Almost all of the world’s biggest tech companies are American, a fact that’s got the European Union slightly worried. So worried, in fact, that the EU has started looking into forming a regulatory body with the power to monitor companies like Google and Facebook, ensuring that they don’t abuse their dominant market position. A research document, prepared for digital commissioner Günther Oettinger and leaked to the Wall Street Journal, shows that officials are worried about these businesses threatening Europe’s entire economy.
One of their biggest concerns is that since European companies rely on American sites, the former could be quite vulnerable to the latter. In a mad example I’ve just made up, let’s say that France’s cheesemakers primarily sell their wares through Amazon, and one day Jeff Bezos develops a lactose intolerance. If he were to begin overcharging for access, or ban any dairy-based products from his site, France’s GDP could slump.
This same idea applies to all small and medium enterprises that use services like Etsy, TripAdvisor, Booking.com and Google. The last entry in that list, of course, has recently become the subject of two antitrust investigations concerning potential abuses of both Google Shopping and the Android operating system.
Despite the fact that European developers make 42 percent of the world’s app revenue, the continent still suffers with a negative digital trade deficit of around $138 million. The report puts his problem squarely at the feet of “app platform fees” that these companies have to pay to portals like Google Play and Apple’s App Store, although neither are named. There’s also rumblings that Europe is finally looking for a way to penalize these companies for instances of tax avoidance, a hot-button issue over on the continent.
Right now, the document is just an idea, albeit one that will receive plenty of attention from lawmakers a cross the continent. Considering that both French and German officials have spoken in support of making web platforms interoperable, you can expect this story to run and run.
[Image Credit: Getty]
Source: Wall Street Journal