Compilation/Calligraphy
Focus:
1. Although the technology giants have tried their best, the EU legislators have remained unmoved. They have insisted on promoting the latest Internet legislation process and reached an agreement on the Digital Market Act, which may change the pattern of the technology industry;
2. According to the data of the independent lobbying organization Corporate Europe Observatory, since the establishment of the current European Commission at the end of 2019, technology giants have held more than 150 meetings with EU officials, involving 103 organizations;
3. In Europe, technology companies have acquiesced to failure. Google 、 Apple and Amazon The legal team of has begun to consider how to implement the new regulations in the business, including the establishment of a new compliance department.
Recently, the European Parliament, the European Council and the European Commission have reached an agreement on the Digital Market Act (DMA), which aims to restrict the technology giants such as Google, Apple, Amazon and Facebook.
Although the technology giants have tried their best to make the EU open, the EU legislators remain unmoved and insist on promoting the latest Internet legislation process. The pattern of the technology industry may change.
Andy Yen has high expectations for ProtonMail - the secure e-mail service he founded in 2014 now has 50 million users worldwide. But his dream goes beyond that. He hopes that ProtonMail will one day compete with Gmail, which has 1.5 billion users.
However, he also admitted that if the Internet continues to maintain a disorderly and brutal "Western Wilderness" state, Proton will never really challenge Google. "Our growth has benefited from the goodwill of technology giants," he said in an interview at his headquarters in Geneva. In fact, the survival of his own company is also due to the "gift" of these industry giants. "Today's technology giants can directly let us disappear from the Internet without bearing any legal or financial consequences."
What will be the impact of the new bill?
Proton is not an example. Many European companies are pinning their hopes on DMA. This is the first time in 20 years that Europe has revised the Internet market regulation. In addition, the EU is also developing another piece of legislation called the Digital Services Act (DSA), which is dedicated to the regulation of privacy and data use.
ProtonMail founder Andy Yan Tuyuan/Getty Images The Digital Market Act will affect Google, Apple Facebook , Amazon and Microsoft These so-called Internet "gatekeepers" pose a serious threat to the huge digital empire established in the past 20 years. Legislators will finalize the wording and scope of the bill as early as this week, thereby opening up the market controlled by technology giants and giving local competitors opportunities to flourish.
The anti-monopoly legislation is expected to completely change the business model of these giants and disrupt their core integration strategy, making it difficult for them to continue to lock users, dominate the market and seize huge profits.
This bill is applicable to companies with a market value of more than 65 billion euros (71.5 billion dollars). It will for the first time make detailed regulations on the competition mode of large Internet platforms in the European market. For example, it will force Google to allow users to choose other email providers on new smartphones, and it will also force Apple to open the App Store to other services.
The authority of regulators will also be expanded - they will have more extensive investigation power, and can impose a fine of up to 10% of the global turnover on the offending enterprises. In extreme cases, it can even force enterprises that repeatedly violate regulations to split.
Kim van Sparrentak is a member of the Internal Market and Consumer Protection Committee of the European Parliament. In his view, this legislation is an important milestone in curbing the power of technology giants. "We finally started to discuss their huge scale, their interconnection, and what they didn't want to happen. This is a huge victory."
For decades, antitrust organizations in Europe and the United States have been criticized for their inefficiency and slow response. Although the European Commission has begun to increase its anti-monopoly efforts in recent years, its punishment method is completely unable to cause substantial harm to technology giants - in the eyes of many enterprises, this is just a commercial cost of doing business in Europe.
For example, Margrethe Vestager, the EU competition commissioner, has cumulatively fined Google about 10 billion euros in the past 10 years. However, competitors believe that from the perspective of open market, such punishment has little effect. Although the European Court ruled that Google preferred its own service and gave a fine, Google did not admit defeat, but chose to continue to appeal.
Now, the EU has chosen to significantly upgrade its anti-monopoly fire on technology giants, while Silicon Valley giants have spared no effort to shape this war into what they want. According to the data of the independent lobbying organization Corporate Europe Observatory, since the establishment of the current European Commission at the end of 2019, technology giants have held more than 150 meetings with EU officials, involving 103 organizations.
However, interviews with European officials, legislators and other relevant people show that the approach taken by these technology giants is futile. Therefore, their focus now is no longer how to obstruct legislation, but how to comply with these upcoming laws.
Thomas Vinje, partner of Clifford Chance, a Brussels law firm, has represented technology giants and their competitors in lawsuits. He said: "The technology giants no longer consider blocking the new rules, they have lost the legislative fight."
Technology tycoons failed to lobby and legislation was unstoppable
Since the EU disclosed its new science and technology legislative plan in December 2020, an unprecedented lobbying storm has started. The impact of these legislation can be seen.
Google has been particularly active, taking senior officials as lobbying targets and trying to guide legislation in their own way. According to the data of Corporate Europe Observatory, Google's lobbying activity for senior officials of the European Commission tops the list of technology giants, and the number of members of the European Parliament who meet with Google is also the largest.
Google has also formulated a radical plan for Thierry Breton, an EU internal market specialist who played an important role in drafting strict new regulations for large technology companies.
Breton once proposed to spin off technology companies that repeatedly violated EU regulations, which also triggered strong opposition from Google: they called for a stronger "counterattack" against Breton in an internal document describing the lobbying strategy, while weakening the support of EU legislators for the draft legislation.
It backfired. Google CEO Sundar Pichai finally apologized to the French lawmaker and promised that such lobbying "does not conform to our business model".
But Google did not stop there, but continued to launch an offensive against legislators. Van Spallentek said that he recently received an interview invitation from Google to discuss the issue of targeted advertising ban, and promised to make adjustments according to her schedule. But she did not reply.
Many legislators and EU officials who directly participated in the final approval process of this legislation said that this lobbying activity was not Google's patent, and many technology companies had taken similar actions.
The most common reason is that such laws may harm innovation. Nick Clegg, president of Meta Global Affairs, Facebook's parent company, once warned that the Digital Market Act "may ossify the product model and hinder the iteration and experiment of promoting technological progress."
An evaluation report released by Google in 2021, which funded Berkeley Research Group, an American consulting company, shows that the Digital Market Act may "have a chilling effect on R&D and innovation."
The report added: "The Digital Market Act encourages the free use of the investment of other companies, which will inevitably reduce the enthusiasm for investment. Only through independent development of dynamic capabilities can Europe's innovation potential be better protected."
It is not only technology companies that want to influence the European legislative process, but also some departments of the Biden government are lobbying vigorously to block policies and regulations that are not conducive to the development of American companies. A series of letters obtained by the media showed that the White House had lobbied Andreas Schwab, a member of the European Parliament from Germany, to mitigate the impact on large Internet platforms.
One of the documents signed by Arun Venkataraman, an adviser to the US Secretary of Commerce, said that Brussels should consider security issues when supervising large technology companies. But Schwab countered that security issues should not be used as an excuse to weaken the upcoming new rules.
On the eve of the approval of this legislation, lobbyists of technology giants have been meeting with relevant people at the last minute in recent weeks, hoping to have an impact on the final results. But almost none of them worked. Schwab said, "The game is over. I told the big technology companies not to send me any more messages."
Technology giants are widely criticized, and regulatory measures have not kept pace
Although this legislation will not be formally implemented until next year, EU regulators have listed a series of investigations that may be launched accordingly. People familiar with the matter said that the European Union may first take Meta and Google for example.
Officials in Brussels plan to sue Google for violating the competition principle, accusing it of abusing its dominant market position to guide users to use their own services and exclude competitors. After the Digital Market Act is enacted, this kind of behavior will be completely prohibited.
This lawsuit also echoes the lawsuit initiated by the European Commission under the current legal framework of the European Union. The EU has accused Google of favoring its own comparative shopping service and not presenting the best search results to users with objective criteria in the existing lawsuits.
Data source of 2020-2021 European enterprise lobbying ranking list/Financial Times translation, mapping/Sina Technology Google claimed that it had made necessary adjustments as early as 2017 and appealed against the court ruling against it. Google also stressed in its communication with legislators that it will take care of the interests of local enterprises in the EU.
But Richard Stables, CEO of Kelkoo, a comparison shopping website, retorted that they had been affected by Google's anti competitive behavior for many years, and even worried that the latest laws were not strict enough.
Although Google has made some concessions, Stubbs believes that this is not enough to change the status quo, and he is worried that this concession will become the reference framework of the Digital Market Act. "We think the current law is too simple to deal with this problem. We are worried that if you do not solve this antitrust lawsuit, Google will claim that they have complied with the regulations." So he added that if new laws are introduced, "then we must take different measures."
Although small technology companies are excited about the level playing field that this regulation may create, many people are still wait-and-see about the final legislative effect. "Everyone is enthusiastic about making laws, but if they cannot be fully implemented, what is the significance?" Stubbs asked.
Even though the legislation has entered the late stage, there are still fierce political struggles on some key issues, including what restrictions should be taken on targeted advertising, and how much connectivity should be achieved between competing services.
People familiar with the matter said that the focus of the current debate was not whether restrictions should be imposed, but the specific strength of restrictions.
The "Brussels Effect" is taking shape
The regulatory climate for technology companies in Europe has clearly changed. Although the new regulations have not yet officially come into force, the antitrust agencies of EU member states have begun to sharpen their swords against large technology companies.
For example, the Dutch competition regulator imposed a series of penalties on Apple in January and February, because they did not allow application developers to use other means of payment, forced them to use their own payment services and pay 30% commission.
German competition regulators have also recently been given greater authority to track down enterprises abusing dominance and target leading enterprises in certain markets. Long before the Digital Market Act came into force, Germany had the ability to prohibit companies such as Google and Meta from favoring their own products and services.
Outside the EU, the UK is also stepping up the establishment of its own technology industry regulator in order to curb leading enterprises - but they may have to wait a long time after the implementation of the new EU regulations before they can truly play a role.
EU officials said they had learned from other regions how to better deploy these regulations locally. "Although the Digital Market Act has not yet been implemented, it has already achieved results." Schwab, a member of the German European Parliament, said, "In the future, these gatekeepers need to prove that their business models comply with the principle of fairness, rather than regulators to prove that they have distorted the market pattern."
Although the Biden government tried to intervene in the Digital Market Act, they still supported the EU's approach on the whole. The US government revealed that it would take stricter enforcement measures, which coincided with the EU. Not only that, the United States has also entrusted heavy responsibilities to the critics of technology giants - the most famous of which is Lina Khan, the chairman of the Federal Trade Commission (FTC). Her proposal to split Amazon once caused an uproar in the industry.
The US Congress also intends to introduce legislation similar to the Digital Market Act. The American Innovation and Choice Online Act proposed by Republican Senator Chuck Grassley and Democrat Amy Klobuchar has won the support of legislators from both parties. However, it has just entered the legislative process recently and is unlikely to make much progress before the mid-term elections in November.
But in Europe, technology companies have acquiesced to the failure. The legal teams of Google, Apple and Amazon have begun to consider how to implement the new regulations in their business, including the establishment of new compliance departments.
When asked to publicly defend the interests of technology giants, a lobbyist who refused to give his name refused. He said: "The game is over, and I don't want to be the last one to stand in front of everyone and cry. This thing is doomed to the end from the beginning. This is a battle without a chance of winning."
Stubbs doesn't think this is a political mediation. In his view, this is the inevitable result of market sentiment. "The behavior of technology companies violates the principle of competition - harming consumers and strangling the entire industry," he said
When the Digital Market Act takes effect, enterprises will inevitably adjust their business models to adapt to the new laws and regulations. However, it remains to be seen how much reform this legislation will lead to. Despite the merits and demerits behind it, the current system has indeed promoted a great leap in science and technology, but now it may become history.
A senior antitrust lawyer representing large technology companies in Brussels and London said that many people like the services provided by Silicon Valley giants and hope they can be prepared for these changes. "These regulations are hindering the operation of this system, changing the helmsman from engineer to lawyer," he said. "But can this make a beautiful flower?"
