EU v Big Tech

the very nature of transatlantic relationships, for better or for worse. Google, Facebook, Apple and Amazon - sometimes collectively referred to as “GAFA” (which is, ironically, also the Irish word for “obsessed” or “preoccupied”) - have become the latest subjects of interest for European Competition Commissioner, Margrethe Vestager. Te Danish Social Liberal politician has made no secret of her agenda to “clamp down” on the activities of these technological behemoths, quickly becoming the poster child for the EU’s crusade to modernise its competition laws for the digital age. Perhaps most notably has been her issuance of fnes for breaches of said laws against these companies, including among them a hefy $1.7 billion sum issued against Google in 2019 for an “abusive” online advertisement strategy. However, Vestager has maintained throughout her tenure that fnes alone will not be enough to deter the supremacy of GAFA, which enjoy near ubiquity in their usage throughout Europe and the wider world, with their astronomical profts surging year on year. For example, social media platform Facebook had around 2.4 billion active users by December 2019, even in light of the Cambridge Analytica fndings. Meanwhile, Google’s parent company Alphabet reported a net income of $6.8 billion and a $41 billion revenue in its frst quarter of 2020 alone - fgures which were described as “relatively strong” in terms of the company’s performance. And so the argument held by some critics goes that these companies are simply so rich that they can aford to pay these signifcant fnes, without taking too much of a hampering to profts. Tis is perhaps most pertinent - and controversial President of the European Commission, Ursula - when allegations of breaches of EU data protection laws are raised; further Von Der Leyen - a self-professed “tech optimist” - hindering the EU’s ability to ensure tection standards has previously argued that technology can adequate data profrom these Big Tech companies is the ultimately be a force for good. And while this law that states that, under GDPR, each national data pro- statement undisputedly holds weight - with EU Member State’s tection authority may only issue fnes innovation making every facet of life more fun, of up to €20 million, or 4 per cent of said company’s annual revenue. Tis there- convenient, and even safer - it seems that the EU fore puts a limitation on the principle EU in instances of is becoming increasingly aware of the of deterrence for the illegal data handling by GAFA. More- encroaching influence held by a handful of over, some national data protection au- fagged as under- American “Big Tech” companies in almost every thorities have been stafed and underfunded in their abil- sphere of the human experience. ity to clamp down on such activity, as necessitated under the GDPR’s “One Stop Shop” mechanism. Tis has perhaps been true, most notably, in the case of Ireland’s Data Protection Commission. Te debate has led some public fgures to call for a more centralised European data protection authority with the necessary teeth to investigate these complaints. In short, there are some who maintain that the EU and its Member States are by and large falling behind on the policing of Big Tech activity, in terms of both market and privacy standards.

Te twin judgements delivered in Ireland v Commission and Apple Sales International and Apple Operations Europe v Commission at the General Court of the European Union last July may perhaps be perceived as a win for Big Tech in Brussels. Te “Apple tax” case made headlines across the world when it was determined that the Commission had not “succeeded in showing to the requisite legal standard” that Ireland had ofered special treatment to the tech giant in terms of tax advantages. At stake in the case was €13.1 billion in tax revenue, leading writers at the Irish Times to dub it “the world’s biggest-ever antitrust decision”. Following the judgement, Vestager said that her team “will carefully study the judgment and refect on possible next steps.” Of course, the Commission may decide to appeal the judgement, but this could take up to three years to see to fruition - and there is no guarantee that the highest court in the EU, the European Court of Justice, will determine the outcome any diferently.

EU Page 28 But the EU is getting notably more creative in its approach towards quelling the growing power of these tech giants. In the wake of the Apple tax case, the Commission announced that it was investigating the possibility of triggering Article 116 of the Treaty on the Functioning of the European Union (TFEU) - a provision that, to date, has never been used. Te usage of this Article would allow the EU to circumvent the need for unanimity when voting on taxation issues, replaced instead by the weighted qualifed majority voting mechanism. In essence, this means that the smaller Member States, especially the ones that have been criticised for having too low corporate tax rates, would be silenced as the EU pushes forward with its agenda for greater corporate tax harmonisation across the bloc. Te Irish government is reportedly opposed to this measure, which would see many Big Tech companies based in Dublin and Cork pay higher rates of tax to the Revenue Commissioners under the EU’s 25-point Tax Action Plan. However, it remains questionable whether Big Tech companies’ presence in Ireland would turn solely on a rise in the current 12.5 per cent rate: the EU is regarded as the world’s biggest market with fve hundred million customers, and a European base to expand operations will continue to be vital to maintain said companies’ presence within the bloc. Furthermore, even with these corporation tax measures, the EU has come to the conclusion that these Big Tech companies are simply not paying their fair share - and are even forcing the hand of representatives in Washington on the issue. Talks of a worldwide “digital tax” have begun at the Organisation for Economic Cooperation and Development (OECD), but eforts were stalled in July as the United States announced it was walking away from the multilateral deal. Tis followed claims from U.S. trade representatives stating that the EU and other countries were trying to “screw America” by introducing said tax on its companies - most notably afecting, of course, GAFA. However, the EU has announced that, should digital tax talks fail, by the end of 2020, the Commission will begin to formulate its own plans for an internal, EU-wide digital Furthermore, even with these tax. Tis move is clearly to be seen as a new line FA’s encroaching dom- corporation tax measures, the EU of defence against GAinance, and the pressure has been felt by Amer- announced recently has come to the conclusion that ica: the hegemonic state that it would hold of on its tarifs imposed to the European pow- these Big Tech companies on France in response er’s unilateral decision to enact a national dig- are simply not paying their fair ital tax, in hopes that an agreement at the OECD can be reached by the end of the year. share - and are even forcing Te general consensus of the EU appears to be that the world can be tasked with clamp- the hand of representatives in ing down on Big Tech’s dominance, with or tion of their parent Washington on the issue. without the participa state. Concludingly, al- though the campaign concerning GAFA is far from over, so far the battle has been stacked in favour of the EU. It seems that Big Tech has come to the realisation that compliance with EU measures will be a necessary evil should they wish to continue expanding their reach into the biggest market in the world. And, of course, the EU is not “against” the presence of Big Tech in Brussels; rather, it wishes to ensure that these corporations are taxed and governed equitably in light of EU principles and GDPR standards. However, we should not view the Commission as a sort of “moral authority” in this process, as it certainly is not without its own shortcomings among Europeans. It will nonetheless be worth monitoring these developments as the EU moves to reform online competition laws with its plans to introduce the Digital Services Act by the end of 2020. Meanwhile, the world waits with bated breath for the Commission’s decision on Google’s application to acquire health device company FitBit in December. Will the EU achieve its prized “digital sovereignty”? Perhaps. It will ultimately depend on how quickly the Commission can keep up with the latest technological developments, and the companies setting this agenda.