Europe in Two Internet Related Battlefields

[Editors note:  Please welcome , from Hamburg University’s Graduate School in Law and Economics, who joins Syracuse University’s iSchool and the IGP as a Visiting Doctoral Student for the next six months.]

“Lord, deliver us from all evil and from French state justice.”[1] This was the French farmers’ prayer once their parliament and state got involved with their affairs with their written laws and overly legalized procedures that applied to every single one of them. In modern times, the Internet governance community might have to say the same prayer when overzealous European states get involved in the Internet.

The French Senate Joint Information Mission report provides a vivid example of this tendency. Entitled “Europe to the Rescue of the Internet,” it offers one solution to every problem they face on the Internet, namely: Europeanization. Throughout the document, Don Quixote is battling some serious imaginary enemies and is determined to save the governance of the Internet. In this blogpost two such battles will be considered: The Battle of European Digital Champions and the Battle of European Internet Governance.

The Battle of European Digital Champions

The French Senate report has a cunning plan to create “European Champions” (i.e. digital companies as giant as the American ones). It will do it by taxing them and regulating them, and in the meantime it wants to preserve net neutrality. But is this a new solution? Back in 2007, the EU Commission provided US$ 166 million in funding for a European search engine to compete with Google. Where is it? The EU has been over-regulating their information and communications sector for decades. They have not been able to find a balance between privacy laws and innovation, as their rigid laws stall the companies from coming up with innovative ideas. While European telecom operators are stuck in the mud, Google has been successfully developing innovative ways to advertise and provide free email service. Moreover, regulating through taxation has not been very successful.

To foster a ‘competitive market,’ the EU has decided to tax American Internet firms such as Google. But their tax regulation thwarts competition from small and medium sized enterprises. The European value added tax (VAT) on the consumption of goods varies in different countries, so the companies naturally register themselves where the VAT is lowest.  EU has recently changed its law to overcome the challenge of tax havens by requiring the VAT to be applied based on the home country of the consumer, not the place of business. This means that each business has to register for VAT in each of the 28 EU states and file VAT reports for each of the countries, which imposes heavy costs on small and medium sized businesses, undermining the potential European digital champions. In fact, small and medium sized businesses in the UK have been protesting against adoption of this law, arguing that they will be forced to shut down if they have to comply with it.

The Battle of Internet Governance

The intention of the French senators is clear from the very beginning of their statement: They want a European Internet and more European control on its governance. They attribute the popularity of the Internet to a European creation: the World Wide Web protocol. Then they claim that the Internet as it stands is largely American and the European role in policymaking is very weak. They ignore the role of the Governmental Advisory Committee (GAC) in ICANN as well as the fact that nearly all European countries, the Council of Europe and the European Commission are members of GAC.

The solutions that the senate puts forward are not novel. They include creation of a replacement for ICANN, with the cute name WICANN, in Swiss jurisdiction. It also recommends that this new body be operated under the international law or preferably Swiss law. It does not specify which Swiss or which international Law, but presumably Swiss laws are more effective, better developed and above all more neutral than American laws. They support these calls for change by criticizing ICANN’s lack of an appeals mechanisms. While ICANN is in need of a better, more effective and accessible appeals mechanism, it is not completely without an appeals mechanism. ICANNs’ decisions have been challenged in court and through its own independent review process multiple times.

Overall, while they attempt to be progressive, their document calls for the most rigid measures for “rescuing the Internet.” Their attempt to assert the role of Europe in Internet governance might fragment Internet services along regional lines, by limiting the access of enterprises and governments to cloud computing services, or discouraging the use of competing services. We see such ideas of limitation and regionalization in the context of the European cyber security agenda. In 2011, ‘The Presidency of the EU Council’s Law Enforcement Working Party (LEWP) presented its intention to propose concrete measures towards creating a single secure European cyberspace with a certain “virtual Schengen border” and “virtual access points” whereby the Internet Service Providers (ISP) would block illicit content on the basis of the EU “black-list”’[2] This kind of restrictive governance can more effectively lead to the fragmentation of the Internet and hamper competition when it is imposed by a centralized mechanism that has authority over 28 States.

It is not clear how such a European network enables Europe to compete better with other non-European networks. Why would the Internet users trust a certain cloud computing network only because it is located in Europe? Europe has not been any more transparent than the US in establishing anti surveillance rules and following them. Recently the Bureau of Investigative Journalism has filed a case at the European Court of Human Rights challenging UK government over surveillance of journalists’ communications. Moreover, the Snowden revelations, which contributed vastly to the debate over local networks and data, revealed that the National Security Agency had bilateral and multilateral agreements with European countries for tapping cables and they had (and still have) representatives in different countries including Germany and France.

To overcome the problem of data protection and espionage, and to raise European digital champions, regionalization of the Internet might not be the answer. Regionalization is not economically viable; it is costly and undermines the values of openness, interoperability and inter-connectedness. In other words, by planning to have European networks and European Internet instead of rescuing the Internet, they are planning to guillotine the current Internet and make a European one.

 

 

[1] Eugen Weber, Peasants Into Frenchmen: The Modernization Of Rural France 1870-1914 50 (1976).