Feb 19, 2020
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Lacking Its Own Digital Giants, Europe Plans New Approach

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LONDON — Across the digital economy, Europe has been missing.

Apple, based in California, and Samsung, from South Korea, make the most popular phones in Europe. Facebook owns the most widely used social networks, Google dominates online search and advertising, and Amazon controls e-commerce. European companies run their businesses on cloud infrastructure from Amazon and Microsoft. The region’s wireless networks are largely made with equipment from the Chinese giant Huawei.

The European Union on Wednesday outlined an attempt to restore what officials called “technological sovereignty,” seeking tougher regulation of the world’s biggest tech platforms, new rules for artificial intelligence, and more public spending for the European tech sector.

Officials said the effort is a “generational project,” and the ideas reflect a growing concern among European leaders that countries in the region are overly dependent on services provided by companies based elsewhere. With the global economy becoming ever more centered around technology, European countries would have a harder time creating jobs and generating tax revenue to fund government services.

“We want to find European solutions in the digital age,” Ursula von der Leyen, the president of the European Commission, the executive branch of the European Union that is crafting the policy, said at a news conference in Brussels.

But the proposals introduced on Wednesday were clearer in identifying the problem than proposing specific solutions. The commission said it would begin a consultation period that will take months before any concrete legal proposals are ready. The debate is expected to last through much of the year.

Officials laid out some broad ideas, to be debated in the months ahead, that suggest authorities will seek to nurture homegrown businesses by taking on the giants from overseas — potentially setting up more trade disputes with Washington.

Companies that have become “gatekeepers” between businesses and customers — like Amazon for shopping, Apple’s App Store, Facebook’s social network and Google’s search engine — will face more scrutiny. A particular focus, officials said, will be on the data they hold that could give them an unfair advantage over rivals.

Artificial intelligence technology — in which computers are being trained to perform increasingly complex tasks — would also receive fresh government oversight, especially where the automated systems create harmful risks, such as in health, transportation and policing. The commission said artificial intelligence systems in these “high risk” areas would have to be independently tested and certified before they could be used in the 27 countries of the European Union.

“A.I. is not good or bad in itself,” Margrethe Vestager, the European Commission vice president who oversees the digital policy, said at a news conference in Brussels. “It all depends on why and how it is used.”

Ms. Vestager called for more scrutiny of how facial recognition technology was being deployed across Europe.

Policymakers also outlined standards for industries to share data within the European Union, making it easier for companies and researchers to pool information they collect to better compete against the tech companies that control much of the world’s data.

Europe’s ability to establish itself as tech-industry leader will be very difficult in the face of competition from companies in the United States and China that may have more experience and resources, said Kevin Allison, who studies the intersection of technology and geopolitics at Eurasia Group in Berlin.

“It is one thing to have ideas; it is one thing to even have a well-thought strategy — but implementing and executing the ideas is the really hard part,” said Mr. Allison. “It’s where Europe has struggled.”

Mr. Allison said Europe’s proposals could face resistance in Washington, where there were threats of retaliation by the Trump administration against a French effort to tax American tech giants. “This is just going to further fuel U.S. concerns about Europe,” he said.

The debate has gotten the attention of the tech giants. Mark Zuckerberg, Facebook’s top executive, was in Brussels on Monday to meet with officials about the proposals. Top executives from Apple, Google and Microsoft have also visited the European capital over the past several weeks.

The proposal leaves many questions unanswered, including whether the European Union will seek to regulate harmful internet content, a contentious topic that raises concerns about free expression online. Some leaders in Brussels would like to hold companies like Facebook, Google and Twitter more accountable by removing some of the protections that keep them from being held legally liable for user-generated posted on their platforms.

Europe has been a world leader in technology regulation, including privacy and antitrust, influencing how countries elsewhere are reacting to the power and influence of the world’s biggest tech platforms. But as Europe has created a reputation as the world’s most aggressive watchdog of Silicon Valley, it has failed to nurture its own tech ecosystem. That has left countries in the region increasingly dependent on companies that many leaders distrust.

In Europe, the effort to support the local tech industry is part of a broader debate about the role the government should play in giving European businesses an advantage over foreign competitors. While officials in some countries, including France, Germany Italy and Poland, have called for more state intervention in the economy, others, including Ms. Vestager, have been more wary.

Priya Guha, who works at the venture capital firm Merian Ventures and was previously the British government’s top liaison to Silicon Valley, said Europe was attempting to balance the potential harms of modern technology while bolstering its position in the digital economy.

“Europe is trying to consider the impact on society whilst maximizing the benefits,” she said.

Adam Satariano reported from London, and Monika Pronczuk from Brussels.

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