This Friday Margrethe Vestager, the EU’s Commissioner for Competition gave a speech on recent issues of technology, business and society under the less-than-humble title of ‘Taming the Titans’. Ms Vestager, who has been described as 'the rich world’s most powerful trustbuster' (The Economist), ‘the world’s most famous regulator, who strikes fear into Silicon Valley’ (The New York Times) and ‘one of the 100 most influential people in 2017’ (Time Magazine), indeed may seem to have the right to brag about her feats.
“Next year is supposed to be a tough one for tech. 2019 is when – if you believe the film Blade Runner – renegade androids should be roaming the Earth. It’s when – according to The Island – we should all have clones created just to provide us spare organs. Those dystopias don’t quite ring true. Because in fact, we don’t just accept what technology gives us. We can shape it to fit our society’s values.”
In an age when most regulators desperately try – and fail – to catch up with new developments in information technology, she is one of the few who has real achievements to show off. Based on her recommendations, the European Commission fined the biggest IT titans, such as Apple, Google or Facebook, for a total of 20 billion dollars in just the past two years. Ms Vestager has primarily concentrated on how these titans abuse their market dominance, and what effect they have on our habits, our privacy or our ability to make human connections.
“Europe has the size to put strong rules in place, like the new rules on data protection. Like the law we proposed last month, to help make sure online platforms and search engines treat their business customers fairly. Or the ethical guidelines for artificial intelli gence, which we plan to present by the end of this year. Because our fundamental values are at stake here – our freedom, our democracy, our equality. And it’s up to us all to stand up and protect them. So they won’t be lost – as they say in Blade Runner – like tears in rain.”
Yet, one must ask the question, how much effect these fines will have on the titans? Will Apple stop looking for ways to ‘optimize’ its taxes? Will Google stop ‘giving preference’ to certain search results? Will Facebook never mislead regulators again? Will Qualcomm stop abusing its market dominance for good? Getting fined for billions of dollars may sound like a catastrophe for most businesses. But if your revenue exceeds 200 billion dollars a year, you may not feelthat necessary to change your habits just because you lost a couple.
“The same companies that, not long ago, transformed our world with new ideas, have become the establishment. They have the power to protect their position, by holding back the next generation of innovators. But our competition rules allow us to protect innovation – as we’ve recently done with Amazon, and as we keep doing when we check that mergers don’t give companies so much data that no one else can compete.”
Indeed, it is worth noting that these spectacular fines have only amounted to between 0.1% and 5.7% of the fined IT titan’s yearly revenue – in stark contrast to some of Ms Vestager’s less famous decisions. In 2015 Cyprus Airways, for example, was fined for a measly 65 million euros by the commissioner. While this fine was far lower than those that the titans had to face, it amounted to a whopping 37% of the airline’s revenue. What followed, predictably, was Cyprus Airways’ bankruptcy and its 550 employees losing their jobs.
Cyprus Airways’ case was definitely a strong message to the aviation industry. Should then we expect Ms Vestager to ever send such a message to Silicon Valley too? Very unlikely. Though comparatively young companies, the titans have already reached the ‘too big to fall’ status. Who has enough power to bring down a Facebook or an Alphabet? Who would even want to take the responsibility? Who would deal with the political fallout? Nobody? Well, so much for a credible deterrence, then.
Comments