May 19, 2017 at 5:00 am ET
Friday’s congressional subcommittee hearing on international antitrust enforcement could not come at a better time. While the French election of Emmanuel Macron is good news for the future stability of the European Union, there’s room for improvement when it comes to the EU’s overreaching and anti-competitive antitrust enforcement against U.S. companies.
Over the last few years, the EU has taken tough enforcement action against U.S. tech innovators. The European Commission is now considering whether to pass new rules that would further interfere with how American web platforms such as Google, Amazon and TripAdvisor interact with the small businesses they host. And the European Court of Justice is considering labeling Uber a transportation service instead of a tech company. This would force Uber to adhere to the far more rigorous regulations of the former, and in turn create barriers to entry for drivers, many of whom rely on Uber as a key source of income.
These actions, though frustrating, do not come as a surprise. The EU has a long history of protectionism, favoring well-regulated, incumbent companies over disruptive, game-changing innovators. In recent years, much of that favoritism has worked against U.S. tech companies. In April 2015, the European Commission moved to examine Google for an alleged breach of antitrust laws. The same month the commission began the process of inspecting Apple for another potential breach of these laws. And two months later, a similar charge was made against Amazon, which was accused of making e-book sales more difficult for other booksellers.
Meanwhile, Europe has, by and large, failed to keep up in the global push for tech-centric, ubiquitous connectivity. Since the founding of the internet, the EU has launched only a handful of major tech companies. (Spotify and SoundCloud are the most commonly known, along with Rovio, Deezer, Mojang and King.)
There has been some push for change — no doubt in part because of the shock over Brexit. Every year, more European tech companies exhibit at CES – The Global Stage for Innovation. And a small but critical minority of European political leaders are becoming more open to the disruptive world of tech – President-elect Macron being chief among them. Macron came to CES in 2015 and 2016, and while sitting on a panel with other European and American political and business leaders, he gave a passionate defense of both Uber and disruption in general.
“We have to recognize the fact that Uber and all these players provide new opportunities for people as customers,” he said. “And guess what – even when you want to block it, people choose that … You should know that the first city outside the U.S. for Uber as a market is Paris. So people decided, and they are pro-innovation as customers … You should not create a sort of bias, you should … create a level playing field between these different players, but it’s not about blocking innovation.”
Macron’s attitude, however, is far from prevalent, and the extent of his influence over the EU remains to be seen. In the meantime, American companies must continue to push for parity. Friday’s hearing is an excellent start, but its conclusions must be realized in concrete, actionable policies that hold Europe accountable for inequitable treatment.
As Macron rightly pointed out, people pick the digital companies that suit their needs best and, in an increasingly connected world, are less likely to worry about what nation that company hails from. Countries that waste time fighting market disruption will feel the consequences – in the economy, the job market and even diplomacy. Brexit was in many ways a direct consequence of the EU’s regulatory meddling.
In America, we know the power of the people’s choice and have specific legal policies that prevent government from interfering in that power. The result is an innovative, dynamic tech landscape that has made its mark all over the world.
The United Kingdom has seen fit to join our quest for a global, connected world. It’s time for a unified Europe to get on board and embrace the remarkable potential technology holds for everyone. The EU’s protectionist policies are not encouraging European innovation.
Gary Shapiro is president and CEO of the Consumer Technology Association, the U.S. trade association representing more than 2,200 consumer technology companies.
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