Europe’s Internal Debate Slows Push to Limit Big Tech’s Market Power
Europe’s Struggle to Balance Tech Sovereignty and Market Competition
By Foo Yun Chee
Divisions Among European Leaders
BRUSSELS, May 27 (Reuters) - European leaders are divided on how far to go in curbing Big Tech as they weigh momentous decisions over giving EU firms preferential access to mobile satellite spectrum and limiting large multinationals' access to EU cloud tenders.
Spectrum Access and Cloud Tender Decisions
On Tuesday, Reuters reported Brussels was likely to leave an opening for Elon Musk's Starlink and Amazon's low-earth-orbit satellite business Leo to acquire lucrative European mobile satellite spectrum next year as a result of a compromise that will reserve the bulk of frequencies for European firms.
A separate decision on EU cloud tenders set for June 3 is expected to temper the influence of U.S. firms such as Amazon, Alphabet's Google and Microsoft, which dominate the global cloud market with a combined 63% share.
Promoting EU Tech Players
Both potential moves reflect Europe's efforts to strengthen the bloc's tech sovereignty by promoting EU tech players, driven by concerns over China's technological rise and the dominance of U.S. tech giants at a time of uncertain transatlantic ties.
Internal Debate on Strategic Approaches
European capitals are, however, divided over how hard and fast to move. Some officials advocate going aggressively to build European capacity, while others fret about a possible backlash from Washington and Europe's ability to plug the gaps.
Advocates for a Robust "Buy European" Policy
Those pushing for a more robust "Buy European" posture include EU industry chief Stephane Sejourne, who wants a bigger role for European firms, and EU defence chief Andrius Kubilius, who believes military and defence needs require preferences for European players, according to two people familiar with the debate.
Calls for Clear Rules Over Exclusion
Finnish EU tech chief Henna Virkkunen, meanwhile, maintains Europe should impose clear rules on all companies rather than exclude non-European ones. The sources said Virkkunen's approach was likely to prevail given she was the one directly responsible for the issues that were now being discussed.
The European Commission did not immediately respond to a request for comments from Sejourne, Kubilius and Virkkunen.
Investment Gaps and Legislative Challenges
A €1 Trillion Investment Gap vs the U.S.
Concerns that sensitive European information is vulnerable to bad actors and that the region is trailing the U.S. and China in digital services are shaping the EU's Cloud and AI Development Act, due to be unveiled on June 3 after repeated delays caused by infighting.
Expert Opinions on Infrastructure Vulnerabilities
"The current geopolitical landscape has demonstrated our structural vulnerabilities to being simply 'cut off' from very essential infrastructure," said Alba Ribera Martínez, editor-in-chief of the Stanford Computational Antitrust project, which brings together antitrust agencies and academics.
Ribera Martinez, however, said Europe needed huge investment to compete on cloud infrastructure. "It is a €1 trillion investment gap as compared to the United States."
Expected Impact of Draft EU Legislation
The draft EU legislation is expected to restrict but not block access to the EU cloud market for Amazon, Microsoft and Google, according to other people with direct knowledge of the matter, in particular in sensitive public procurement projects.
Amazon's 28% market share makes it the leader in the worldwide cloud infrastructure market, followed by Microsoft's Azure at 21% and Google Cloud at 14%, according to data company Statista. Their rivals trail in the low single digits.
Upcoming Policy Changes and Industry Reactions
New Spectrum Allocation Process
The EU will on Wednesday unveil an overhauled allocation process for spectrum for mobile satellite services, currently used by U.S. companies Viasat and EchoStar.
The 2 gigahertz (GHz) band is important for both military and commercial uses and a revised process may help pave the way for European entrants, such as OVHCloud and Deutsche Telekom, and limit Starlink's expansion in Europe.
Industry Concerns Over Protectionism
Lobbying group CCIA, which counts Amazon, Google, Meta and EchoStar among its members, warned this month against the "blanket exclusion of non-EU firms" and said EU digital policies could result in protectionism that denied consumers choice.
Next Steps for Legislation
The mobile satellite spectrum proposal will need feedback from EU countries while the Cloud and AI Development Act will have to be thrashed out with EU countries and the European Parliament in the coming months that could strengthen the proposed law.
(Reporting by Foo Yun Chee; Editing by Richard Lough, Adam Jourdan and Tomasz Janowski)
