?) lobbyists into a position of veto-power.
Please ignore him. And don't conflate him with Vestager as Mike unfortunately seems to do here.
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DannyB (profile), 28 May 2015 @ 6:12am

Re: I'm not so sure
I don't buy the cultural differences excuse for the EU's behavior regarding Google and other American companies.

If there were such a cultural difference in how EU citizens viewed an index, a database of links, they could create their own. The citizens could use one of the alternatives. The market would favor someone who 'tuned the facts' to match the EU's expectations, if that were possible.

I think the word 'jealousy' is not quite the correct word. I think it is more an envy of Google's power rather than Google's success. The fact that Google can and has effectively told various news dinosaurs to shove off. Google has given them their wish by cutting them off, and they they cry Waaaaaaah! (sniff) Waaaaaaaaaaaah!

I think this and similar past events is what they are upset about.
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DannyB (profile), 28 May 2015 @ 6:15am

Re: Re:
Impersonating actual user accounts would seem to be sufficient cause for a permanent ban. This crosses way beyond the line of expressing an opinion. Just because nobody wants to hear ridiculous spews that have been repeatedly rebutted doesn't mean you can resort to any kind of obnoxious means to keep trying to put them in people's face.
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Mason Wheeler (profile), 28 May 2015 @ 8:01am

Yes, Facebook is super popular, but it's still a voluntary system that you can choose to use or not. If you really don't like the company, it's not hard to not use it and to block it from tracking you on various other sites.

Really? I know it's been a couple years, but have we forgotten about their system of shadow profiles already?
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Gwiz (profile), 28 May 2015 @ 8:33am

Re: Re:
Are you fucking serious, out_of_the_blue? You're resorting to using names of people that already have accounts?

I'm actually a bit flattered that Blue would choose my moniker in his feeble attempt to make his comments appear more reasoned and intelligent then they really are.

Since most everyone can spot Blue's writing style and obvious biases regardless of what moniker he uses, it's no skin off of my back.
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TruthHurts (profile), 28 May 2015 @ 9:51am

European Union run by a bunch of mucousa munching morons.
Google has no control over how popular their search engine is.
Google has no control over which web-sites choose to use Google's advertisement engine.
Google has NO MONOPOLY whatsoever in anything.

Google has the largest percentage of search users because THE PEOPLE CHOSE TO USE GOOGLE the majority of the time.

Google has the highest number of websites using their advertisement engine because THE PEOPLE CHOSE TO USE GOOGLE the majority of the time.

EU Officials wake up, open your eyes and understand this plain and simple fact.

Your people CHOSE TO USE GOOGLE the majority of the time.

That is why they have the highest search and advertisement engine usage.

Get your heads out of your behinds and shape up.

If you need help with your head from behind removal, please let us know, we'd be happy to help.
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Anonymous Coward, 28 May 2015 @ 2:23pm

Re: European Union run by a bunch of mucousa munching morons.
And how do people learn about search engines? People do not have perfect information. I would even bet that most people cannot name another search engine. Having as much market share as Google has is a technical monopoly even if the market is free...

Oettinger is a shameful pseudopolitician few in Europe likes. He is sadly chosen by frau Merkel and will pollute the digital agenda with his rabid lobbyist songs. But this case has nothing to do with him. Mentioning him in this context is guilt by association.
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John Fenderson (profile), 28 May 2015 @ 2:56pm

Re: Re: European Union run by a bunch of mucousa munching morons.
"I would even bet that most people cannot name another search engine."

I would bet that most people could at least name Bing. Although Bing is a substantially inferior search engine to Google, it is an alternative.
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DigDug, 28 May 2015 @ 8:00pm

Re: Re: European Union run by a bunch of mucousa munching morons.
Ahh, but there are no laws against a people choosing to use one company over another.

Monopolistic practices can only be considered monopolistic if there are no other choices available.

With the veritable plethora of choices available, the landscape does not exist where Google can be said to have a monopoly.
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tqk (profile), 28 May 2015 @ 9:27pm

Re: Re: Re: European Union run by a bunch of mucousa munching morons.
I'm convinced this's just potential advertisers annoyed that they have to pay top dollar to Google because G. produces the best results for their money and it wouldn't have gone as far if they'd have gone with G.'s competitors. In other words cheap, penny pinching idiots who think they shouldn't have to pay so much for what G. can do for them. Welcome to capitalism, idiots.

Instead, they run to politicos who'll whore themselves with our legal system to fix it for them. G. should raise their prices for having to put up with their whining, not to mention having to pay lawyers to try to educate the idiots and politicos attacking them.
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PT (profile), 28 May 2015 @ 11:00pm

Re:
Right, it's about trade and business (and taxes, of course). The US is no paragon in that area. The problem is that Europe doesn't have the kind of business environment in which a company like Google or Facebook could be formed and grow the way it can in the US. There's a reason America is full of expatriate European entrepreneurs.
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Anonymous Coward, 29 May 2015 @ 2:37am

Re: Re: Re: European Union run by a bunch of mucousa munching morons.
Your definition of monopolistic practices is not what is applied in competition law. Thus the confusion.

I would actually still argue that your definition in the long term will reduce competition since monopolistic actions like buying up competitors and grey area towards black area actions against smaller companies are easier if you have the money to orchestrate it.

Most of what is considered in EUs competition department is cartel price-fixing cases. In very strongly dominated markets, you get similar problems as in price forcing without that cartel to clamp down on. I wouldn't disagree that it is partially an ideological/cultural difference, though.

In US the people making lots of money are hailed as heroes and they have a good image in court, while in ie. Denmark a disproportional amount of them are in or have been in jail for forging signatures, funnelling bribes or garden variety fraud. The difference is not that much in the laws.
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steve white, 29 May 2015 @ 2:37pm

Jealously
Jealously? has techdirt been asleep for the past 2 years and not noticed all the data protection issues? should you back up your headline rather then jsut ask a question in it.
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TGIF007 (profile), 31 May 2015 @ 10:47am

Re: Why compete when you can just kill the competition?
A variation of the American strategy of buying the competition and then killing them.

The European way saves the expense of having to buy your victim, but adds extra paperwork and red tape to the process. (Then again, don't European regulators LIKE paperwork and red tape?)
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