The 27-member bloc has been at the forefront of tightening the rules on big technology players and it’s showing no signs of changing that approach.
While the European Union may lack tech giants, it’s not short on rugged regulation for the sector. The 27-member bloc has been at the forefront of tightening the rules on big technology players and it’s showing no signs of changing that approach. More regulation is in the works and the Silicon Valley superpowers like Google may soon have to adapt their business models as a result. «This EU potential to shape business models can be huge. And it’s remarkable that it has an extraterritorial aspect to it: firms abiding by European regulations usually abide by it worldwide for operational reasons,» Jeremy Ghez, an associate professor of economics at H.E.C. Paris, told CNBC via email. This was the case with Europe’s data protection rules, known as GDPR, which was introduced in 2018. The landmark regulation gave citizens a stronger say over what firms could do with their data and also served as inspiration for lawmakers outside the bloc, including in Brazil and Australia. In addition, it also spurred more discussions on data protection in the United States. Although there is not a data privacy law at a federal level yet, California in 2020 became the first state to introduce personal data rules similar to Europe’s GDPR. «In a sense, European law can increasingly become the law of the land everywhere. And Chinese tech giants looking to penetrate the European market will need to abide by these regulations. This explains why the EU is becoming the world’s top tech regulator,» Ghez said. But the EU has gone a step further since implementing GDPR. In December, it presented a new plan that will force tech giants to take responsibility for the content on their platforms, and it will also ensure there is fairer market competition given how dominant some of these companies have become.
