Mark Zuckerberg’s last official trip to Brussels took place shortly before the pandemic broke out. The founder of Facebook entered the headquarters of the European Commission with a white paper under his arm. He was determined to demand fewer rules on content and, in what he considered a gesture, he opened up to discuss a digital rate. Those claims barely had a run.
The message he came across was blunt:Brussels does not have to adapt, but rather the opposite. And taxation is not negotiable. “Pay taxes where you should,” French Commissioner Thierry Breton told him emphatically just two months later. The Commission continues to try to curb the enormous power of Big Tech, which has only grown in the wake of the pandemic. These are the five great fronts open in Brussels.
Seven of the 10 largest global corporations are technology. Of these, five are American (Apple, Microsoft, Amazon, Google and Facebook) and two are Chinese (Tencent and Alibaba). None European. Teleworkand the confinements have fueled the business of these firms, allowing them to take in just a few months the leap they had hoped to achieve in years.
Brussels is closely monitoring them so that this power does not translate into market abuse that almost automatically drives out new companies. Vice President Margrethe Vestager has warned of the need to act quickly to prevent, in such a volatile environment, that handful of companies sweep away the competition.
This urgency has meant that it has proposed a law that empowers it to require a company to sell part of its business in the event that it implies absolute dominance of the market.
The virtual business has allowed technology companies to take advantage of the fiscal holes that exist in the European Union to pay less. Nothing even. According to Brussels, the average tax rate for these companies is just 9.5%, while traditional companies assume 23.5%.
The large volume of sales that these corporations move and the displacement of the business towards the digital world represent a loss of income for the EU treasuries. Brussels until now has been trying to put an end to fiscal creativity by declaring state aid illegal, which it considered to place these companies at a clear advantage over the rest.
The most notorious case was that of Apple, which forced to return 13,000 million to Ireland. However, those proceedings ran into the Luxembourg court, which has overturned several of those decisions, including Apple. The project of creating a minimum tribute to Societies on a global scale can now serve Brussels on a platter with the possibility of finally closing in on big technology.
- Fake news
The European Commission follows the spread of fake news with concern which, in his view, are only undermining the foundations of European democracy. The attention of Brussels is greater as a result of the pandemic, given the enormous amount of hoaxes that circulate on social networks in a time of emergency. “The pandemic is also an infodemic.
It is accompanied by a huge wave of misinformation and deception of consumers ”, recently warned Vice President Vera Jourová, in charge of Values and Transparency. The EU sees Russia and China behind the spread of some falsehoods, especially those that want to destabilize European governments. However, it wants technology companies to assume their responsibility as well, including messaging companies such as WhatsApp. Brussels wants these companies to join the European code of good practice for, for example,
Brussels doesn’t just want platforms to help end hate speech on the internet. It also aims to ensure that they respect the privacy of their citizens, who on countless occasions have to agree — without reading them — to give up parcels of privacy in exchange for accessing services.
The EU has already adopted the European Data Protection Regulation (known by its acronym in English, GDPR), which has become the world reference. According to The Wall Street Journal, Amazon faces a fine of 425 million dollars (about 350 million euros) for allegedly having violated those rules by collecting and storing data from European citizens for commercial purposes.
- Data management
92% of the data of European citizens and companies is in the hands of North American and Chinese corporations, according to the CEPS think tank. Millions of sensitive references are, therefore, on servers in other jurisdictions, with the risk that their governments may force them to provide them at any time.
Yet data is also the raw material that gives those companies more ammunition to fuel their algorithms and keep growing. Paris and Berlin, which see this phenomenon as a threat to European sovereignty, have set in motion the creation of a large European cloud to store the notes of large companies. The recovery fund should be the great lever to create the necessary infrastructures to put an end to this data leak.