The Wall Street Journal - 03.09.2019

B4| Tuesday, September 3, 2019 **** THE WALL STREET JOURNAL.

Tim Cook in Brussels last year

attacked the “data-industrial

complex” and advocated for

tighter privacy regulation,

while Facebook has touted its

new efforts to police the con-

tent on its site.

“We want to work with gov-

ernments and policy makers to

design the sort of smart regu-

lation that fosters competi-

tion, encourages innovation

and protects consumers,” said

a Facebook spokeswoman.

Mrs. Von der Leyen, the

former German defense minis-

ter, in addressing the Euro-

pean Parliament before her

confirmation hearing in July,

said she was in favor of fair

taxes on tech giants that

“barely pay any taxes because

they play our tax system.”

If tech companies “want to

benefit [from Europe], they

have to share the burden,” she

said.

France recently approved a

tax on large tech companies,

and governments world-wide

are trying to negotiate inter-

national standards.

Tech companies, for their

New rules on AI and big

data, her agenda said, should

follow the “European way, bal-

ancing the flow and wide use

of data while preserving high

privacy, security, safety and

ethical standards.”

EU officials propose to po-

tentially restrict the use of fa-

cial-recognition technology

and to oblige companies by

law to flag whenever a phone

call or chat is made by a robot

or an algorithm.

New legislation also could

make platforms liable for self-

learning algorithms that start

making their own decisions. A

system of certification could

be implemented for uses such

as self-driving cars or medical

robots.

Companies, such as Ama-

zon, developing facial-recogni-

tion technology, say regulation

shouldn’t go too far. “New

technology should not be

banned or condemned because

of its potential misuse,” Mi-

chael Punke, vice president at

Amazon Web Services, wrote

in a blog post. Mr. Borggreen,

of the CCIA trade group, also

said that “too often the EU has

prioritized tech regulation

over tech innovation. Hope-

fully, the new EU leadership

will regulate based on fact, as-

sessment and stakeholder con-

sultation.”

Mrs. Von der Leyen pledged

to prioritize investments in AI,

through direct EU funding and

increased public-private part-

nerships. Many ideas for how

to accomplish this are under

debate.

Mrs. Von der Leyen’s

agenda also mentioned up-

grading safety and liability

rules for digital platforms, ser-

vices and products and for

completing the EU’s proposed

“digital single market,” which

would eliminate internet bar-

riers within the bloc just as

the EU’s single market has al-

ready done for goods and ser-

vices.

EU cyberspace is currently

divided by a patchwork of na-

tional regulations.

In one paper reviewed by

The Wall Street Journal, com-

mission officials dealing with

digital issues flag several ar-

eas where the lack of unified

EU rules bring additional costs

to companies and hamper the

takedown of illegal content.

The proposed solution is to

harmonize rules across the

bloc and create a dedicated

regulator to ensure oversight

and enforcement, including by

issuing fines.

But even before all these

new rules come into force—

which could take several years

of negotiations with national

governments and the Euro-

pean Parliament—existing and

new antitrust probes could hit

U.S. tech companies with more

multibillion-euro fines. EU an-

titrust officials have said they

are willing to share documents

and help out their U.S. coun-

terparts, as the Justice De-

partment is investigating sev-

eral tech giants.

Ms. Vestager, the outgoing

competition commissioner,

will be promoted in the new

commission to become one of

Mrs. Von der Leyen’s top dep-

uties.

—Sam Schechner in Paris

contributed to this article.

European Commission President-elect Ursula von der Leyen has said tech giants ‘play our tax system.’

KENZO TRIBOUILLARD/AGENCE FRANCE-PRESSE/GETTY IMAGES

BRUSSELS—The leadership
of the European Union is
changing over the next few
months, but the organization’s
scrutiny of U.S. tech compa-
nies likely isn’t.
The incoming head of the
EU executive arm is promising
new laws on artificial intelli-
gence and the use of big data
within 100 days of taking of-
fice on Nov. 1, as the bloc’s an-
titrust enforcer gathers evi-
dence in its probes into the
practices of companies includ-
ingFacebookInc. andAma-
zon.comInc.
The EU investigations,
started by departing EU com-
petition commissioner Mar-
grethe Vestager, examine how
Facebook and Amazon use
data gathered on their plat-
forms, and could eventually
lead to multimillion-dollar
fines. Both companies deny
wrongdoing.
In recent years,Alphabet
Inc.’s Google has been fined a
total of $9.4 billion in three
separate EU probes. A fourth,
relating to Google’s job-search
service, is currently at a pre-
liminary stage.
As the new commission
takes shape, President-elect
Ursula von der Leyen and her
team are sifting through inter-
nal proposals for stricter rules
in areas from limiting facial-
recognition technology to cre-
ating a dedicated multibillion-
euro fund to prop up the
European technology sector.
“There is a frenzy of pitch-
ing ideas to her,” said one offi-
cial familiar with the internal
discussions. A spokesman for
Mrs. Von der Leyen said she
hasn’t signed off on any of the
floated plans, as she is still or-
ganizing her team of commis-
sioners.
The tech companies have
said they generally welcome
greater oversight, though with
varying degrees of enthusi-
asm.Apple Chief Executive

BYVALENTINAPOP

EU Regulators See

No Letup for Tech

TheEuropeanUnionhasbroughtmultipleantitrust

casesagainstU.S.techcompanies.

Competition

probesagainst

U.S.tech

Initial

query

Formal

probe

Decision/

fine

Appeal

filed

Court

ruling

x2*

Googlejob

search

Facebook

AppleMusic

Amazon

Broadcom

Qualcomm

Googleshopping/

Android/AdSense

Appletaxes

inIreland

Intel

1 2 3 4 5

Sources: European Commission;

European Court of Justice; staff reports

*Intel's case was sent back to a lower

court, which initially upheld the EU fine.

part, say they are being sin-

gled out and argue all busi-

nesses should be treated

equally.

“For tax reform to be ambi-

tious and fair, it needs to be

global and cover all industry

sectors,” said Christian Borg-

green, vice president for Eu-

rope at the U.S.-based Com-

puter & Communications

Industry Association, a trade

group that includes Google,

Facebook and Amazon.

Mrs. Von der Leyen’s

agenda for the next five years,

which she published in July,

includes proposals for policy

areas including climate, de-

fense and rule of law but puts

particular emphasis on regu-

lating artificial intelligence.

Officials may curb

facial-recognition

technology and self-

learning algorithms.

TECHNOLOGY WSJ.com/Tech

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