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The EU Proposal for a Transatlantic Tech Partnership Is Not Credible. Here’s Why.

The EU Proposal for a Transatlantic Tech Partnership Is Not Credible. Here’s Why.

April 15, 2021

Ursula von der Leyen, the European Commission president, called for a “new transatlantic agenda for global change.” Core to this proposed agenda was closer cooperation between the EU and the United States and an identified need to work together on technologies and trade. Von der Leyen argued that the European Commission and the United States “need to join forces as tech allies to shape technologies, their use, and their regulatory environment.” Before such a needed partnership can be fruitful, the EU will need to make a number of changes.

First, Europe has taken unilateral actions against U.S. tech companies. A number of EU nations are planning to tax American tech company revenues in Europe, which constitutes a violation of long-standing international tax agreements. In addition, the European Commission recently introduced the Digital Markets Act as part of the Digital Services Act package. Both legislative proposals update rules regarding prohibition of illegal content in the online space and create tailor-made rules against digital gatekeepers—namely, Facebook, Amazon, Apple, Netflix, and Google, a.k.a. the “FAANGs”—so that some practices can be considered anti-competitive without the need to demonstrate their anti-competitiveness. FAANGs are prevented from conducting some practices which will be entirely accepted by FAANGs’ EU rivals. With such unilateral legislative proposals, the European Commission forces the United States to discuss Big Tech regulations based on these proposals: These European proposals constitute the default position for potential discussions. Not a diplomatic way to initiate discussions, one would argue.

In addition, the selective worries on privacy coming from European leadership undermine their credibility. Indeed, the way the government in EU member states uses data has little logic. France, Germany, and other member states can use data with little (or no) scrutiny from the European Commission, but the transfer of data from Europe to the United States suffers considerable barriers. As illustrated in the recent Schrems case, data transfers from Europe to the United States are potentially illegal under EU law, even if this means nothing but, say, Facebook users connecting to their account and sending data to the United States only because Facebook’s servers are located in the United States. Europe’s double standard on issues of privacy prevents an appeased, rational, and utterly necessary discussions between European and American regulators on these issues. Again, the Europeans’ harsh stance on privacy, unilaterally construed and vigorously enforced, is a barrier to sensible tech discussions.

Finally, discussions about a transatlantic technology space are difficult to grasp, given the EU’s antitrust enforcement has heavily targeted U.S. tech companies so far. Pioneering the current techlash on innovative American companies, the European Commission has fined U.S. superstar digital players. This enraged several U.S. presidents, such as President Obama, who considered that European investigations and lawsuits against U.S. tech companies were carved out of “commercial interests” because European tech companies couldn’t compete with American companies. Later, President Trump argued that European lawsuits were evidence of the EU having “taken advantage of the U.S., but not for long!”

The question is: Would President Biden continue the series of confrontations with the EU, or would he endorse domestic aggressive antitrust actions against Big Tech, as suggested by a 2020 Democratic House Report? Chances are, President Biden will ultimately position himself in the middle: He might oppose the European techlash while simultaneously push for changes in antitrust laws to appease a domestic techlash. Regardless, transatlantic tensions may continue as President Biden legitimately supports U.S. tech companies against the untrammeled European techlash. Again, these tensions are doomed to poison transatlantic relationships.

All in all, Europeans are not credible when they communicate that they wish to engage in transatlantic tech discussions. Even if America would want to engage in a transatlantic partnership of good faith, the European position is the deciding factor, and the bargaining power is in the European courts. Although now, more than ever, the new challenges that China poses require Europeans and Americans to seriously engage in fruitful transatlantic tech discussions. It first requires Europeans to dial back their crusade on Silicon Valley.

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