The EU must make (digital) peace, not war, with the United States
In a time of growing influence from China and its big internet companies, you may think we urgently need the EU’s proposal transatlantic technological partnership with the United States. You would be right. And yet the EU is waging the wrong war, stepping up its fight against America’s most innovative tech companies. If the EU wants any hope for a stronger transatlantic alliance now that, in President Biden’s words, “America is back,” it will have to defuse the digital war.
Andreas Schwab, the leading MEP on the Digital Markets Act (DMA) – the EU’s new proposal to regulate digital competition – recently amended the DMA so that it only targets American technology companies because it considers that “the DMA should be clearly targeted on the platforms which play an indisputable role of guardian because of their size and their impact on the internal market”.
With the proposed changes, European tech companies (such as Booking.com) are getting out of hand. The DMA will only apply to five US technology companies, namely Google, Amazon, Facebook, Apple and Microsoft. This is a drastic reduction of the twenty companies initially targeted when the European Commission published the DMA last December.
Schwab’s cautious exemption of any European tech company from the scope of DMA goes hand in hand with a provocative tone about American “partners”: “let’s not start with number 7 [gatekeepers] to include a European tech giant just to please [President Joe] Biden “, he said clear.
On Twitter, when asked how he would justify such an openly discriminatory and anti-American stance in light of widespread international trade rules, Schwab bizarrely announced a book sold on Amazon (sic!) Written by the US senator. Josh Hawley (R-MO), “The Tyranny of Big Tech“:
Refer to a book plagued by errors and misrepresentations written by a populist senator to justify openly discriminatory treatment of American technology platforms is not only a weak argument, but it is also no argument at all.
EU officials must go back and read the 1968 classic bestseller by French journalist Jean Jacques Servan-Schreiber, The American challenge, when he warned that “One by one, American companies are capturing the most technologically advanced sectors of the economy, the most adaptable to change, and the highest growth rates.” But Servan-Schreiber did not call for an attack on American companies; he called on Europe to put his house in order. He wrote: “Nothing would be more absurd than to treat the American investor as ‘guilty’ and respond with some form of repression. “
Servan-Schreiber was right then; it is right now. So many well-known positive solutions exist in Europe. For example, we need a digital single market with one regulation at EU level instead of 27 regulations fragmenting the internal market. Does DMA avoid regulatory fragmentation? Not at all. It aggravates it by allowing the adoption of national regulations in each Member State above the DMA. We need a strong capital market for European technology companies – a “European NASDAQ”. Is DMA helping create a capital market that Europe’s tech companies urgently need? Not a single word in the DMA on how Europe’s tech entrepreneurs could compete by increasing capital injections. The European NASDAQ could probably emerge from outside of Europe, in London or new York.
Rather than positive policies, the DMA channels fear of the EU and insecurity in attacks on US companies, thus undermining the prospect of an EU-US technology partnership. As the knives sharpen, Europeans cannot expect any transatlantic partnership.
Ideally, a transatlantic tech partnership would spur government-business collaborations to rebalance China’s burgeoning tech industry. With optimal innovation policies, Chinese state-sponsored and state-affiliated technology companies can be held in check. The United States alone and the EU alone may not be able to effectively address the multiple concerns of a communist dictatorship mute for a tech champion increases for tech democracies. We need a transatlantic technology partnership. Today, the EU proposal is not credible, even more with DMA.
When will a digital transatlantic peace materialize? French writer Victor Hugo wrote in 1849:
“A day will come when we will see these two immense groups, the United States of America and the United States of Europe, stretching their hands over the sea, exchanging their products, their arts, their works of genius. […] And to get to this day, it won’t take another 400 years, because we live in a time that is changing rapidly ”.
Hugo was right then; it is now: we live in a time that is changing rapidly. And yet we have a divided Europe that does not reach out across the sea but raises barriers through regulations rather than exchanging their genius work through collaborations. Let’s make Hugo’s prophecy accurate, and let’s not go back to the warpath but rather return to the path of transatlantic innovation!