Is the EU trying to kill Google?

Author: James Kinsella
18 May 2015 18:50:13

No, silly – but the Digital Single Market could help create a European competitor

It took several nanoseconds after the release of the European Commission’s Digital Single Market proposal last week for pundits to pounce, on both sides of the Atlantic.  A lot of Europeans called it “too little too late”. The Wall Street Journal predicted that US tech companies were gearing up to fight it. My favourite headline, from Hollywood watcher Variety:“Why film bizzers are still outraged over Europe’s digital single market plan”. Still? It’s just been released.  (Some of the best coverage, in my view, came from buzzfeed: clear and accurate – see below.)  

Some of the critics make me wonder: have they actually read the document? It’s not long – 17 pages of  clear prose. I am here to report: it does not set the stage for the end of the digital world as we know it; and it does not target Google.

Note to Google: not everything in the digital world is about you!

The Commission’s DSM Strategy is a thoughtful piece of work that, if implemented, will go a long way to update rules for the digital age in which we actually live. And yes, by helping to make Europe a source of global tech players, it could help create a Google challenger.

At base, the DSM is an effort to help guarantee the digital marketplace – consumers and producers – benefit from the vaunted “freedom of movement” concept that is the heart of the EU. That’s my summary.

The Commission puts it differently – better digital access for consumers and businesses, encourage digital networks and services to flourish, and help ensure Europe is not left out of the race to develop Cloud and Big Data platforms.

Yes, let’s be clear: this is a EUROPEAN manifesto. It has been developed BY Europeans FOR Europeans, for a digital world that, up to this point, has been created mostly by Americans. But everyone can win from this, because the same obstacles that prohibit Europeans from developing truly pan-European companies hurt everyone.

Up till now, the Americans have had a distinct advantage. Their digital products gain SCALE far more quickly in the US than a French or British or German competitor can do in those respective, smaller markets.

Successful technology depends on that scale. Why? Well, take an app on the web, for example. Only through scale can developers prove the product can handle hundreds of millions of hits at once. Only through scale can innovation be adopted by the millions of users necessary to transform the “new” into “the way things are done.”

My personal frustration, having spent the last 15 years running tech companies in Europe, is that Europe itself does have the SCALE – of a rich market, wealthy consumers, tech-savvy developers. But the scale can only be reached if Europe acts like EUROPE, rather than the federation of states it comprises today.

How is the DSM going to change that? The Commission proposes doing away with differences in contract and copyright law as well as VAT, problems that have bedeviled all of us who have started companies in Europe. That’s going to take some time. In the meanwhile, they’re proposing to let traders use the national laws where their company was established as sufficient to doing business cross-border. That would be a great step forward. That’s the kind of thing Google benefited when it was born in California – it didn’t have to worry about how a New Yorker would access its service, or pay for ad links. There are differences among the 50 states, but there is extraordinary “interoperability” between them. The EU, by comparison, is, well, 28 separate nations operating independently when it comes to e-Commerce.

Even more fundamental a problem we face in Europe: no nation state in the 28-member union has the SAME rules for how to LAUNCH a company.  

So here’s my personal favourite part of this DSM plan: an idea – and it’s just an idea at the moment – to allow any established company to expand its operations cross-border ONLINE and to be pan-European within a month. They’re calling it the “Once-Only” principle. Now THAT could really change Europe, for the better.

Better late than never. Better sooner than later, though.

There’s a lot of other stuff proposed, like cybersecurity rules sometime in 2016, after the Data Protection Regulation becomes law later in 2015.

The new regulations could also substantially increase the burden on service providers who hold or transmit customers’ content. The Commission doesn’t draw a conclusion yet. But they do point out that how things work now – that intermediary service providers are generally not liable for content they transmit, store or host – has been key to the flourishing of this part of the industry. Please don’t kill us, Commissioners! Badly framed regulations could do just that.

Also worth a read:

James Kinsella is the founder of Zettabox, a European-based cloud-sharing platform. He is a successful serial entrepreneur who has led two other pan-European companies before launching Zettabox. Reach him on Twitter @jimkzettabox or at https://uk.linkedin.com/in/jameskinsella.

James Kinsella is the founder of Zettabox, a European-based cloud-sharing platform, launched to address data protection and sovereignty issues for enterprises faced with the responsibility to comply with new EU regulations. A long-time tech entrepreneur, James is a proud citizen of both the US and Great Britain. Reach him on Twitter @jimkzettabox or at https://uk.linkedin.com/in/jameskinsella.