Big Tech chafes at European privacy and antitrust initiatives

The news: Big Tech companies are struggling to contain a wave of antitrust and regulatory activity as government authorities and would-be competitors go on the attack.

  • Meta is threatening to remove Facebook and Instagram from Europe should the EU block the transfer of user data to the US, Bloomberg reports.
  • Google is being sued by Swedish company PriceRunner for €2.1 billion ($2.5 billion) over potentially anticompetitive practices relating to its shopping service, per Reuters.

A contentious battle: Meta and Google have consistently found themselves the targets of European regulators’ ire on both the antitrust and privacy fronts.

  • Meta was recently slapped with a £1.5 million ($2.1 million) fine over its acquisition of Giphy (along with an order to divest itself of the property) by the UK’s Competition and Markets Authority.
  • In November, Google lost an appeal of a €2.42 billion ($2.84 billion) fine levied against the company after it had been found to privilege its price comparison service over those of European competitors.
  • In 2021, the EU fined companies a total of $1.25 billion for breaches of the General Data Protection Regulation (GDPR), according to law firm DLA Piper—nearly seven times the amount fined in 2020. Meta received almost 20% of those penalties, thanks to a €225 million ($266 million) fine from Ireland’s data protection authority.

Companies fight back: In light of the aggressive actions by regulatory authorities, European companies are taking a bolder approach as they attempt to lessen Big Tech’s stranglehold on their industries.

  • A consortium of German publishers recently filed a complaint with the EU’s Commissioner for Competition in an attempt to stop Google from phasing out third-party cookies. The group alleged that Google’s planned cookie replacement would stifle competition and further entrench its dominant position.
  • Mikael Lindahl, PriceRunner’s CEO, didn’t mince words in an interview with Reuters, saying that Google is “still abusing the market to a very high extent” and that his company is prepared for a long, expensive legal battle.

Some cards left to play: However, Meta’s decision to issue an ultimatum to European authorities shows that it will take more than a few large fines to humble Big Tech.

  • While there is little to no chance of Meta actually pulling its apps out of Europe, its second-largest market, the company does have some leverage. In late 2021, Meta announced it would create 10,000 jobs within the EU to support its metaverse ambitions. If Meta decides to reduce its European presence, these jobs—and the company’s continued investment in its European operations—will be at risk.
  • Google, too, appears confident in its ability to see off PriceRunner’s suit, saying in a statement that it “look[s] forward” to defending its case in court.

The takeaway: As European authorities wield their regulatory power with increased assurance, Big Tech companies are having to take a more aggressive tack to fend off challenges to their way of doing business.

  • Thus far, regulatory bodies have relied on fines as their primary method of punishment. But Meta’s order to divest Giphy suggests that much tougher consequences could be on the horizon.