You are currently viewing Unraveling Tech Monopolies: The EU’s Pursuit of Fair Competition and Sovereignty

Following recent events, states had to undertake some drastic measures to protect their national security and public order. Major decisions had to be made to maintain some stability in this uncertain, and controversial economic and political environment. However, while we might think that the states are the main actors concerned by this decision-making process, it might be far from the truth. In recent years, mergers and acquisitions of tech companies in the European Union have significantly surged, leading to some form of consolidation and the formation of monopolies. The solid monopolies built by digital platforms like Google or Meta have led to repeated abuses, often inadequately regulated by existing laws.

Tech Monopolies Unveiled : Analyzing the Acquisition Predicament

The overmentioned tech companies gained a collective stranglehold over technological innovation and seized a notable share of added value.
This has prompted the EU nowadays to raise some compelling questions around this subject matter. Currently, the EU is taking proactive measures to prevent and constrain such maneuvers. The EU’s competition policy has become significantly stringent, as part of its efforts to ensure fair competition and protect its sovereignty. What has propelled these issues to a heightened status within the European Union?
Ripple Effects of Tech Monopolies : Shaping Societal, Economic, and Regulatory Landscapes
Many events contributed to this awakening. Indeed, in a world where corporate entities amass extensive data and financial resources, states often find themselves relatively weakened, facing companies that rival or even exceed their influence.
The acquisition of WhatsApp by Facebook in 2014 led to major data protection concerns and highlighted how a tech company’s monopoly can have a drastic impact. In fact, subsequent changes to WhatsApp’s privacy policy, such as allowing communication with WhatsApp Business accounts and storing conversations on Facebook-owned servers, triggered major privacy concerns among users. Furthermore, in 2018, the Cambridge Analytica scandal revealed that data analytics firm had harvested personal information from millions of Facebook users without their consent and used them in a political context creating a critical shift in the US elections.
These series of events not only raised concerns about the potential misuse of user data and its implications on privacy but also underscored the influence of big tech companies on democracy and State sovereignty.
Nevertheless, the consequences can eventually be more financial.
We all know that it’s usually challenging to enforce rules on big tech companies, especially tax laws.
Recently, Amazon’s successful challenge against the European Commission’s order to repay €250 million in unpaid taxes to Luxembourg allowed the company to negotiate taxation terms akin to a state. This ruling issued by the EU’s highest court, the Court of Justice, establishes a precedent for handling similar tax disputes. The court established a precedent that holds the potential to elevate the bargaining position of corporations, such as Amazon, in negotiating taxation terms.
Besides, market concentration in the tech sector has resulted in significant societal and economic consequences, such as inequality, weakened labor rights, and higher prices for consumers. For example, by acquiring competitors and limiting access to affordable options, big tech companies can manipulate market prices. Eventually, it could enhance goods and services prices and curtail purchasing power.
All these implications made EU members rethink their policies.
EU’s Response to Tech Dominance : Implementing Measures and Innovative Approaches

The Digital Markets Act (DMA), which was adopted by the European Union in 2022, represents a significant shift in the approach to regulating big tech companies. One of the key innovations introduced by this regulation is the imposition of interoperability conditions on certain market segments; mainly, the gatekeepers such as messaging applications and app stores. For example, to disrupt the entrenched positions of the dominant players it mandates messaging services like Facebook Messenger to be interoperable with their smaller competitors. In such case, WhatsApp should allow its users to message a Telegram user.
By requiring interoperability, the regulation seeks to create a more level playing field, allowing smaller competitors to gain market share by offering a better user experience.
In this context, the EU also introduced the Digital Services Act (DSA). To establish a safer and more transparent online environment for users. The DSA unveils a comprehensive set of rules for digital services, with a focus on transparency, accountability, and user protection. For instance, it addresses concerns related to content moderation, advertising practices, and the dissemination of illegal content. By imposing these requirements, the DSA aims to hold big tech companies accountable for the content and services they provide.

In conclusion, it is evident that these measures along with others emphasize the EU’s ambition to assert its power and sovereignty by endorsing its restrictive laws facing tech giants. Simultaneously, the EU is also implementing rule sets, such as the Governance Act, with the broader aim of promoting European companies in this evolving landscape. But that’s a subject for another article…

 

Sources

  1. https://oxil.uk/publications/2021-01-20-plum-digital-sovereignty/Plum_Aug_2020_Digital_Sovereignty_states_enterprise_citizens%20%281%29.pdf
  2. https://www.eubusinessnews.com/new-european-law-set-to-topple-the-big-tech-monopolies-leading-global-data-body-brings-story-to-light/
  3. https://corporateeurope.org/https://www.maddyness.com/2023/10/04/le-digital-markets-act-permettra-t-il-de-briser-le-monopole-des-gafam
  4. en/2023/04/how-commission-outsourced-its-merger-policy-googles-best-friend
  5. https://oxil.uk/publications/2021-01-20-plum-digital-sovereignty/Plum_Aug_2020_Digital_Sovereignty_states_enterprise_citizens%20%281%29.pdf
  6. https://www.vie-publique.fr/eclairage/284907-dma-le-reglement-sur-les-marches-numeriques-ou-digital-markets-act
  7. https://www.csis.org/analysis/internet-or-splinternet-consequences-european-tech-sovereignty
  8. https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6423
  9. https://assets.euromoneydigital.com/dims4/default/34541ae/2147483647/strip/true/crop/2000×1333+0+0/resize/840×560!/quality/90/?url=http%3A%2F%2Feuromoney-brightspot.s3.amazonaws.com%2F8f%2F13%2Fe2f929d749ecad17e0c689eb09cf%2Fadobestock-484291400.jpeg

 

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