01 Apr 2024 Search

(update 1 Aug 2024: last section)

Good post on Antitrust, Meta, Apple and more by Ian Betteridge.

The EU isn’t just concerned with today. It’s really taking Steve Jobs’ advice and listening to the Wayne Gretzky quote: it’s skating to where the puck is going, not where it’s been. Its aim is to ensure that two very large companies don’t own the market for smartphones to such a degree they can determine everything that happens in those markets, to their advantage. The EU is a capitalist body: its obsession is keeping markets open, and it will do anything it needs to do to make sure that happens.

From here in the USA, it looks to me like we need to put our understanding of European privacy and competition policy into context. We seem to spend a lot of time in the weeds trying to figure out what will be allowed by specific laws and regulations, and maybe we’re missing the big picture. The EU has two really big problems.

  • The EU’s most important problem is climate change, including the problem of climate refugees. Worst case is that Europe has to rebuild their infrastructure and agriculture while somehow dealing with 1.2 billion people trying to move there because their old home is unlivable now. None of the ways that the EU can address this problem are going to make everybody happy, and the EU somehow has to do them in a decentralized democratic system.

  • The EU’s most urgent problem is that Europe is being invaded by Russia—regular Russian forces in several eastern European countries, and economic, information, and network warfare (update: and terrorist attacks and infrastructure sabotage) clearing the way for them further west. Also a hard problem, partly because of the Putin regime’s ability to work the political system.

Big Tech isn’t in trouble in Europe because companies are failing to comply with whatever the EU laws are today. They’re in trouble because they’re more of a part of the problem than a part of the solution on the big issues. The EU says that they want social media companies to hire factcheckers to fight election fake news, they opened up a bunch of competition cases on platform companies, and, of course, they’re going to shut down Meta’s bogus pay or consent policy. if the pay or consent model actually worked it would turn the whole GDPR into a no-op. Every vending machine would have pay €2 and consent and pay €1002, no consent buttons. Pay or consent is not going to hold up in court but the Meta team that deployed it have already collected their bonuses and moved on.

But it’s not about the individual cases. If the EU throws the book at a Big Tech company, and the company successfully dodges it, what happens is that the EU makes a heavier book and throws harder. As long as a company is working for the Russians, for the fossil-fuel industry, and for divisive right-wing groups (yes, they overlap) then they’re going to have a problem in the EU. Someone in the EU is probably also reading the history of the US Republican party and direct mail—a party that had been a coalition of defense, free-market, and social conservative factions rapidly pivoted in the post-Goldwater years based on what works as direct mail (and now email and social media) copy. In the USA, it looks like direct mail, personalized, and surveillance advertising give advantages to fear-based and racially divisive messages that would work less well in other media. If that applies in Europe too, a crackdown on the surveillance industry makes sense even outside the context of the coming post-surveillance economic boom.

And yes, there’s an Al Capone effect going on here. The same Big Tech management teams that reward sexual harassment with big checks are also willing to monetize scams hosted in adversary countries and copyright-infringing sites run from adversary countries. I still don’t understand the appeal of Vladimir Putin fandom among tech thought leaders, but it’s there—and as long it persists, climate change and European security are the underlying problems for Big Tech in Europe, not any specific policies.

Update: can’t the US “tech” companies just leave Europe?

This keeps coming up whenever the Europeans try to regulate anything. The surveillance/cryptocurrency/LLM tech boosters say that big companies can just pull out of Europe, and then they’ll be sorry and beg the companies to come back because they’re missing out on all the technology and innovation.

That might have been a threat if the industry were still in a position to deny Europe the System/360, the i386, Unix, or Ethernet…but in case you haven’t noticed, Big Tech has been pretty much out of transformative innovations for a while. People aren’t lining up to buy the metaverse, NFTs, or LLMs (putting AI in a product even reduces purchase intentions) the way they did for Windows 95 and iPhones. If big companies block Europe, Europe’s alternatives look pretty good—technically good enough, and with enough less scam culture built in to be a win overall.

And whatever contender comes in to serve Europe will end up in a position to build network effects globally. The upstart doesn’t need a big starting market share or feature lead, just the ability to serve users that Big Tech can’t or won’t. In the USA we have less lard and more Linux support than you might expect.

  • Only a single-digit percentage of people in the US observe dietary restrictions on pork, but Oreo cookies are lard-free. If you buy a big pack of cookies for an event, the likelihood of someone in the group not eating pork is pretty high.

  • Desktop Linux is a pretty small fraction of the IT market, but all the video conferencing services support it. Even though the chance of a Linux user on any one call is small, the chance that an IT department will have to deal with some meeting organizer not being able to get some Linux participant on in any given day is pretty high.

If a Big Tech service pulls out of Europe, any competing service that can compromise to keep operating there will pick up the network effect win, as groups of people shift to whatever platform or forum can accommodate everyone. And it’s pretty clear they realize this—nobody at Meta has been threatening to leave Europe even as the pay or consent cases grind their way toward an outcome that allows no-consent users a partial free ride on the same service without the personalized/surveillance ads.