Europe ‘a global trendsetter on tech regulation’

Europe has emerged as a leader in regulating technology companies, proposing nearly 200 new policies in the first half of 2019, according to a wide-ranging global survey.

The review, conducted by the law firm Hogan Lovells, found more than 450 active legislative proposals across 16 regions including China, France, Germany, Japan, Mexico, Russia, South Africa, the UAE, the UK and the US. Topics ranged from antitrust, tech tax and content regulation to data access and calls to break up tech firms.

The proposals were put forward by governments, NGOs and industry bodies.

Overall, nearly half the proposals tracked originated in Europe, either at the EU level or within individual member states, making the region a trendsetter on regulatory topics. The US accounted for 28 per cent of regulatory proposals, and China ranked close to bottom with just 3 per cent of tracked regulation.

“This is important as the first mover in tech regulation has the potential to influence other jurisdictions and international organisations such as the G7 or the OECD,” wrote Falk Schoening, lead author of the report and an antitrust partner at Hogan Lovells, based in Brussels. He was referring to the impact of the EU’s GDPR rules on California’s data privacy laws.

US and Europe most concerned about the tech industry

Globally, antitrust enforcement was the most popular category, comprising 26 per cent of the proposals surveyed. “One of the most attractive things about competition law is the tools that antitrust authorities like the Competition and Markets Authority have,” said Mr Schoening.

“They can impose severe fines so it lets regulators play at the level of these big companies,” he added.

Germany is one of the most aggressive countries on antitrust, according to Mr Schoening. He pointed to a draft law introduced earlier this month that asserts for the first time in the world that a company will be considered dominant if it has access to data that is superior to others’ data sets.

Meanwhile, large US technology companies face five separate federal and state investigations into their corporate power in the US, probing whether Google, Facebook, Amazon and others have unfairly suppressed competition, and harmed consumers in the process.

“In particular, we expect increasing antitrust enforcement and regulatory activity regarding digital platforms, algorithms and big data, which is obviously not limited to Big Tech, but may affect any company active in the digital markets,” the report said.

Chart showing that competition is the biggest concern for the tech industry

Another area of regulatory concern is content control, specifically areas such as copyright, combating hate speech on digital platforms, and manipulation of elections. Anti-fake news and hate speech laws have recently been introduced or enacted in France, Germany and Singapore.

The UK is working on a draft law on online harms that would impose a duty of care on tech companies. This would force them to police content more closely on their platforms and accept liability for illegal content. “We are seeing a lot of noise in the UK, [but] is there any serious work being done to turn it into a workable regulatory framework? It’s not realistic at the moment,” said Charles Brasted, a public law expert and partner at Hogan Lovells in London, referring to the difficulty of drawing up regulation ahead of Brexit.

The study found that most regulatory proposals tracked — about 70 per cent — originate from incumbent governments, making it “more likely that many of the regulatory plans put forward will find a political majority and will be enacted”.

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