Senior figures in the governments of France, Germany, and the Netherlands have signed a letter of complaint to the European Union, saying its proposals for future technology regulation are not strong enough to take on major international tech giants, and that they lack ambition.
The European Commission describes the Digital Services Act and the Digital Markets Act as aiming to “encompass a single set of new rules applicable across the whole EU to create a safer and more open digital space”.
The aim of the updated rules is “to create a safer digital space in which the fundamental rights of all users of digital services are protected” and “to establish a level playing field to foster innovation, growth, and competitiveness, both in the European single market and globally”.
But the Financial Times said it has seen a document, signed by Bruno Le Maire, the finance minister of France, Mona Keijzer, the economic affairs minister in the Netherlands, and Germany’s minister for economic affairs, Peter Altmaier, demanding that legislation is stronger, particularly when it comes to scrutinizing mergers where there is a suggestion of attempts to stifle competition between rival companies.
Takeovers of fledgling companies designed to suppress competition are known as killer acquisitions, and first appeared in the pharma sector before becoming increasingly popular in the world of technology.
The Competition Policy International website describes these as being “where companies allegedly acquire startups to acquire their technology, either to quell a nascent threat, or to integrate it to their own offerings, further entrenching their dominance”.
The letter signers want the new legislation to include provision for the scrutiny of takeovers “where (big companies’) targets have little revenue but potentially valuable technology.”
Examples cited include Facebook buying Instagram and WhatsApp in their early stages, before they went on to their huge market share, which, had they remained separate, could have seen them become rivals to Facebook.
They also want more powers for individual countries to challenge technology companies over how they run their businesses. Earlier this week, regulators in Germany began an investigation into Google’s position of market dominance, and how it deals with user data, a move that comes hot on the heels of the launch of similar probes into how Amazon and Facebook go about their business.
New regulations introduced in Germany at the start of the year meant the Federal Cartel Office can ban companies of “paramount significance for competition across markets” if they are seen to be behaving in an anti-competitive manner. Google denies breaking any of Germany’s competition laws.
Brussels, however, is not keen on individual member states having too much power because it believes that would lessen the effectiveness of central efforts, and make big technology companies less likely to agree to its rules.