The European Union Wants to Control the Internet – and You

Will the future of your online experience be controlled by some random overseas bureaucrats that you would never and could never elect? If the European Union has its way, it may very well be the case. If not, they may fragment the international nature of the internet as we know it.

The E.U. is currently engaged in an all-out, all-fronts policy war against foreign technology companies.
On the legislative level, the trade bloc’s recently-instituted General Data Protection Regulation (G.D.P.R.) attempted to curb the perceived excesses of online platforms’ data usage by giving European users more controls over their data and recourse over data violations.

In October (2018), the E.U. Parliament approved a revised version of the E.U. Copyright Directive, which will require websites to proactively sniff out and remove intellectual property violations on their platforms (the “upload filter”), and require platforms to pay for licenses to share certain content online (the “link tax”). The measure is expected to be passed by the Parliament in 2019, after which points member state governments would get to work crafting their specific rules.

There have been many administrative volleys, too. The European Commission, spearheaded by European Commissioner for Competition Margrethe Vestager, has delivered blow after antitrust blow on U.S. technology companies, slapping record-breaking fines of billions of dollars on Apple, Google (twice), and now possibly Amazon for their purported threats to a competitive environment. Similar cases are still pending.

The negative effects of these policies and decisions on European consumers are fairly straightforward. In the case of the GDPR, the rules have served to benefit market titans like Facebook and Google in Europe while limiting choices for E.U. residents. Many Europeans now find that they cannot access foreign news and services because of GDPR liability risk.

Although many of the antitrust cases are still underway, they could have the effect of limiting foreign commerce in the E.U. market and raising prices. And if passed in its current form, the upgraded Copyright Directive is expected to generally benefit the big guys, because they have the pockets to shell out for copyright licenses. Meanwhile, free communications and collaboration on these platforms will be quashed since content will have to be pre-checked for compliance before companies will want to allow anything to be posted.

Many non-European denizens of the internet have not yet internalized how much these recent E.U. moves threaten their own online experiences without the option for petition or recourse. Some people joked about the flood of G.D.P.R. compliance emails that temporarily annoyed us when the E.U. rules were rolled out in May (2018). But taken together, this E.U. onslaught against foreign technology companies is really a gambit to either separate the European internet experience from the standards of the rest of the world, or effectively dictate internet policy for much of the world.

E.U. leaders do not mince words about their antipathy to the largely foreign-driven internet ecosystem. Former E.U. parliament president Martin Schulz likened modern technological innovation to a “wrecking ball” that cannot be countenanced by E.U. bureaucrats. His successor Antonio Tajani rejected the option of “accepting that digital transformation”, and maintains that his institutions should be “managing it” instead. Vestager often strikes populist tones, speaking of “taking democracy back” and appealing to people’s feelings of “being cheated” and having a lack of control.

There are many ways to characterize modern E.U. technology policy, but “democratic” is not the word one would choose. Rather, it is technocratic, and it belies a worldview that Brussels knows what is best for everyone from Latvia to Spain and indeed the world.

To remain absolutely compliant with the European trade bloc, technology companies are faced with the choice of either building out separate systems for separate municipalities or just applying the stringent European policies on much of the world. Americans are familiar with this phenomenon, like when rules from high-regulation states like New York or California are merely applied on the nation as a whole even though other states might not desire them.

Usually things are a little different internationally, but the inter-connected nature of the internet makes this situation a bit trickier. The vague wording of E.U. rules does not help matters. Plus, obfuscating technologies like virtual private networks (VPNs) make it harder for technology companies to know where users are actually located. Rather than face the wrath of the E.U., online platforms may just grumble and pass E.U.-compliant policies across-the-board.

This situation is even more pronounced in the case of administrative actions like the antitrust cases against Google’s comparison shopping and Android products. As the Wall Street Journal pointed out, the EU’s administrative law culture is far more internationally-interventionist than the US because it empowers regulators to “issue punishments and order remedies before any judicial review”. So it is much procedurally easier for Vestager to act as international internet sheriff, and she has put on this ten-gallon hat with gusto.

There is certainly an element of economic self-interest here. The vast majority of major technology firms are not headquartered in E.U. nations. When you strip away the dramatic rhetoric, these policies amount to little more than a covert trade war against technologically-superior competitors. This is not a new insight – former President Obama was chastising E.U. investigations as “commercially driven” revenge policies by countries that “can’t compete with us” back in 2015.

But there is a deeper cultural divide as well. Indeed, journalist Adam Thierer has long argued that it is precisely the European aversion to risk-taking and failure that has set it so far technologically back in the first place. And in contrast to the American posture of largely allowing intervention and tapping agencies like the Federal Trade Commission to monitor and only intervene after investigations show harm to consumers, the E.U. proactively punishes companies on the suspicion of harming a nebulous “competitive environment”. What a setup: issue policies that put yourself at a competitive disadvantage, and then punish competitive foreign companies that outstrip you in response!

Now, the E.U. has every right to pass policies that it thinks are in the best interest of its subjects. And it’s easy to sympathize with their stated goals: many people share concerns about data security, platform policies, and anti-competitive or illegal activities. But it is absolutely not “democratic” to use those concerns as a pretext to effectively dictate the future of the internet. Nor are those policies likely to have much of an effect beyond, ironically, consolidating the market dominance of current titans.

There are ways that the E.U. could use its position to elicit more transparency and accountability from technology companies, but it sadly appears that Europe is more interested in control than results.

yogaesoteric
March 1, 2019