Are Europe’s Tech Regulations Harming Homegrown Industry?
In July, the European Commission released a new strategy agenda for the so-called metaverse. The metaverse is a broad grouping of immersive virtual reality worlds, where everything from work to gaming to socializing could take place. It’s widely seen as a giant flop right now, with only a handful of users registered even on the most popular platforms like Meta’s Horizon Worlds, and few practical applications.
In July, the European Commission released a new strategy agenda for the so-called metaverse. The metaverse is a broad grouping of immersive virtual reality worlds, where everything from work to gaming to socializing could take place. It’s widely seen as a giant flop right now, with only a handful of users registered even on the most popular platforms like Meta’s Horizon Worlds, and few practical applications.
Still, many in the industry are convinced the metaverse will dominate tech’s future, and it’s no surprise that states are jockeying for influence. But as with other technologies, Europe doesn’t seem capable of—or even interested in—leading in the actual technology around the metaverse. Instead, it is interested in leading the policy discussion, or the regulation of that new technology.
That’s a common dynamic on the continent—and in the United Kingdom. The U.K. is hosting a summit on AI safety this year, and British Prime Minister Rishi Sunak wants the country to be a world leader in “the governance of AI.” Of course, few of the most important AI firms—except Google’s DeepMind—are located in the U.K. The U.K. has little to no chance to lead in AI development, but it is eager to lead in AI regulation.
The European Union’s General Data Protection Regulation (GDPR), Digital Markets Act (DMA), and Digital Services Act (DSA) are all regulatory bills aimed at internet commerce and technology companies and have been described as leading efforts in their respective legislative areas. The EU is also trying to become the first entity to comprehensively regulate AI with its upcoming Artificial Intelligence Act. The EU’s practice of aiming for and achieving global regulatory dominance is so common it even has a name and Wikipedia page—the Brussels effect.
These regulatory efforts are shaped by the reality that Europe’s leading tech companies are essentially a rounding error compared to U.S. tech giants. The social media companies, retailers, software providers, and platforms that define our online existence are overwhelmingly American. This naturally raises a series of questions: Will Europe’s approach to tech regulation stop the continent from ever successfully building its own tech sector? And with bill after bill strictly regulating every area of the field, has Europe given up on even trying to succeed in tech?
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