It's time for all of us to start paying much closer attention to what's going on in the European Union (EU). The EU's General Data Protection Regulation (GDPR) officially takes effect on May 25, but that's only the tip of the iceberg.
The EU is intent on regulating Silicon Valley as a threat to the economic health of Europe, and it's pushing back hard from an antitrust standpoint. Europe's competition commissioner, Margrethe Vestager, has fined Google $2.8 billion. So far, that's the largest fine in EU history. She's also fined Facebook $131 million and fined Qualcomm $1.2 billion. Apple took the biggest hit; she ordered Ireland to recoup about $15.5 billion in back taxes from the company.
Even for huge firms, those kinds of penalties sting. Vestager evidently takes her job seriously and isn't afraid to swing for the fences. From my perspective, I have to wonder which company is next on her list.
The odd thing about all this is that many of the complaints against the big U.S. tech firms came from smaller U.S. tech firms. So this isn't a clear case of Europe protectionism. It's a larger and more nuanced problem than most people realize.
Vestager recently decided to investigate Apple's bid to acquire Shazam, the music identification app. According to an article in the New York Times, she's more interested in who controls the data than in who gets the money. As she said in an interview, "What will happen when the data that Apple holds combines with the data from Shazam?"
She raises a valid point. There's more at stake here than just money.
Here's another critical issue that most people are missing: Whatever the EU does to counter the influence of Silicon Valley will seem minor when China decides use its growing leverage in global financial markets to choke off the supply of cash to U.S. tech firms.
If you think that won't happen, I urge you to reconsider the situation. The EU seems large and important because it gets a lot of attention from U.S. and European media. But compared to China, the EU is tiny.
Our troubles with the EU are only the preface to what might become a long and painful story. I certainly hope that's not the case, but ignoring the potential for trouble would be unwise and counterproductive.