During a joint press conference in London with President Emmanuel Macron of France this week, President Trump threatened to impose tariffs on French goods such as champagne, in retaliation for a new tax on large tech companies. As he spoke, Macron’s digital affairs minister, Cédric O, was in Washington, DC, trying to build support for even stronger actions against Google and other tech giants.
“Tech platforms have a footprint in our economies and our democracies that is a huge challenge for public power,” O said, during a visit to WIRED’s offices in San Francisco, one stop on a week-long, cross-country trip that involved meeting lawmakers, regulators, and academics to discuss antitrust tactics. O says French and European ideas about restraining tech’s power are catching on in the US—and that France’s digital services tax is just the start.
Macron signed that new levy into law in July. It takes 3 percent of digital sales from companies with more than €750 million ($829 million) in global revenue and revenues in France of over €25 million ($27 million) in categories such as online ads or ride hailing. Despite the ire it has drawn from tech companies and Trump’s US trade representative, O describes it as a kind of warmup.
“The digital tax is politically and symbolically important, but from an economic and democratic point of view, it is a really, really small part of the problem,” O says. More important? Targeting the biggest tech companies—most of which are American—with new regulations to prevent them stifling competition and damaging democracy. “We’ve designed our regulatory framework for the industrial age, and at some point it’s not relevant any more,” O says.
Unlike presidential candidates Elizabeth Warren and Bernie Sanders, O doesn’t want to break up tech companies. He instead quotes a slogan he says he heard this week from the man who used to be America’s top internet regulator, erstwhile Federal Communications Commission chair Tom Wheeler: “Don’t break them up, break them open.”
O says that as with banks, governments could identify the “systemic” tech companies with the most power and target them with extra regulations. Those could include being forced to allow competitors access to their services or data for free or at controlled rates, a ban on acquisitions, and even specific hate-speech rules.
Such ideas are unlikely to be popular with US tech companies or the top officials and tweeters of the Trump administration. But O claims that support for reforming antitrust rules to rein in tech is growing in the US, citing discussions he had this week with figures including Wheeler, Senator Brian Schatz (D-Hawaii), who favors a government crackdown on tech firms, and Stanford economist Doug Melamed, formerly a top lawyer on the Justice Department’s antitrust case against Microsoft.
The prospects of a significant US tech crackdown will be decided in November 2020. Regardless, O predicts an international assault, warning that the EU is poised to toughen its stance on the tech industry.
The bloc recently appointed a fresh set of leaders to its executive branch, the EU Commission, which added a new position created specifically to work on “technological sovereignty”. It is filled by Denmark’s Margrethe Vestager, who gained notoriety as the EU’s competition czar with investigations and fines of Google, Facebook, and Apple.
O calls Vestager a “big ally” and predicts the EU will make “huge progress” on tech regulation in coming months. He also acknowledges that for Europe to truly change the trajectory of tech will require more than just government action—it also needs to incubate tech giants of its own.
O laments that France has produced only a couple of tech IPOs larger than a billion euros in the past 23 years. “If you want to be able to set the standards in the world, you should be able to make new leaders emerge,” he says.
The French government hopes new regulations can help change that by making it easier for startups to gain a foothold. It has a new €5 billion ($5.5 billion) fund for French startups. O says improved tech policies are already helping to inspire more French tech workers overseas to think about moving home—as did the recent electoral wins for Trump and Brexit.
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