Economic cost of new EU tech rules could top $100.5 billion, study says
By Foo Yun Chee
© Reuters/REUTERS FILE PHOTO FILE PHOTO: The logos of Amazon, Apple, Facebook and Google
BRUSSELS (Reuters) - The European Union's plan to rein in U.S. tech giants with new rules could cost the 27-country bloc as much as 85 billion euros ($100.5 billion) in economic growth, Brussels-based think tank ECIPE warned. Under the proposed rules, Facebook , Alphabet unit Google, Amazon and Apple could be forced to share data and banned from favouring their own services.
In a study sponsored by Google, due to be published this week and seen by Reuters, the European Centre for International Political Economy (ECIPE) said changing the regulatory approach could have a chilling effect on the EU economy.
"The economic impacts of shifting from ex-post to ex-ante in the online services sector as stipulated by the proposals of the Digital Services Act is to a loss of about 85 billion euros in gross domestic product and 101 billion euros in lost consumer welfare based on a baseline value of 2018," the think tank said.
"Also, it will reduce the labour force by 0.9%." The figure of 85 billion euros is equivalent to 0.5% of the bloc's GDP.
ECIPE said it looked into ex ante regulations of general-purpose technology, in particular the telecoms industry, and then replicated the results for online platforms to come up with the figures.
The study cited the risks of ex ante regulations where companies are told what to do before any competitive harm or market failure is proven.
"Ex ante approaches are poorly fitted for sectors that are rapidly evolving or to regulate low-risk general-purpose technologies," it said.
ECIPE said the EU legislative framework was not designed for rapid adjustments of rules nor was it clear what market failures the bloc wants to address with new rules or that these could not be resolved once harm is proven.
The European Commission will publish the rules on Dec. 2, after which it will need to be reconciled with proposals from EU countries and the European Parliament before they become legislation.
(Reporting by Foo Yun Chee; editing by Emelia Sithole-Matarise)
Google steps up campaign against EU push for tough new tech rules
By Foo Yun Chee
BRUSSELS (Reuters) - The European Union's plan to rein in U.S. tech giants with new rules could cost the 27-country bloc as much as 85 billion euros ($100.5 billion) in economic growth, Brussels-based think tank ECIPE warned. Under the proposed rules, Facebook , Alphabet unit Google, Amazon and Apple could be forced to share data and banned from favouring their own services.
In a study sponsored by Google, due to be published this week and seen by Reuters, the European Centre for International Political Economy (ECIPE) said changing the regulatory approach could have a chilling effect on the EU economy.
"The economic impacts of shifting from ex-post to ex-ante in the online services sector as stipulated by the proposals of the Digital Services Act is to a loss of about 85 billion euros in gross domestic product and 101 billion euros in lost consumer welfare based on a baseline value of 2018," the think tank said.
"Also, it will reduce the labour force by 0.9%." The figure of 85 billion euros is equivalent to 0.5% of the bloc's GDP.
ECIPE said it looked into ex ante regulations of general-purpose technology, in particular the telecoms industry, and then replicated the results for online platforms to come up with the figures.
The study cited the risks of ex ante regulations where companies are told what to do before any competitive harm or market failure is proven.
"Ex ante approaches are poorly fitted for sectors that are rapidly evolving or to regulate low-risk general-purpose technologies," it said.
ECIPE said the EU legislative framework was not designed for rapid adjustments of rules nor was it clear what market failures the bloc wants to address with new rules or that these could not be resolved once harm is proven.
The European Commission will publish the rules on Dec. 2, after which it will need to be reconciled with proposals from EU countries and the European Parliament before they become legislation.
(Reporting by Foo Yun Chee; editing by Emelia Sithole-Matarise)
Google steps up campaign against EU push for tough new tech rules
By Foo Yun Chee
© Reuters/Arnd Wiegmann FILE PHOTO: Logo of Google is seen in Davos
Alphabet Inc unit Google has launched a 60-day strategy to counter the European Union's push for tough new tech rules by getting U.S. allies to push back against the EU's digital chief and spelling out the costs of new regulations, according to a Google internal document.
The European Commission will publish rules called the Digital Services Act (DSA) on December 2, after which they will need to be reconciled with proposals from EU countries and the European Parliament before they become legislation.
The proposal has triggered intense lobbying from U.S. tech giants and even some European tech peers worried about the impact on their business models.
The objective is to "remove from the Commission proposal unreasonable constraints to our business model, our ability to improve our products or roll out new features/services," the document, dated October and seen by Reuters, said.
When asked about the document, Google said new rules should take into account that people and companies are asking more from tech companies, rather than less.
"As we've made clear in our public and private communications, we have concerns about certain reported proposals that would prevent global technology companies from serving the growing needs of European users and businesses," Karan Bhatia, vice president, global government affairs and public policy, said.
The paper proposed increasing the pushback against European Commissioner for internal market Thierry Breton, who is in charge of the DSA, by reaching out to the U.S. government and embassies with the message that the new rules threaten transatlantic relations.
It also suggested playing on potential concerns at the Commission's competition unit by saying the DSA threatens its power. Another leg of the strategy is to spell out the costs to consumers and businesses.
The 18-page document also proposed enlisting as allies EU countries and European online companies such as Allegro, Trivago, booking.com, Zalando and REWE.
(Reporting by Foo Yun Chee; edting by Edward Tobin)
BETA
The European Commission will publish rules called the Digital Services Act (DSA) on December 2, after which they will need to be reconciled with proposals from EU countries and the European Parliament before they become legislation.
The proposal has triggered intense lobbying from U.S. tech giants and even some European tech peers worried about the impact on their business models.
The objective is to "remove from the Commission proposal unreasonable constraints to our business model, our ability to improve our products or roll out new features/services," the document, dated October and seen by Reuters, said.
When asked about the document, Google said new rules should take into account that people and companies are asking more from tech companies, rather than less.
"As we've made clear in our public and private communications, we have concerns about certain reported proposals that would prevent global technology companies from serving the growing needs of European users and businesses," Karan Bhatia, vice president, global government affairs and public policy, said.
The paper proposed increasing the pushback against European Commissioner for internal market Thierry Breton, who is in charge of the DSA, by reaching out to the U.S. government and embassies with the message that the new rules threaten transatlantic relations.
It also suggested playing on potential concerns at the Commission's competition unit by saying the DSA threatens its power. Another leg of the strategy is to spell out the costs to consumers and businesses.
The 18-page document also proposed enlisting as allies EU countries and European online companies such as Allegro, Trivago, booking.com, Zalando and REWE.
(Reporting by Foo Yun Chee; edting by Edward Tobin)
BETA
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