While you might drive an Audi and shop at Ikea, you likely can’t even think of a European Internet company. Some would argue that the EU’s strict privacy regulations inhibit Internet entrepreneurship in the continent, but there seems to be something else going on since they don’t seem to keep U.S. firms from doing business there. Well, just barely.
A couple of years ago, a German state declared Facebook’s “Like” button illegal arguing it violated EU privacy regulations. And strong backlash by citizens who apparently don’t like being photographed in public forced Google to abandon its Street View service in Germany.
The EU is now considering strengthening their privacy rules even further. On the agenda are proposals like the “right to be forgotten,” which is just what it sounds like: a new human right to have any information about you online deleted. (Good luck with that.) There’s also a French proposal to tax the kind of personal information collection that powers Facebook, Google, and just about every other free service you use online. It’s unclear if that would result in less data collection or whether the cash-strapped French government might encourage more of it.
It’s not just a bizarre obsession with privacy that afflicts the European Internet; it’s also rank protectionism. Across the continent, for example, there have long been howls from traditional publishers about Google News, which indexes their websites and sends them most of the traffic they receive. Even though sites have always been free to remove themselves from inclusion in Google’s search index, European publishers have nevertheless consistently demanded that Google pay them to link to their content. Just as the EU was coming close to approving such legislation, Google capitulated to French publishers and signed an $80 million deal (literally at a palace signing ceremony with Chairman Schmidt and President Hollande) to “help publishers develop their digital units.”
In France it’s also illegal to discount a book more than five percent off the list price. In Germany it’s illegal to discount altogether. (Seriously.) Which means that not only are Amazon’s low, low prices not available, but its standard offer of free shipping on orders over $25 is verboten. It gets worse. As a result, not only does almost no one in France or Germany (or in much of Europe) buy books online, they also don’t buy ebooks. While ebooks account for almost 20 percent of the U.S. book market and growing, it’s about 0.5 percent of France’s. E-reading is simply not a thing in Europe.
And then there are the speech laws. Racist speech is illegal in France, Germany and much of Europe. As a result, Twitter is now facing court orders to unmask those responsible for forbidden tweets. It’s unclear whether Twitter will comply. Such an anti-racist impulse is understandable, but those laws are more than a little bit incompatible with the massively democratizing power of the Internet.
Or maybe they just don’t have the right system in place. The European Commission spent nearly half a million dollars studying how to “reduce terrorist use of the Internet.” After two years of consultations, the project group’s final report suggested “a ‘flag this as terrorism’ content button in Web browsers.” What happens when a site has been flagged? It’s not clear. It might get removed, but not if that would violate free speech rights.
One doesn’t have to have a U.S.-centric view of privacy, competition policy, or free speech to notice the dissonance between European mores and the digital economy. One assumes Europeans want to enjoy the benefits of the Internet, but they also seem consumed with ensuring that nothing of the old order is changed—let alone destroyed—in the process. They are the continental incarnation of what Virginia Postrel calls stasis—they are unwilling to accept the trade offs that come with progress and instead hopelessly try to plan around all discomfort.
It won’t work. While the rest of the world has their foot firmly on the gas pedal, Europe is constantly pulling on the emergency break. It’s only a matter of time before they crash.