By the Blouin News Technology staff

Europe chills towards big web companies

by in Enterprise Tech.

Getty Images

Getty Images

Google has been embroiled in legal debacles in Europe for years. Indeed, the company has on-and-off again been the subject of the European Commission’s investigations, largely for antitrust matters. But Google’s problems in Europe have now become more of a symbol for the continent’s dealings with American technology companies, large and small. Europe has upped its regulation, probes, and investigations into firms hailing from Silicon Valley — practices that increased following the Snowden leaks of 2013. Google, in particular, has adopted various tactics to try to ameliorate its standing in Europe, where, according to recent research, internet companies are unfairly getting hit with unneeded regulation.

Eric Schmidt, Chairman of Google’s parent company Alphabet, recently stated that European law is biased against large companies. Business Insider quotes him as commenting on antitrust issues: “Obviously, it’s a concern. But now that the Europeans are focused on all the American companies, it’s a little easier. European law is biased against large companies. There’s a commissioner in Europe who launched a study  —  he listed 32 companies, 31 of which were American.”

Schmidt has also vocalized his concerns with the European Court of Justice’s decision to revoke the Safe Harbor provision — a move implemented in 2000 that allowed U.S. tech companies to use a single standard for consumer privacy and data storage on both continents without having to abide by multiple countries’ sets of regulations. The court’s decision earlier this month leaves tech companies in a legal mire, and the regulatory processes for the transatlantic transfer of data are now in limbo.

But in a seeming attempt to play nice despite the E.U.’s various crackdowns, Google has upped its volume of money poured into European lawmaking, using its lobbying power to perhaps try to ease tensions around its business practices on the continent. CNN reported last month that Google levied about $4.5 million at E.U. policy making in 2014 — a threefold increase over its 2013 spending in Brussels.

Regardless of whether European law is truly biased against large American companies, it’s hard to ignore the uptick in regulation alongside the boom in internet-based businesses. As with any new technologies, governments wrestle with regulation and comprehension of how best to manage the new market, but many believe they should let well enough alone. The Information Technology and Innovation Foundation (ITIF) released a report on Monday detailing why internet marketplace platforms do not need their own, special regulations to address potential competition, privacy, or employment concerns. Describing four general concerns that regulators have about internet platform companies (such as Uber, AirBnB, eBay, etc.) the report lists:

The first is that some of these platforms have become too powerful and are precluding platform competition in the marketplace. Second, regulators and some consumers have worried about the misuse of consumer data and inadequate precautions to protect the massive amounts of data these companies collect. The third concern is that platforms take advantage of their suppliers by classifying them as independent contractors rather than employees. Finally, regulators and incumbent industries have expressed concern at the threat that platforms pose to existing businesses.

The ITIF argues that these concerns are misguided; that the very qualities that are worrisome to regulators are based on misunderstanding of how internet-based companies contribute to market and actually mitigate against market abuses. The debate will likely be ongoing, so long as Silicon Valley continues to pump out digital innovation, and for as long as its ideas reach European shores.