Europe’s rules also apply to Internet monopolists

Posted by Paul Barr

Punishment for Facebook Europe’s rules also apply to Internet monopolists

Facebook has lied to the EU Commission, but the punishment for it seems rather silly. If Facebook was a car driver, one might think that this is just a matter of parking wrong. The group from Silicon Valley has to pay 110 million euros, because he did not tell the truth when he took over the short message service Whatsapp. Of course, 110 million euros are a lot of money from the perspective of a normal person. Compared to the absurd purchase price of 16 billion euros that Facebook paid for Whatsapp, it is little; and that’s why the company pays the penalty rather quickly than being in public criticism.

The EU Commission is thus, albeit unintentionally, the signal to all Internet companies: Lies us happy if you want to expand. Trick if you think it necessary. Will not be so expensive for you, if you fly up. Because Facebook is not just any company, but has almost two billion registered customers: more than any other Internet company in the world, even more than Google, the search, video and data services probably use more people, but usually without logging in there , Facebook has a tremendous power of data, it knows mail addresses and friend lists, likes and dislikes, even the states of mind of its users.

Europe can not be dictated to the rules of the network

This data power has further expanded the company with the purchase of WhatsApp, with a messaging service that is used by now one billion people. Facebook had promised the EU Commission a careful handling of the data. It would not merge the social network and the messaging service, would not automatically create uniform profiles for users who use both; and you could not do that technically. Could you then – and did it two years later too.

EU imposes 110 million euro penalty on Facebook

Those responsible for the social network are said to have made false statements before taking over WhatsApp. The EU Commission wants to set an example with its decision. more …

The procedure corresponds to a pattern that can be observed again and again in companies from the American West Coast. They stretch (or even break) rules and laws – and see how far they get away with it. Maybe nobody says anything. Apple, Amazon and Starbucks have done so with their tricky tax models, their company constructs were once approved in Ireland, sometimes in the Netherlands or Luxembourg – but they were in contravention of EU law. Airbnb has done so and overruled existing rental rules in many European cities. Also the driving service Uber broke again and again right and its drivers against, o-tone of the Uber bosses, “an asshole called taxi” compete, although the German transport laws did not allow this so.

Innovation does not justify an intentional breach of the law

Now it is a good idea to discuss whether some laws in Germany are antiquated and no longer fit into the digital age – such as the requirement that taxi drivers know all the streets of a city by heart (as if there is no navigation system); or the requirement that limousine services return to their garage after each journey before being allowed to accommodate a new passenger (as if there were not enough traffic jams). But this does not justify a deliberate law break.

Europe therefore does well to create a legal framework for the digital world. Because the Internet must not be a space in which a few powerful corporations simply define what works – and what does not. That concerns the tax law: Who trades with data, has much more possibilities to trick with the taxes, than industrial companies, which must physically move goods. And also for monopolies other rules apply in the digital sphere: Whether Internet companies dominate a market, depends not so much on the turnover (the crucial size in the previous antitrust law), but on how much data they control. The new monopolists have a lot of data. So how should the rules be designed for the digital world? It must be prevented that Wildwestmethoden à la Uber make school. On the other hand, the question is worth noting whether some paragraphs created 50 or 100 years ago need to be modernized in order to make better use of the possibilities of digitization.

This differentiated approach represents an opportunity for Europe. The old world can counter the rampant net American-style net capitalism with its model of a new, digital world that is intelligently regulated. In the end, everyone profits from it and not just a few powerful internet companies.