By Tom Fairless
BRUSSELS--The European Union unveiled a signature plan to unite
the region's fragmented online markets and crack down on possible
abuses by U.S. Internet firms, a move policy makers hope will boost
the economy and help spawn Internet giants to rival Google Inc. and
Facebook Inc.
The plans, six months in the making, are a cornerstone of
efforts by the EU's recently appointed executive arm to jump-start
growth. They contain 16 initiatives ranging from an overhaul of the
region's telecommunications rules to harmonized copyright and tax
regimes to cybersecurity and even better parcel delivery.
Crucially, the plans call for several major inquiries into
possible abuses by U.S.-based Web companies. These include a
"comprehensive analysis" into the role of online platforms such as
search engines and price-comparison websites, which the EU worries
may be abusing their market power, and a previously signaled probe
by antitrust regulators into whether Internet commerce firms such
as Amazon.com Inc. are restricting cross-border trade.
The plans are some way from becoming reality. The European
Commission, the bloc's Brussels-based executive arm, must turn them
into concrete legislative proposals that will be debated and
modified by national governments and the European Parliament, a
process that usually takes years.
Building a single market for goods and services in Europe has
taken many decades, and has moved forward in a piecemeal way, with
some plans falling by the wayside. The plans announced Wednesday
relating to the telecom sector are in part a response to the
watering down by national governments of a 2013 EU proposal. That
plan also called for coordinated allocation of radio spectrum to
help create a more consistent framework for telecom operators.
The antitrust probe, meanwhile, doesn't depend on agreed
legislation.
While the plans stop short of new regulations for Internet
companies, Günther Oettinger, the EU's powerful digital
commissioner, stressed that such a move was still on the table,
also in terms of the way online companies handle illegal
content.
"If we're going to have European legislation in this field, we
need analysis," Mr. Oettinger said at a news conference. The
commissioner previously spoke of the need to regulate Internet
platforms in a way that allows European firms to overtake the
dominant U.S. operators, and his office produced a blueprint for
platform regulation in February, according to a copy seen by The
Wall Street Journal.
Technology firms cautioned against heavy-handed new rules, which
they said could constrain Europe's ability to attract technology
companies and to develop its own.
"Brussels appears poised to put government officials in charge
of how hugely popular online services are designed and implemented"
without any evidence they are harming consumers, said Dean
Garfield, president of the Information Technology Industry Council,
a lobby group.
At the heart of the project is a determination to fight back
against the dominance of the Web by U.S.-based companies. Top EU
officials have warned that European firms are lagging behind in a
critical sector that is squeezing traditional industries one after
the other.
Jean-Claude Juncker, president of the European Commission, the
bloc's executive arm, said Wednesday that the plans would "lay the
groundwork for Europe's digital future."
"I want to see pan-continental telecoms networks, digital
services that cross borders and a wave of innovative European
startups," Mr. Juncker said.
EU officials estimate the plans could add EUR415 billion
($465.28 billion) to Europe's economy and create hundreds of
thousands of new jobs, urgently needed in a region where
unemployment exceeds 11%.
The digital single market "is a big deal" that "will add
tremendously to [Europe's] competitiveness in the long term,"
General Electric Co. Chief Executive Jeffrey Immelt said in a
speech Tuesday in Brussels.
"No serious investor believes Europe really cares about jobs if
the rules are inconsistent," Mr. Immelt said.
The EU also pledged to create "a level playing field" between
Europe's telecom operators and new challengers such as Skype and
WhatsApp, which the operators have accused of competing
unfairly.
Telecom operators welcomed the plans. "We commend the [EU] for
its commitment to ensure fair competition and a level playing
field," Vodafone said in a statement. But it called for "a more
ambitious timetable," and urged regulators to allow more mergers
between telecom operators.
The plans are some way from becoming reality. The European
Commission, the bloc's Brussels-based executive arm, must turn them
into concrete legislative proposals that will be debated and
modified by national governments and the European Parliament before
being voted into law.
At the news conference, Mr. Oettinger repeated his criticism of
U.S. Internet firms such as Google and Microsoft Corp. for the way
they handle personal data. He said common European data rules would
help address the problem.
"If you look at the [Internet] platforms they have in the U.S.,
national data rules play an increasingly reduced role, [it's]
possible to work your way around national rules," Mr. Oettinger
said.
Write to Tom Fairless at tom.fairless@wsj.com
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