EU antitrust regulations hinder innovation, which is the most effective way of fighting monopolies and strengthening the EU as a global power. That is ironic since the nominal purpose of those antitrust rules is to fight monopolies, not to empower them. The European Union needs to pivot its approach to businesses to be competitive globally, maybe even to fill the growing void left by the U.S. That is not out of the question, but only if Brussels changes course on its technology policymaking.
In the second half of the 19th century, a new invention, the telegraph, disrupted existing communication channels and made sending messages much quicker. However, the service soon gained a monopoly in the hands of Western Union, despite efforts by decision makers to prevent monopolies.
At the end of the 19th century, the telephone was patented. It was offered for purchase by its inventor, Alexander Graham Bell, to Western Union, which declined. In the end, the telephone made the telegraph obsolete and Western Union was bought by AT&T, a company founded by Bell, which is still among the top telecom companies in the US.
The regulatory environment of the United States was historically better for innovation, although there are signs that it is now less so, while the EU is lagging far behind. Monopolies are undoubtedly harmful, but the cost of fighting them should not be higher than the cost incurred by their existence.
The best way to stop monopolies is innovation, but the EU, through its antitrust policies, is stifling the very innovation it needs. Even the EU’s own competitiveness strategy admits the bloc’s innovation shortcomings and recommends that to improve Europe’s poor AI performance, data sharing between companies should be encouraged, “protecting them from antitrust enforcement by competition authorities.”
The innovation gap between the US and the EU is growing. Just look at the mammoth regulatory requirements of the Digital Markets Act and the Digital Services Act, not to mention the AI Act or the long-lasting GDPR.
Historically, there have been many more patents registered in the US than in Europe, and thus the EU has a lot of ground to cover before it can be truly competitive. With new emerging technologies, such as AI, it becomes apparent how dire the situation is, as the EU continues to fail to be a factor in innovations, whereas China is quick on the uptake.
Now, it is more important than ever for the EU to get out of the technological rut it got itself into. With the US destroying its global soft-power capabilities, leading to a power vacuum, the EU needs to step up and assert itself as a global power.
Without a strong economy, the EU will be sidelined on the global stage. Without innovation, the old continent will become retired. Despite promises of easing up on red tape, the regulatory burden is increasing in Europe. It is not enough to write about the need to innovate, to cut back on regulation, and to rethink antitrust laws in a strategy. These aims need to become a reality.
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