Gone Google: Europe is pushing to limit Internet companies

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Europe’s battle against large Internet companies (or should we just say Google?) wages on. Spain just introduced a new intellectual property law that will require Spanish news publications to charge a fee every time Google News posts a link to “even the smallest snippet of their publications.” As the head of Google News explained in a blog post, such a funding model is not sustainable, considering that Google News makes no money from its services. So Google News is pulling out of Spain.

Spain’s law spells bad news for Spanish-speaking Internet users around the world and carries dangerous consequences for treatment of the right to link to content under copyright law. In fact, it is difficult to find a single party who will benefit from the law. What might seem to be a bald exertion of special interest rent-seeking on the part of the Spanish publishing industry has, in fact, destroyed one of the major services that drives readers to Spanish news sites. Far from teaching Internet users that they must pay for good information, Spanish publications have simply cut themselves off from a huge swath of potential consumers.

German publications learned this the hard way when German law instituted a similar fee in 2013 (the difference being that German publications had the option to charge the fee, whereas Spanish publications will be required to do so). German publications quickly realized that it was more profitable to forego charging Google and include their content in the Google News index, effectively killing the law.

Things are getting real. Europe’s actions against Google thus far could be interpreted as blustering, bluffing and political posturing. The European Parliament recently voted in favor of an antitrust resolution to unbundle Google’s search engine from the rest of its services, but the resolution has no legal or political teeth.  The CJEU’s “right to be forgotten” ruling could be circumvented by searching for content on google.com instead of European versions of the search engine, such as google.fr. Germany’s ancillary copyright law, the precedent to Spain’s law, was optional.

But in the past few months, lawmakers have been cracking down. The “right to be forgotten” has been extended to .com Google domains. New European Digital Commissioner Günther Oettinger suggested that ancillary copyright laws could be expanded. The United Kingdom just announced a “Google Tax” that slaps a 25 percent surcharge on profits generated in the United Kingdom that are transferred overseas by multinational companies. Many expect similar taxes to follow in other European countries, increasing costs for U.S. tech companies and erecting previously nonexistent barriers in the digital economy. Such barriers will be fortified by tougher data protection and privacy policies coming down the pike.

It is politically popular to rant against large U.S. tech companies as “neo-liberal,” imperialist or big brothers, but the truth is that a huge percentage of European Internet users benefit from the services of these same companies. Google enjoys about 90 percent of the search engine market in Europe, a higher percentage of the market than in the United States.

Google’s actions could foreshadow a new trend in which foreign Internet companies find it impossible to operate in Europe. European lawmakers and special interest groups are creating a market characterized by complicated regulations, added fees and legal uncertainty. We could be looking at a future Europe cut off from the global Internet, replacing foreign services with second-tier duplications, such as a publicly backed European search engine that some Google critics are calling for.

An example of what a fragmented web would look like is Wiktionary, a useful wiki dictionary tool that has different platforms for different languages. The English version (en.wiktionary.com) is far more robust than alternatives (fr.wiktionary.com, etc.). The service would be most effective as a coherent whole, where all crowdsourced knowledge is pooled on a single platform. Now use your imagination to apply this small-scale example to wikis, search engines, ecommerce sites, news aggregators and other digital platforms or services that could be fragmented based on language, country, region or political party in power. It destroys the point of the Internet.

If Europe really wants to make a dent in the dominant U.S. presence in the tech market, it should look at reforming its own policies. It is more difficult to form companies in Europe. Tighter regulations hamper innovation. Rather than fostering the growth of European businesses that prioritize European values, such as data privacy, many European politicians are coming out with messages like those of French Prime Minister Manuel Valls:

“It would be wrong to think all regulation kills innovation … It’s the role of the state.”

Google just announced that it is shutting down its engineering operations in Russia in response to Russian laws that require all data about Russian citizens be stored locally in Russia. Google pulled out of China in 2010 in response to cyberattacks and censorship legislation. Is Europe trying to be next on the list?

If Europe keeps telling Google to leave, Google might just go. The results won’t be good for anyone.

 

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