US Tech Giants Criticize EU’S New Digital Strategy

As soon as the European Commission officially launched its new and repeatedly leaked plan for a single digital market, U.S. tech giants raised red flags.

“Imposing regulator barriers would be a grave mistake for Europe, and would have harmful effects on trans-Atlantic trade and investment,” Dean Garfield, head of the Information Technology Industry Council, told The Wall Street Journal. The organization is a Washington, D.C.-based trade group that includes Google, Facebook and Microsoft Corp.

Silicon Valley giants are now gathering their troops to lobby to the Commission about how their businesses work, but also on how they contribute to the EU’s economy. The real battle will begin in a few months from now, when policies are actually made.

Every company using the Internet will be affected by these reforms. The proposed initiatives revolve around copyright, eCommerce, telecoms rules, free flow of data and value-added taxes. And many initiatives will actually benefit B2B businesses. The Commission’s plan aims, for instance, to end the practice of unjustified geo-blocking. At present, only 15 percent shop online from another EU country, and Internet companies and startups cannot take full advantage of growth opportunities online; only 7 percent of SMEs sell cross-border (see the Commission’s Factsheet). It also wants to simplify the tax scheme, which could boost cross-border sales for SMEs and prevent large, multinational eCommerce companies like Amazon from routing online purchases through nations with lower taxes.

But for U.S. tech giants operating in Europe, the Commission’s plan is yet another strike in a series of attempts to narrow down their position on the EU market.

Antitrust charges against Google have been filed and investigations on tax arrangements in Luxembourg for Amazon and on the treatment of Apple by Ireland opened. And the same day its plan was presented, the Commission also launched an antitrust competition inquiry into the eCommerce sector in the EU to identify possible competition concerns affecting European eCommerce markets. Amazon is clearly the target in this case.

“There’s a level of animosity in Europe against U.S. tech companies,” Serafino Abate, a Director at the Brussels-based Center on Regulation in Europe, told The New York Times.