Europe’s Bite May Not Match Its Bark
December 1, 2019 Technology
European Union regulators have shown they are serious when it comes to fining global technology companies.
They have enacted massive fines against the chipmaker Qualcomm, Google and others in recent years. Last year, they fined Qualcomm nearly 1 billion euro and then again this year hit it with another 242 million euro ($273 million at the time). The fine prompted President Donald Trump to say that European commissioner for competition Margrethe Vestager “hates the United States perhaps worse than any person I’ve ever met.” The EU has fined Google more than 8 billion euro.
The European Union also instituted the notorious data privacy regulation called GDPR, or General Data Protection Regulation. GDPR is the reason every website now creates a pop-up screen informing you that you’re being tracked.
But is the EU’s reputation for cracking down on tech companies justified? Not if you ask Richard Stables, an e-commerce entrepreneur who went head-to-head with Google and largely lost, according to a profile in The New York Times.
“It took basically eight years to get something done,” according to Stables, the former CEO of Kelkoo, once a leading shopping destination for Europe. “That’s a complete disaster.”
The criticism is that the Europe Union takes years to investigate antitrust violations of law. Even if it exacts fines, like the $2.7 billion from Google parent Alphabet in 2017, there is no change that opens up the market to competition. Cases and big fines have done little to quench the appetite of big tech in Europe. Google’s revenue has risen from $23.7 billion in 2009 to $137 billion in 2018, as noted by The New York Times.
Kelkoo’s CEO says that Google launched a shopping service. By February 2011, it was putting its own listings at the top of search queries instead of Kelkoo’s. “It basically smashed the market,” Stables told The New York Times. “Our free traffic that came from Google dropped by 92 percent in two or three years. Our revenues took a massive hit.”
The complaints against Amazon.com have been similar. In 2013, Brad Stone wrote The Everything Store, which recounts how Amazon founder, president and CEO Jeff Bezos once tried to buy diapers.com. When the e-commerce retailer refused, Amazon sold diapers at a loss every quarter, destroying its rival in the process.
There’s some talk that the U.S. could go after tech giants with a second look at “predatory pricing” theory. The U.S. Congress already has begun hearings about the various business practices of tech companies. The House Judiciary Committee has requested vast amounts of information from Amazon, Apple, Facebook and Google, including questions about Google search results.
Meanwhile, the European Union is still processing hordes of complaints about GDPR violations. Helen Dixon, Ireland’s data protection commissioner and the de facto GDPR regulator for Europe’s tech industry, told Fortune magazine that 10,000 complaints will have reached her desk by the end of 2019. (Google, Facebook, Apple, Twitter and Microsoft Corp. all have international headquarters in Ireland.) It may be years, though, before it’s clear what kind of fines and enforcement to expect from the European Union.