THE BLOG

Why Does Europe Hate Silicon Valley?

06/26/2015 03:11 pm ET | Updated Jun 23, 2016
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Americans love sightseeing in Europe. Europeans love jetting around the United States. We admire the Beatles, French Impressionists, Belgian chocolate, and a host of other European cultural icons and sights. They adore Taylor Swift, New York City, our Hollywood films and much more. It's a virtual lovefest, until you start talking about modern technology. That's where Europe turns the other cheek.

This is war. Let's look at the battle scars to date. Europe strikes out against Microsoft and wins. Europe raids Intel and wins. Europe launches a blitzkrieg on Google and wins. Now comes word that they have their sights set on Facebook and its privacy policies update from late last year. They may also take on Apple's online music streaming service. It makes one wonder; doesn't Europe have anything better to do than attack our iconic innovations? Is it petty jealousy? Did they wake up one morning on the wrong side of the ocean?

Fundamentally, it's a clash of mindsets. Silicon Valley, as well as Seattle for that matter, is responsible for the leading computer and Internet technologies used the world over. You want to buy something, you visit Amazon. You want to look something up, you go to Google. Need an operating system? Say hello to Microsoft. Device chips, you think Intel. Smartphones, laptops or tablets - Apple jumps to mind. For social media, Facebook and Twitter rise above the rest. Any European iteration of these companies all trickle down from these leaders.

So what does all of the above tell you? Well, American ingenuity is alive and well. We've changed the rules of the game, invented new playing fields, and blazed new paths. Europeans would admit this reality as much as we do ourselves. The divide therefore comes less from what these amazing apps do and more from what they do not.

To summarize, Europe thinks these services don't protect the individual. That's a problem because Europeans strongly believe in the right to privacy. Dr. Rolf Weber, a Law Professor at the University of Zurich, points out in his paper: "The Right to be Forgotten," that it was America and Supreme Court Justice Louis Brandeis that defined "the right to be left alone" in 1890. That definition was more business focused than individually focused however, concerning confidentiality more than the lone wolf. Most important, it didn't apply to our data. Lost in the conversation is our Constitution's 4th Amendment - mainly because of carefully worded Silicon Valley privacy policies that wave those rights.

Europe, in the post-World War II years, came to realize that there was a distinctive difference between being left alone and being forgotten. For Europeans, the distinction applied to data protection. Thus, from the 1970's to the 1990's Europe welcomed a wave of individual country laws concerning data protection. The timing was perfect, because as the advent of the modern computer and Internet came to be, Europeans had in place rules to regulate data transfers and individual rights as they pertained to personal data. They also had created a mindset.

The end result to the parting of the seas has been that Europe always affixes data protection to conversations and actions concerning the Internet and websites. Back in America, we are kids in a candy store. We've invented these incredible, fun, and useful apps that everyone jumps on board to use. All of these apps and services do come with privacy policies that we must accept before using. But no one reads those. We can't check that approval box fast enough. So we get access to cool apps but in return, we trade our rights to our personal information for service providers to sell to advertisers.

Thirty years later here we are with all of these newfangled American services flooding a protected European market. Something has to give. Meanwhile back at home, we're trying to find ways to retroactively apply data protection to apps that are already widely popular and are entirely founded on taking your data, all of it. Again, something has to give.

There are three things that will come of this battle. First, is an understanding that there's common ground between the privacy we are now demanding and the privacy Europe already has in place. Second, going forward, new technology and American start-ups have a significant opportunity to leverage this rapidly changing landscape by building the level of privacy into their services that people across the country and the world are increasingly demanding as part of a burgeoning privacy revolution. Third, there is no way that Europe is going to amend its laws.

American companies, already established in the European marketplace, may have to choose to pay excessive fines or modify their wares. Microsoft did it. Google did it, albeit just slightly. Who knows what Facebook and others will do? Europe is challenging the very foundations that these companies exist upon. For some companies, such as those with business models more expansive than data mining, it no longer makes financial sense to fight this war. When that point will hit home with Silicon Valley will vary from company to company. For the established status quo and many new SV companies whose business logic premise is data collecting/sales, marketing in Europe is likely to include a day of reckoning in the not-to-distant future.