Later this week, the world will be watching as the United States and its European Union counterparts start to shape a shared approach to digital regulation through the new US-EU Trade and Technology Council’s (TTC) inaugural meeting in Pittsburgh, Pennsylvania. The transatlantic partnership is essential to address privacy and data collection concerns associated with digital platforms, but the Administration and Congress should recognize that every conversation about “Big Tech” offers an opportunity to strengthen America’s and Europe’s innovation economy.
The TTC has announced ten working groups covering challenges from global trade and green technology to human rights and access to digital technologies for small businesses. These issues require engagement and collaboration, especially the need for enhanced supply chain security and respect for Intellectual Property. Solutions based on shared values will yield the most effective results. Despite areas of disagreement, the transatlantic relationship has a history of successful collaboration driven by a shared commitment to democracy, pragmatic leadership by the United States is key to defend against the digital warfare being waged by ascendant authoritarian powers.
The COVID-19 pandemic shone a spotlight on vulnerable supply chains, showing just how easily China can use technology to threaten democracy and advance its own dominance on the global stage. The TTC should build safeguards that recognize this formidable opponent as we develop regulations for our connected world. This can help to combat the inherent risks that come with buying or using connected devices linked to China, which recent events have shown can be exploited for espionage targeting individual users, corporations and federal agencies.
Industry has an important role to play in navigating these issues, and some companies have taken steps to preemptively address policy questions aimed at them. Google launched an open-source initiative called the Data Transfer Project in 2018 in partnership with Apple, Facebook, Microsoft and Twitter to establish data portability between online platforms. Apple continues to show leadership in the data governance discussion, introducing the App Tracking Transparency prompt, which requires developers to ask users’ permission before tracking them across apps and websites owned by other companies, and implementing data minimization and on-device data processing to limit the data that the company can store or access on its servers. These initiatives demonstrate that the coordination of industry and government is a strong defense against technology that threatens security and fundamental rights.
A good example of this is the action by the Federal Trade Commission, which recently banned SpyFone, a mobile app available outside of the regular app stores. Spyfone secretly harvested users’ location and online activities through a hidden tracking capability, using real-time monitoring that is not approved for sale in any legitimate store since it violated privacy laws in multiple jurisdictions. The mobile industry saw the importance of keeping applications like SpyFone out of their digital stores, and they can contribute considerable resources and technological expertise to the development of solutions, but action by a federal agency was needed to order that the illegal surveillance app cease operations.
SpyFone shows the tension between minimizing unwanted collection of personal data and competition. Recognizing that there are tensions between antitrust, innovation, privacy, and security means we need a balanced approach that does not sacrifice any of these. We think this can be done, but not with proposals on the table now. More competition might promote innovation, but this should not be done at the expense of security or competitiveness with China. EU competition commissioner Margrethe Vestager has laid out Europe’s plans for the US technology industry, with the introduction of the European Commission’s Digital Markets Act, or the DMA. The DMA casts a broad net of regulations for “gatekeepers” that would have wide-ranging consequences for consumers on both sides of the Atlantic. The DMA favors traditional European-style regulation, which takes a bureaucratic and at times punitive approach. There is no shortage to European innovators or startups, but they can often face insurmountable regulatory hurdles.
This stands in stark contrast to the American antitrust framework, which has been guided by the consumer welfare standard for four decades. In June, Congress introduced a package of five antitrust bills that clearly followed the blueprints provided by the Digital Markets Act, copying its ex-ante regulatory compliance approach. European-style regulation might undercut American innovation strengths. American companies have a position of leadership in technology, with few European companies managing to achieve their level of success. If anything, policymakers should pursue the “Americanization” of Europe’s approach to antitrust laws, rather than the inverse. The United States must engage with European policymakers in Pittsburgh on a balanced approach before both sides are locked into adversarial policies that do not benefit either party.
Regulators need to recognize that it is no accident that the United States has such innovative tech companies. The focus on innovation and consumer services has yielded unparalleled growth. While the era of unregulated tech is over and new rules requiring transparency and consent are needed, recent regulatory zeal shows that American policymakers should not lean too heavily on their European counterparts. EU regulation made European tech companies uncompetitive, an outcome we must avoid in a conflict with China that has more to do with technology and innovation than military strength. With the TTC, the US has an important opportunity to steer the EU-US alliance toward pro-innovation regulation, strengthen cybersecurity and minimize harm to economies on both sides of the Atlantic.
Shane Tews is a nonresident senior fellow at the American Enterprise Institute (AEI), where she works on international communications, technology and cybersecurity issues, including privacy, internet governance, data protection, 5G networks, the Internet of Things, machine learning, and artificial intelligence.
James A. Lewis is a senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington, D.C.