LONDON – American tech companies are under unprecedented attack by European Union regulators. The European Commission has charged Google with abusing its near-monopoly over Internet search in the EU to favor its own shopping services. It has also opened a probe of Google’s Android mobile operating system. And, as part of its just-announced “Digital Single Market Strategy,” the Commission is calling for a comprehensive investigation of the role of (mostly American) Internet platforms, such as social networks and app stores.
Questionable practices by companies from any country should be addressed in a fair, impartial way. But that seems unlikely to happen here. The key driver of the EU’s regulatory onslaught is not concern for the welfare of ordinary Europeans; it is the lobbying power of protectionist German businesses and their corporatist champions in government.
Germany’s government boasts about how “globally competitive” the country is, and its officials lecture their EU peers on the need to emulate their supposed reformist zeal. And yet, while the country remains a world-beating exporter in industries like automobiles, it is an also-ran in the Internet realm. There is no German equivalent of Google or Facebook. Stymied at home by red tape and a risk-averse culture, the most successful German Internet entrepreneurs live in Silicon Valley. While US-based companies conquer the cloud, Germany is stuck in the mud.
With Germany’s digital start-ups stifled by overregulation and underinvestment, dinosaurs from the analogue world set the policy agenda. Traditional media companies resent their reliance on Google to direct traffic to their sites and its ability to sell advertising based on snippets of their content. The partly state-owned Deutsche Telekom hates that it does not earn additional revenue when people use its network to make calls on Skype, send messages on WhatsApp, and watch videos on Netflix and YouTube. TUI, the world’s largest travel agency and tour operator, feels threatened by TripAdvisor. Retailers fear Amazon’s ever-expanding empire.