WSJ: U.S. Technology Companies Worry About the Backlash They Face in Europe

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By Stephen Fidler:  Europe Pulls Welcome Mat for U.S. Tech Companies

One message so far from the corridors around the World Economic Forum in Davos: U.S. technology companies are very worried about the backlash they are now facing in Europe.

European governments are pressuring companies like Facebook to inform authorities of terrorism-related content on their systems. Above, Sheryl Sandberg, Facebook’s chief operating officer, at the World Economic Forum in Davos, Switzerland, on Thursday.
European governments are pressuring companies like Facebook to inform authorities of terrorism-related content on their systems. Above, Sheryl Sandberg, Facebook’s chief operating officer, at the World Economic Forum in Davos, Switzerland, on Thursday. Photo: Bloomberg News

From their standpoint, Europe risks shooting itself in the foot by rejecting the cutting-edge technologies they have brought to the continent.

But they would say that, wouldn’t they? Look at it from the European point of view.

Europe once led the world in mobile technology: The Global System for Mobile Communications, developed in Europe, became the global standard. But that was a long time ago. Now, most innovation in information and communications technology comes in waves from across the Atlantic.

With America’s vibrant capital markets giving them billions of dollars in risk capital, they can absorb the successful European tech enterprises—look at Skype Technologies, swallowed by Microsoft Corp.

These U.S. companies— Google , Facebook , Amazon and others—are disrupting industry after industry. Publishing, telecoms and retailing have already been convulsed. Now, the companies, and Google in particular, are turning their gaze from consumer-oriented to business-oriented platforms.

That is a big deal for growth-starved Europe and for its biggest economy, Germany, which leads the world in high-quality engineering. Europe’s car industry is a leading employer, its suppliers reach through the continent, and it is one of the biggest spenders on research and development. Germany’s machine-tool manufacturers are deservedly renowned.

But much of the future profit for these industries won’t flow from punching metal but from the networks they will use to manage information—for example, taking the cars where they want to go, catering to passengers with entertainment and retail experiences as they travel—and it’s a strategic question who owns them.

A hint at the anxieties of German car makers is contained in an interview the European Union’s digital-economy commissioner, Günther Oettinger, gave this week to The Wall Street Journal.

“My expectation is that our European car producers are able, are willing to survive and to integrate Google and not be secondary,” he said. “I have many weekly discussions with members of the boards of these companies….They say Google or Facebook and Apple are invited, but not to have them take over, but to have a clear partnership where our European companies are in the lead.” Read on….

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