When it comes to its digital future, Europe could suffer a double defeat

In conjunction with the outlining of the European Union’s strategy to create a single digital market, a lot has been written and said about the difficulties of the continent to establish strong technology companies that are able to compete with the big tech giants of the Silicon Valley.

This failure to produce a significant number of big digital players with international importance is causing wide-reaching fear that Europe’s chances for future growth and prosperity are decreasing. But the absence of forward-looking Internet juggernauts from Europe does not only raise questions about where the economies of the region are heading, but could also cause major damage to the core of the ecosystem where all this innovation is supposed to come from.

No big tech companies means no powerful lobby

The problem: Since not many innovation-minded billion Euro Internet companies from Europe exist, there is a severe lack of a strong, influential local lobby for innovative technology and an open Internet.

Generally one has reason to be critical towards intense lobbying efforts. Too often money and personal influence is used to push through laws or regulations which only benefit those who finance them. However, not making sure that lawmakers get to hear your point of view likely means losing, because the opposite parties for sure have their smart and convincing lobbyists. So for now, whether one likes it or not, lobbying is essential.

The U.S technology companies are pouring millions each year into lobbying. The Silicon Valley engages an “army of lobbyists” in Washington, as Recode recently put it. Google allegedly has become America’s biggest corporate lobbyist. By doing that the industry ensures that U.S. Politicians and regulators are forced to hear their concerns. Meanwhile, other sectors are highly active at the lobbing front themselves. Despite the pro-net neutrality efforts of Google and Microsoft, the telecommunications companies invested much more money on campaigns against net neutrality.

In Europe, the incumbents lobby better

Europe lacks the kind of comparatively well funded young technology companies that are forceful and dynamic yet mature and established enough to engage on an advanced level of lobbyism. The telecommunications providers, the entertainment industry and the publishing sector on the other hand do know very well of the importance of lobbying, they are skilled in it, very well connected and they move forward with pressure. Successfully, considering the protectionist agenda that European Union is following. When net neutrality or the scheduled elimination of roaming fees are being questioned by European Politicians or when ancillary copyright laws are being created to protect publishers through wide-reaching interventions into the mechanism of the web, then one explanation is that the opposition to these initiatives simply is too weak and harmless. Apart from the American tech companies of course. But their interests are not necessarily aligned with those of the citizens and digital economy of Europe. It is also unclear how effective their activities in Brussels are considering the impression of a climate of wide-spread animosity against the U.S. companies.

There is a risk that the old players and gatekeepers in Europe will find a way to make sure that all the future innovation that is being created within the digital economy has to play by their rules, not the rules that would be best suited to capitalize on the new possibilities and maximize the benefits for all members of the society.

In the end, Europe might be facing a double defeat: Its industries will be eaten up by the digitization and faster moving giants from the U.S. and China, but the legal, administrative and technological framework needed to fight back will have been crippled by the incumbents who were successfully lobbying for their interests while the opposite side just had some petitions.

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