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Why does Europe love technology giants?

Why does Europe love technology giants?

Why does Europe love technology giants?
Why does Europe love technology giants? 

Insights show that 19 out of 20 Europeans use Google when they look for something on the Internet. In any case, the challenge chief Margrethe Vestager isn't among them. Qwant utilizes a contender, guaranteeing that it doesn't gather by and by recognizable data from clients for business purposes. 

Danish doesn't utilize Google Maps, Gmail, or some other letters in order item since it accepts there are different choices that "don't upset its protection," as indicated by The Economist. 

The distribution refers to Vestager's announcement during the SXSW Technology Forum in Austin, Texas. She said individuals don't know about the value they pay utilizing the administrations of large web organizations.

"You may not pay in cash while" liking "the picture or asking Alex how much a glass of butter weighs, but in fact for the so-called" free "services you use, you pay for your privacy," says a celebrity Commissioner Pathos.

He is not the only suspect in big tech companies like Alphabet, Apple, Amazon, and Facebook. Their growing influence and the huge database they work with have led governments on both sides of the Atlantic to tighten regimes over the past few years.

There is another problem in Europe - the administration believes that American giants are not paying enough taxes on the old continent.

There is also concern about content control, as was the unobstructed distribution of the Christchurch terrorist attack video. Many people believe that social networks should have the tools to limit these messages.

Critics believe that tech giants tell consumers about their rights and ensure their privacy, but in reality, this is not always the case.

If this problem is linked to antitrust law and regulators are given the opportunity to impose greater financial sanctions, Internet companies will be encouraged to do better. At least that's what officials in Brussels think.

“European law strictly prohibits the use of personal data to ensure market dominance,” says Andreas Mundt, chairman of the German Antimonopoly Committee.

In February, he and his colleagues published a 300-page analysis alleging that Facebook was using its dominant position among other social networks to gather personal information from users.

According to the traditional definition of dominant position in the market, if a company is able to raise prices without losing customers, regulators have reason to intervene. But Facebook is free to use and this metric cannot be valid.

According to Andreas Mundt, the fact that the social platform has the ability to delve into the privacy of consumers without leaving them, can also be seen as a sign of a dominant position in the market.

As a result, Germany is taking additional measures and tightening rules for the use of consumer data. Facebook, for example, will not be able to process statistics from all of its apps at once (such as Instagram and WhatsApp), and will restrict the data it collects for visits to external sites that users access via the social network.

The second logical step for regulators, after restricting companies' access to personal data, is to get financial compensation, according to The Economist. If technology giants dominate the market because of their data sites, antitrust authorities may find it necessary to share them, either with consumers (who create them) or with other market players.

This would seriously hurt the market valuation of these companies - first, because Europe is one of its largest markets and second, because of the possibility of "copying" these regulations elsewhere in the world.

Europe cannot boast of a serious presence on the list of global technology companies. Only SAP is listed in the Top 20, and in Top 200 there are 8 representatives of the old continent. In contrast, the regulatory burden in Europe far outweighs its presence in the market.

Explanations for this are different. On the one hand, over-regulation in the technology sector may hinder the development of local companies as they are in the United States. Or at least hinder the emergence of true "Internet giants".

On the other hand, the toughest sanctions are imposed on foreign companies, such as Google, Apple and Facebook, which may also carry profits on local political leaders, according to The Economist.

There is another view. The companies that “suffer” the most from the emergence of new technologies are the European automobile, telecommunications, and media companies - increasingly industries that are receiving more “care” from European governments.

Technology experts criticized the new copyright regulations, for example, for a vote by the European Parliament in early April, because they placed the attention of major media giants before businesses and online consumers themselves, also affecting freedom of expression on the Web.

Whatever the motives of Brussels officials, technology companies will have to get used to the new status quo. Their financial statements show that they face serious challenges in the old continent.

This means that Europe and the US think differently when it comes to competition rules.

Over the past few decades, US antitrust policy has dominated free-market supporters, the so-called Chicago School. Its representatives are skeptical of government intervention, except for the most egregious cases.

Dominant companies are often left free to act on the assumption that market dominance will be removed sooner or later by the market itself and the principles of free competition. Something similar happened with MySpace, for example.

In Europe, regulators have historically been more skeptical of companies with a large market share. European state institutions also have much greater influence than their US counterparts.

The General Data Protection Regulation (known as GNP), which took effect last year, has taken the problem of privacy to new heights. In addition to harmonizing requirements across EU countries, the Directive enabled consumers to choose how to process their personal data.

This completely changes the rules of the game in targeted online advertising, which is entirely based on statistics collected from various mobile and online apps. According to US consulting firm eMarketer, in 2018, this business generated revenues of $ 108 billion.

With the entry into force of GDP, companies operating in the European Union faced many legal problems. Some also have lawsuits likely to reach the EU Court of Justice. The result will be an indication of the long-term effects of new, more stringent regulations.

Margrethe Vestager compares Google and Amazon with energy providers and water companies. According to her, their networks turn them into natural monopolies, which necessitates their stricter regulation.

One idea that technology experts are discussing is to allow users to “migrate” their data (Google search, Amazon purchases, Uber trips, etc.) among different online service providers.

Thus, the technology giants will continue to run vast amounts of information, but they will not have the honor of being the sole agents. Users can post Facebook statuses on external platforms, giving them better safeguards to protect personal data, for example.

Critics of the idea, however, warn that the free movement of data and their security guarantees are difficult to reconcile. Users will have to judge very carefully who entrusts their personal information, rather than clicking the "Accept" button automatically, as most currently do.

Another question is whether there will be enough demand for these services, given the experience of the banking sector. EU countries, such as the UK, have forced banks to share their customer data with third countries, but the expected boom in independent financial applications has yet to take place, according to The Economist.

In general, most experts expect that the integration of antitrust laws and data protection will, over time, reduce market dominance over technology giants and pave the way for the emergence of different competitive services. Enthusiasts remember the story of forcing IBM to separate its business from hardware and software, creating a whole new industry of competing software developers.

Europe is unlikely to be able to stimulate this process independently. But if its example is moved to other places around the world, the changes may be really drastic.