Trump And The Tech Giants Beware - Vestager's Back With EU 'Super Powers'

There may be trouble ahead -- that's how the great Irving Berlin song goes, and it could sum up perfectly what the tech giants in Silicon Valley are feeling today.

The Telegraph goes so far as to refer to Margrethe Vestager's reappointment as the EU's Competition Commissioner as a "worst nightmare" scenario for the likes of Google and Facebook. 

It was expected that a shuffling of the pack of European Commissioners would mean the lady who brought record antitrust fines against Google and forced Apple to pay billions in backdated tax would be heading off for pastures new.

Surprisingly, she has not only been kept on in the role, but has taken on new responsibilities to protect Europe's IT industry. The Telegraph went on in the aforementioned article to point out this means the tech giants are now facing "Vestager on steroids."

It isn't just one paper that is saying it. The Times uses rather more grown-up language to point out that this now gives Vestager five years to defend against any appeals to previous action and to come up with new legislation to further protect the IT industry in EU. The paper sums up the move as the EU publicly committing to its "robust scrutiny of Silicon Valley."

The obvious potential case in the pipeline that we might see first is the EU recruitment industry's complaints against Google. It is arguing that, similar to other industries, a box that appears above organic results for job searches is anti-competitive because it includes a selection of open positions scraped from their websites. The fear is that this could turn into a job-finding business run by Google. 

The Times points out that one of Vestager's first jobs is to devise a digital services law to regulate content on the internet, as well as beef up the EU's rules on privacy and cyber security. 

Perhaps even more worrisome for the tech giants, however, is that a bit part of her newly expanded role is to tackle the tech giants of tax avoidance. It is hard to underestimate how fed up European citizens are with the tech giants who earn billions through tapping into a lucrative market but then find legal ways to reduce their tax bill, often through moving money to regimes with far lower rates of tax.

Remember, it is this avoidance of tax that has prompted France and Britain to pass legislation to bring in a new tax on digital sales at the tech giants.

President Trump has seen it as a move against American companies and has warned of retaliatory action. If he was hoping the EU would back down, Vestager's appointment is a sign that the position here will only become more vehement in trying to make the tech giants pay their fair share. 

And that ultimately is what this announcement is all about. If the tech giants and President Trump thought they had ridden out a five-year storm, they were wrong -- another five years are coming, and the climate is only set to become more intense.

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