On March 6, the European Commission is expected to celebrate its onerous implementation of new regulatory restrictions against five large U.S. technology leaders: Alphabet (Google), Amazon, Apple, Meta (Facebook), and Microsoft.
That’s the deadline for these companies, determined to be technology gatekeepers, to comply with voluminous provisions of the Digital Markets Act ostensibly so their services are improved for customers and even competitors. What the European Commission is really up to is a regulatory power and financial grab, which also helps to prop up weaker European companies.
Going forward, the European Commission will still be breathing down the U.S. companies’ necks with the threat of colossal fines (10 percent or more of annual global revenues) and even breaking up the companies.
The European Commission exempted large companies from China (except for ByteDance) and Europe in formulating its regulations. And complaints against the U.S. companies have been largely driven by other tech companies, including many that just have never gotten off the ground or stumbled badly.
As in the U.S., there is no large public outcry in Europe to make Bing a more readily accessible search engine or to shift the order of shopping search results. These are truly first-world problems that any patient person can overcome from the comfort their home.
This raises two fundamental questions:
- How was the European Commission, which enforces legislation of the 27 countries in the European Union, able to pull this off?
- What is next for these businesses and other American tech innovators from a global regulatory standpoint?
Traditionally, the European Union and the U.S. square off to protect companies whose growth and prosperity are central to their respective economic standings. Under President Biden, though, the Federal Trade Commission and the U.S. Department of Justice have been frequently meeting with European Commission regulators since 2021 to discuss how to take down U.S. tech companies.
FTC Chair Lina Khan has also flown overseas to address her European colleagues in Berlin and Barcelona. And on January 31, she and Jonathan Kanter, Assistant Attorney General for the U.S. Department of Justice’s Antitrust Division, spoke at a Brussels conference, “Antitrust, Regulation and the Next World Order.” This posh event, held at a Chinese-owned hotel, was a Who’s Who of European regulators.
March 6 is not the end of attacks against U.S. businesses. Rather, it is just the beginning, as the Rubicon has been crossed. For starters, the European Commission will continue to milk America’s tech companies from the Digital Markets Act while it figures out what more to do.
The willingness of the Biden administration to stand by and aid and abet these efforts, is highly problematic and puts Europeans interests above those of Americans. Indeed, it appears that the European Commission will be more likely to confiscate billions of dollars from U.S. companies before it confiscates any frozen Russian funds.
Meanwhile, other countries want a piece of the action from these and other U.S. companies.
In South Korea, the Korea Fair Trade Commission has made clear it wants to see onerous legislation enacted, like that of the European Union. On February 28, a U.S. Justice Department official met with Commission to discuss these matters.
Unlike Europe, though, South Korea has many globally respected tech titans. This will make it more difficult to single out U.S. companies, though it also could embolden the push for broader legislation, which includes Korean companies, to be introduced in South Korea’s Parliament.
The encouragement that the Biden administration has shown to the European Commission has other negative global ramifications. Other countries now looking at tight regulations include Turkey, Brazil, Saudi Arabia, Australia, and Japan.
A message has been sent that it is open season for other countries to regulate U.S. businesses. Left unchecked, this will have an escalating and dangerous impact to the U.S economy, and for how U.S. companies are treated abroad.
