Whither the transatlantic digital relationship?

“The Internet succeeds because we are open.  That is what makes it the natural home of innovation, the new frontier of freedom…. The more open we are; the more we benefit.  Within the EU, and within the U.S.; but also between the two continents.”

Neelie Kroes, the European Commission’s outgoing Vice President for the Digital Agenda, delivered these remarks as part of a recent speech in Washington where she spoke eloquently on the need to increase digital integration between the world’s two largest economic blocs.  And after a decade tenure in the European Commission that included heading both the competition and digital portfolios, Kroes understands — perhaps better than anyone — the imperative for the U.S. and the EU not to erect barriers to transatlantic digital communications and commerce.

{mosads}Unfortunately, Kroes’ sentiments are not universally held in Europe.  Slow economic growth and a tough period of austerity have fanned the protectionist fires.  If you factor in cultural differences — particularly on tricky issues surrounding free speech and privacy, the perceived American domination of high-tech markets and an understandable dose of furor over Snowden, then it is not surprising that some European politicians have inflamed the growing rifts between the two longtime friends.

Whether it is politicians proposing a separate “European Cloud”, or the European Parliament calling for a suspension of transatlantic commercial data transfers, anti-American rhetoric is growing louder.  American companies are under direct attack as well.  French politicians polemicized Netflix’s entry into Europe as “cultural dumping”, and powerful European publishers have pushed — successfully in some countries — for a controversial “snippet tax” aimed at American Internet companies.  The Google competition investigation lingers into its fifth year, after three settlements proposed by the European Commission were later pulled after being politicized, and last year the French government blocked a bid by Yahoo! to take a controlling stake in Daily Motion, a French competitor to YouTube, for overtly protectionist reasons, with France’s junior economy minister stating, “maybe if Europe protected itself much better, it would be much stronger against the United States.”  The political rhetoric has reached such a din that the incoming Commissioner for Competition acknowledged the tide of “anti-Americanism” but promised it would not sway her.  Whether true or not, Europe’s 27 other Commissioners have to approve her competition enforcement decisions, so her sensibilities alone might not be enough.  

Too much is at stake to shrink in the face of foreign protectionism, or succumb to the siren song of retaliatory measures.  As I write, negotiators from both Europe and the United States are hard at work constructing what has the potential to be the most important bilateral trade agreement ever signed. Concurrent with that negotiation are transatlantic conversations around the future contours of the EU-U.S. safe harbor agreement, which allows data to stream across the Atlantic — a necessity for EU and U.S. businesses in the 21st century.  Perhaps most importantly, the EU and the U.S. are key allies in the diplomatic fight to keep Internet governance out of the hands of those regimes that seek to bring the medium under the political control of individual states, thus imperiling the future of the Internet itself.  

History has illustrated that erecting trade barriers in the face of economic uncertainty impoverishes everyone, and this is especially true in today’s interconnected, digital world.  It is myopic to view an open, global Internet as a zero-sum game.  As Kroes made clear in her speech, European consumers and businesses benefit from innovations “wherever they come from.”  Currently, European small businesses use American e-commerce platforms to sell their wares all over the world.  American consumers download Finnish mobile games from Rovio, seamlessly video chat on Estonian-created Skype, and stream tunes from Swedish music service Spotify.  Backtracking on our current level of digital integration would be both costly and very messy.   

U.S. policymakers need to engage with their European colleagues and push back against creeping protectionism, pointing out its conflict with the stated goals of the current trade negotiations.  And, in order to strengthen its own hand, Congress should prioritize surveillance reform legislation and a forward-looking trade promotion bill.

A new European Commission provides both Washington and Brussels the perfect opportunity for a much needed reboot.  A time to focus on the big picture and strengthen the ties that bind us together, while also remembering that so much of our joint digital futures lie in neither Europe nor the United States but in fast-emerging countries.  

Black is president and CEO of the Computer & Communications Industry Association.