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The European Commission wants Google to become less connected, the German government wants Facebook to use less data, and the French government wants to promote national champion industries. On a benign interpretation, these policies seem to be based on a basic misunderstanding of the business models underlying the modern tech industry. As I discuss below, there is room for a rather darker analysis of what is going on.
Google deals in connections. A search engine that does not allow its results to be ranked is useless. Facebook deals in data. Because of it, it connects people free of charge. If Facebook were to use less data, it would either be unable to allow its users to connect with one another, or it would have to charge them.
Even if the intentions of the European Union or many of its member state governments were not problematic — and they are — greater trouble comes from the way they are to be set in place: via antitrust. European antitrust, or competition, policy is especially salient now that the European Union is pursuing a “modernization” of its antitrust doctrine and enforcement apparatus.
In 2019, the European Commission, the EU’s executive body, published a report commissioned by its Directorate General for Competition on how to modernize antitrust. It suggests giving more leeway in doctrine, enforcement, and decision-making to EU competition authorities. Incidentally, the commission itself is such an authority — it is, at the same time, lawmaker, prosecutor, and judge (in the first instance).
The cornerstone of this “modernization” is inverting the burden of proof for tech, especially multi-sided business models (businesses in which customers can interact directly with each other). Thus digital platforms would need to prove that they are not dominant undertakings. If they fail to show that their business model is disciplined by the market, they must automatically comply with the special duties imposed on “dominant” players. These obligations include limits on price and product differentiation as well as norms on conduct.
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