Europe is bringing a powerful ecosystem to an entirely different part of the world, after the heart of this industry has been focused squarely in Silicon Valley for the last few decades.
A New Home for Tech
Ask virtually anyone where they can find the heart of the technology world, and the answer will nearly always be California or Seattle, Washington in the United States. Those parts of the world are known for what’s new and cutting edge. On the other side of the Atlantic Ocean, Europe is known for both tradition and innovation, but the tech industry there has always been a highly limited one.
Still, Europe has hardly allowed itself to be stuck in the past. Indeed, 15 of the largest 20 technology firms (based on value) are located in the U.S. On the other hand, of the largest 20, only one is located in Europe. However, a substantial shift has been taking place, dragging the tech spotlight from the western U.S. to eastern Europe.
Increasingly, the European tech sector has been growing its power. True, the headlines for this industry have been overwhelmingly U.S.-based, but that is starting to change. To a rising extent, Berlin and Brussels are drawing investor attention that used to belong to Silicon Valley. The E.U. has zeroed in on a considerable opportunity, and the rising stars there have moved onto the U.S. radar. This, just as the E.U. has been taking steps to create and firm up its regulations for the tech world.
Regulatory Evolution
As the E.U. tightens its regulations and bulks up the enforcement of those rules, tech giants from the United States have been finding the environment increasingly challenging. These firms have faced everything from fines to penalties from E.U. regulators. For example, closer to the start of 2019, Google was slapped with a $1.7 billion fine for E.U. competition regulations violations.
Furthermore, the E.U.’s digital copyright laws are also in the midst of an important evolution. Companies are already applying the new regulations. One example is Spotify’s recent accusations against Apple with regard to alleged antitrust abuses in the European Union.
Additionally, the E.U. is forming a unique regulation for the technology industry regarding the handling of personal information. This regulation gives individuals control over their own data, not only in terms of how it is used, but also with respect to profits generated by the use of that information. This new law would also require open tech firms to behave competitively. This has the potential to benefit millions of individual users. Furthermore, it offers the possibility of bolstering the economy while keeping tech giants’ power under control once they have accumulated enough of it.
US Tech Sector Challenges
Just as these evolutions are taking place in Europe, the tech giants of the United States have been contenting with challenges of their own. Everyone from tech billionaires to the corporations themselves have faced substantial legal and regulatory difficulties. A rising number have been facing congress due to accusations of privacy violations.
Even the country itself is in the midst of extensive debates regarding tech giants and whether or not they have grown beyond an acceptable size and have become too powerful. Currently in the media spotlight is Senator Elizabeth Warren who is seeking to run for president next year. Warren believes Facebook has already crossed beyond an allowable size and should be broken down into smaller companies.
U.S. regulators have placed the spotlight on a number of the leading tech firms in the country. However, issues such as antitrust challenges have been a part of the tech industry for more than half a century. IBM was already facing these types of challenge back in the 1960s. In the 1990s, Microsoft faced its own similar issues.
Today’s tech giants face more complex and extensive accusations than those of decades past. Allegations now reach as far as individual rights abuses through privacy violations and even allowing misinformation to destabilize democracy.
As Europe Moves Forward in Tech
As the E.U. works to establish its regulations ahead of the efforts to do so in the United States, Europe is becoming a tech industry force to be reckoned with. Technology giants in the United States could soon be cut down to several smaller sized companies. At the same time, smaller European companies are only just taking off.
As they are growing up in an environment in which they must already comply with the E.U.’s competition regulations, this may prove to strengthen them. If E.U. firms grow at the same time that U.S. giants are cut down, it may provide a shift in the heart of tech power. The E.U. is already rising to the position of global leader in technology industry legalities
Growing European Rivals
Still, it doesn’t require the imagination to be stretched too far to think that one of the smaller firms coming from Google or Facebook would rise to the level of dominance once again. However, they would need to achieve this goal as their European rivals thrive within the solidifying E.U. ecosystem.
Europe’s General Data Protection Regulation (G.D.P.R.) is not considered to be perfect by any means, but it is a step ahead of what most other countries had in place before its existence. In fact, several nations have used the G.D.P.R. as a template for their own comparable tech industry laws.
Many believe that other nations will continue looking to the E.U. for guidance in their tech regulation development. This may soon be the case when it comes to the new E.U. law granting individual sovereignty over personal information, as well as the regulations halting firms from blocking competition.
Of course, there is always the chance that other nations will not follow suit and that E.U. firms will find themselves isolated from the direction taken throughout the rest of the world. Still, that risk seems low as even California, the center of Silicon Valley, has adopted its own version of the G.D.P.R.