Good morning. David Meyer here in Berlin, filling in for Alan.
The European Union has long been a tough regulator in the tech sphere—far ahead of the game on the digital privacy front, and happy to fine the likes of Google billions of euros for its antitrust violations where U.S. regulators are only now starting to get serious about online competition. (See today’s news about the FTC’s advancing Amazon probe for the latest example.)
But the American tech industry can now expect to get an even rougher ride in Europe, judging by the shape of the new European Commission, as unveiled yesterday by incoming Commission President Ursula von der Leyen.
VDL, as she is known in Brussels, has vastly expanded the powers of the much-feared competition commissioner, Margrethe Vestager. The liberal Dane retains her competition portfolio, but is now also one of VDL’s three top deputies, with responsibility for creating “a Europe fit for the digital age.”
That means she will now be both the bloc’s top antitrust enforcer and, as VDL’s mission letter to Vestager makes clear, the co-author of its industrial policy. Big data, digital taxation, new rules for online content and artificial intelligence (with the aid of France’s new commissioner, Sylvie Goulard)—all these things will now be under Vestager’s purview, alongside the enforcement of monopoly rules.
The U.S. tech sector certainly has much to fear. However, VDL’s digital proposals are not all about holding back American titans; they are more overtly about building up a European tech sector that can ably compete on the global stage. The new president supports a “one in, one out” principle whereby the introduction of each new legal burden on companies means the scrapping of an older burden. In theory, that should benefit players from around the world, not just Europe.
Of course, a new Commission’s aims will not necessarily translate into reality. Industrial policy does not always have the desired effect. But Vestager has already shown herself to be a creative enforcer—witness the way she used antitrust law to force Ireland to claim $15 billion in back taxes from Apple. If anyone is imaginative enough to fix the mismatch between the velocity of technological development and the relatively glacial pace of lawmaking, it’s her.
So Silicon Valley should probably brace for enhanced pushback from Europe, in terms of both enforcement and—if all goes to plan—more credible competition.
More news below.
The Hong Kong Exchange would like to buy the London Stock Exchange. It’s approached the LSE with a surprise $36.5 billion cash and share offer; if the deal pans out, the Hong Kong Exchange would also apply for a London listing. The London Stock Exchange’s share price popped 12% on the news. Wall Street Journal
Apple showed off a bunch of revamped gadgets yesterday, including three new iPhones (starting with a $699 iPhone 11) and a new iPad, but also unveiled very competitive $4.99-a-month pricing for its Arcade game-streaming service and TV+ video-streaming service. What’s more, people buying the new i-devices will get a year’s TV+ subscription for free. The downside, of course, is that the new TV+ service won’t have as deep a catalog as pricier rivals such as Netflix and Disney. Fortune
Californian lawmakers have green-lit a bill ensuring that gig-economy workers, such as those who drive for Uber and Lyft, get holiday and sick pay. California’s supreme court ruled last year that the workers should be considered employees; this law, Assembly Bill 5, would codify that decision if signed by Governor Gavin Newsom (who backs it). BBC
Exercise-bike maker Peloton will price its shares at $26-$29 in its upcoming IPO, which aims to raise up to $1.16 billion. At the high end of the range, Peloton would be worth $8.06 billion. CNBC
AROUND THE WATER COOLER
China has suspended some of its tariffs on American imports, including cancer drugs and lubricant oils. If it’s a gesture of goodwill, it’s a small one, as Beijing maintains hefty tariffs on major goods such as pork and soybeans. Financial Times
U.S. companies, stung by tariffs, are investing less in China, according to the latest survey of members of the American Chamber of Commerce in Shanghai. The redirecting of investments away from China seems to be speeding up. CNBC
Prime Minister Boris Johnson’s suspension of the British Parliament is unlawful, a Scottish appeals court has ruled, overturning an earlier ruling that said the five-week “prorogation” of Parliament (which began yesterday) was kosher. The court said the prorogation was clearly designed to stifle parliamentary debate about Brexit. Johnson, of course, told the Queen it was about preparing a new legislative agenda, so did he lie to her? The case now goes up to the U.K.’s Supreme Court. Guardian
Now that President Trump has fired John Bolton (or now that Bolton has quit, depending on whom you believe), who will replace the über-hawkish national security adviser? A successor will be announced next week, and names in the frame apparently include former Bolton chief of staff Fred Fleitz, former acting natsec adviser Keith Kellogg, Mick Mulvaney adviser Robert Blair, and hostage envoy Robert C. O’Brien. New York Times