Saturday, July 28, 2018

The Decline and Fall of Old Europe

By now you know that the European Union’s antitrust chief has fined Google some $5 billion for anti-competitive activities. To be honest with you, I have no idea what this is all about, but I did manage to reflect that, when all is said and done, America has led the charge toward technological innovation, while Europe barely registers. You might say, and you would be right to say so, that China is now working to compete with America, but Europe… not so much.

While everyone is gnashing their teeth over the fact that President Trump has taken to treating European allies as junior partners, everyone fails to notice that  European nations are acting like junior partners. And like junior partners who cannot compete or even defend themselves.

When you cannot do better than to deconstruct what others have built, you are losing out in world competition. Immigration is not Europe’s only problem.

Holman Jenkins reports the news in the Wall Street Journal this morning:

The world’s 700 million iPhone users will look at the European Union antitrust action against Google’s Android phones and say “Huh?” Even veteran users of Android phones will be little more than bemused if they soon must spend a few extra minutes to install the world’s most popular apps, such as Google’s search and map apps. This is no biggie: The average Android user already downloads 50 apps to his phone that weren’t preinstalled by the manufacturer.

Only on one group would there be any immediate effect, and it would be bad: The up-and-coming poor person in some less-developed country landing his first smartphone, which will likely be cheap, and likely be running the Android operating system.

Jenkins raises the salient issue. What have the Europeans accomplished by their anti-trust fines? Not very much.

One hopes a considerate salesperson or knowledgeable friend will be handy to show him how to make his purchase useful by downloading the most stable, tested and invaluable (though free to the user) apps that the rest of the world is using, made by Google.

The sole practical consequence of the EU’s action would be to raise an obstacle to this person’s discovery of the opportunities created by access to the world through the mobile internet. Nice work. The EU’s celebrated competition commissioner, Denmark’s Margrethe Vestager, has not made the world a better place; she has made it kludgier.

What is the deeper meaning of it all. Why, President Obama saw it clearly. Kudos to him for understanding that Europeans were punishing American companies because they cannot compete. Thus,  because the march of technology has left them in the dust.

Jenkins continues:

Europe’s antitrust czar “appears to be disproportionately targeting U.S. companies.” No, that’s not a Trump tweet, as might be told by the employment of anemic modifiers like “disproportionately.” It was a statement issued by the U.S. Treasury during Barack Obama’s administration.

Mr. Obama himself would tell an interviewer in 2015 that EU actions were “more commercially driven than anything else” because their tech companies “can’t compete with ours.”

It’s too late to roll back the tape. If America is the engine of digital disruption, the EU now views itself as having a special mission to discipline America’s tech giants. Ms. Vestager has become that rarest of things: an EU bureaucrat who actually has an ardent public following.

So, Vestager is a political star in Europe. She is a symptom of the decline and fall of Europe. It’s not just Obama who is right. Trump is right to treat Europe, especially Western Europe, as junior partners.


Anonymous said...

"Unicorn" tech companies (worth at least 1 billion): USA 200. Europe a mere 20. Israel 4 (plus 14 founded by Israelis, but headquartered or sold abroad).

David Foster said...

"America has led the charge toward technological innovation, while Europe barely registers" This is actually only partly true: Europeans have done very well in the early stages of technological innovation, not so well in the full-scale commercial rollout. For example, the World Wide Web was invented by Tim Berners-Lee (British, was at CERN at the time of the invention.) The transistor was independently invented in Germany---see my post Leaving a Trillion on the Table:

('trillion' was ridiculously small in this context, I should have said 'trillions')

Also remember that 'technology' is not a synonym for 'computer stuff.' German companies have been pretty innovative, at the commercialization stage as well as the research stage, with manufacturing technologies such as the continuous casting of steel.

Anonymous said...

The Germans are also adept at falsifying auto emissions test results. Just not quite adept enough.

Anonymous said...

Many Europeans would gladly change Vestager (who??!) for Trump anytime.

Sam L. said...

Europe is the "old world", and as Madeline Kahn sang in "Blazing Saddles", "I'm tired".
I guess they just don't much care any more.

Anonymous said...

Europe (well, Germany at least) still registers very highly in pharmaceuticals.