By: Li Ziheng, Melnik Emil, Wu Meng Yu, Nebauer Dominik

What is and should be done in the EU about regulating in ICT?

Half a year ago the European Union commission sued Google for taking advantage of their monopoly position in advertisement with a fine over 2.4 billion Euro. More than a year ago Apple was sued to pay a fine of 13 billion dollars because of not paying taxes. Intel was sued for over a billion dollar for giving illegal discounts to OEMs. The practices of amazon are now under investigation. The performance of big tech companies sometimes conflicts with legal boundaries within the EU and some more regulations may be to set.

This text will shortly give an overview what is regulated by the EU in the digital market, when regulations are applied, and it shows the structural level of the regulating instances. It contents the monopolist critical perspective of EU-commissioner Margarethe Vestager, why there should be more competition regulation. Finally, some challenges coming upon the EU are discussed.

In which way aims the EU to regulate the IT-market?

According to fundamental treaties the EU aims to do the following. It is to promote the development and dissemination of these new technologies, to introduce a battery of rules to ensure customers and businesses have fair and affordable access to networks and services, and to remove barriers to competition.

The European Union has set up regulatory frameworks as from the Body of European Regulators for Electronic Communications (BEREC). BEREC advises the EU institutions on developing a better internal market for electronic communication networks and services. Plus, it forms links between national regulatory authorities(NRA) and the European Commission. The main objectives of BEREC are to develop and disseminate best practices among national regulatory frameworks, to assist these NRAs in the regulatory field, to deliver opinions on draft decisions, as well as to issue reports and provide advice on the electronic communications sector.

The EU developed a digital strategy as in the Digital Agenda for Europe. It aims mainly to connect the media sector and internet/telecommunication service providers. The EU so tries to strengthen internal communication practices within the EU, as you can see in examples as dropping Roaming or the unification of SEPA transitions.

To accompany the opening of the telecommunications market to competition, the EU has set a regulatory framework regarding electronic communications in line with technological progress and market requirements. This framework directive seeks primarily to strengthen competition in the electronic communications sector. It lays down the tasks of the national regulatory authorities (NRAs), as well as the principles underpinning their operations.

The rising monopoly position of the leading IT-companies goes hand in hand with a gain of power. One of the few institutions to control these companies so far is the European Union competitive commission. Plus, there are regulatory requirements regarding personal data-protection laws. Take European Union versus Facebook as an example, which is a NGO founded by Max Schrems – and you will notice the flaws in this very sensitive field. EU versus Facebook claims that facebook is apparently not complying with European Union data protection laws. The NGO was right about their claim and was confirmed by the Court of Justice of the European Union. The Safe Harbour Agreement between the European Union and overseas IT companies has been suspended.

The given collisions of big tech companies with the EU show a lack of controlling measures of the power of these companies. To overcome this and to find a fair solution for all stakeholders the European competition head commissioner Margrethe Vestager is actively promoting a new policy for dealing with these companies.

The necessity of more competition regulation

Margrethe Vestager is viewed by some as the heroine who fights against the world’s biggest tech companies. She explains why we need rules on competition after all.

Surely, competition drives better quality, lower prices and more innovation. However, fear of being replaced by other players and greed of more profits can be dangerous, especially when it comes to big powerful companies. Therefore, it is necessary to make sure that greed and fear doesn’t overcome fairness, so that companies cannot misuse their power to undermine competition.

Governments can also undermine competition by handing out subsidies to just the favorite few, by special tax treatments, like the tax benefits that Fiat, Starbucks and Apple got from some European governments. Those subsidies stop companies from competing on equal terms. They can mean that the companies that succeed, are the companies that got the most subsidy, the ones that are the best-connected, and not, as it should be, the companies that serve consumers the best.

What comes towards the EU?

So which circumstances in the IT market are recently connoted to be crucial to be faced by EU politicians? On the one hand, they must adapt to the occurrences, that are taking place in the United States. It will have implications for the European market, when net neutrality is cut. It allows Internet providers to prioritize one data request over another and may lead to charging people for specific services. The big American tech companies, whose sites are widely used in Europe, will have to adapt to this new legal setting. This may have repercussions on Europeans. Next the utilization of big data leads to critical question about fair accessibility. Furthermore, the Tech companies will most probably change its business policies in Europe, since the new legislation of transferring data out of Europe will be installed in 2018.

On the other hand, the IT market’s structural setting may have negative consequences for the social functioning of European states. Especially social network providers enable political actors to conduct communication strategies in elections, which are democratically harmful. Phenomena like fake News, filter bubbles and bot communication, that rise in the digital age may have cost the EU even one of its members.

Overall the EU will face many challenges in the new age of digitalization, big data and the powerful position of a few monopoly tech companies. It will have to set its goal into ensuring a fair competition in the market, protecting its citizens privacy, right to send/receive messages freely and independently and guarantee the functioning of a peaceful and democratic society. There’s still quite a lack in EU’s regulation frameworks to ensure these goals and there will be a constant need to adapt to the rapidly changing circumstances.