EU Focuses Regulation on Competition Commissioner
Former ECB President Criticizes, "Innovation Needed for Economy"
Apple and Google Lose Lawsuit Against Fines
Attention on Whether Policies Will Change in von der Leyen's Second Term
The European Union (EU) has found itself in a dilemma over whether to regulate the technology sector, including big tech companies. While the EU has been creating global standards by pressuring IT companies through regulations such as the 2018 General Data Protection Regulation, voices are now emerging that the policy direction should shift toward digital innovation to catch up with economic powerhouses.
Bloomberg reported that this dilemma faced by the EU is becoming apparent on the surface in Europe. First, on the 9th (local time), Mario Draghi, former President of the European Central Bank (ECB), called for a halt to advanced technology regulations and urged a focus on innovation and development. In the report "The Future of EU Competitiveness," commissioned by the European Commission, he emphasized that new investments of 750 billion to 800 billion euros annually (approximately 1,180 trillion won) are needed to compete with the United States and China. He argued that to overcome declining productivity and economic recession, the EU must stop its current technology regulations and directly develop advanced technologies.
Former President Draghi also proposed establishing a separate EU semiconductor strategy, including joint support for the semiconductor sector through the EU budget, fast-track approval of new projects, and the creation of an "EU Semiconductor Certification System" to promote joint and private bidding projects within the region.
These remarks by former President Draghi effectively targeted the technology regulations that the European Commission has been implementing. Over the past decade, the EU, led by Competition Commissioner Margrethe Vestager, has argued that monopolies must be prevented by targeting big tech companies. They believed that creating a fair competitive environment would lead to technological innovation within the EU, and accordingly enacted related laws such as the Digital Services Act (DSA) and the Digital Markets Act (DMA).
By continuing these policies, the EU has solidified its global leadership as a regulatory authority in IT. The term "Brussels Effect" was coined to describe how European rules have been adopted as global standards.
As if to demonstrate this, on the day after Draghi’s announcement, on the 10th, the European Court of Justice (ECJ), the EU’s highest court, ruled in favor of the European Commission in lawsuits filed by Apple and Google challenging EU fines. As a result, Apple faces a massive fine of 14.3 billion euros, and Google 2.4 billion euros. These fines were imposed by Commissioner Vestager in 2016-2017.
Commissioner Vestager said immediately after the ECJ ruling, "This lawsuit is symbolic in showing that even the most powerful tech companies must be held accountable," adding, "No one is above the law."
This response contrasted with former President Draghi’s statement the previous day in his report, where he pointed out that "policy enforcement aimed at creating a level playing field can harm innovation," criticizing the European Commission’s past-oriented policy stance. Draghi also emphasized the need to allow mergers in various fields from defense to telecommunications and to protect multinational venture companies in the artificial intelligence (AI) sector for the sake of innovation.
Bloomberg evaluated, "Europe once prospered in the digital and internet era with mobile innovation leaders like Nokia and Ericsson in the 1990s," but later lost that position to the United States. It added, "(These recent) two events summarized the dilemma facing the EU," and "While the EU needs to expand its digital sector to catch up with economic powers like the US and China, how it does so is crucial."
The opposing views of former President Draghi and Commissioner Vestager on the technology sector are expected to spark intense debate within the EU for the time being. Attention is expected to focus on whether the second term of Ursula von der Leyen’s government, starting after November this year, will strengthen technology regulations as they are or pursue technological innovation in the process of policy formulation.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
