Europe’s trust issues

Fully Charged
Bloomberg

Hey all, it's Natalia in Brussels. In its campaign to sideline Chinese companies like TikTok and Huawei Technologies Co., the U.S. has often found allies in Europe. Thanks to U.S. national security warnings, the European Union has at times taken a harsher stance toward Chinese technology than it otherwise would have.  

But EU officials are also treading cautiously around the tech policy of another geopolitical player—the U.S. itself.

California-based Facebook Inc. is currently embroiled in a high-stakes dispute with the Irish Data Protection Commission over privacy rules surrounding international data transfers. The commission's decision could impact transfers of vast amounts of commercial data across the Atlantic. If those transfers are halted, Facebook says, the company's business would be threatened and the EU economy could suffer.

In order to understand fully this dispute, it's helpful to get some historical context. Tensions between Europe and the U.S. over data date back to 2013, when National Security Agency contractor Edward Snowden revealed the massive scope of American surveillance programs. The result was a severe breach of trust between Europe and the U.S.

After the Snowden leaks, U.S. President Barack Obama's administration moved to curb bulk data collection by intelligence agencies. Officials gave Europeans written assurances of privacy and attempted to set clear limits on data access. But the unease between the two world powers has lingered.

That was readily apparent this July, when the European Union's top court overturned a legal mechanism that allowed thousands of businesses to transfer data back to U.S. servers. In a shocking decision, the court found that Europeans' data is insufficiently protected when moved to U.S. soil because "surveillance programs are not limited to what is strictly necessary," it said.

As a result, companies may be now left without a legal way to transfer invoices or payroll data back to the U.S.

In some ways, Europe's focus on the spying potential of American companies calls to mind Americans' arguments about Chinese companies. The U.S. has sounded the alarm that ByteDance Ltd.'s TikTok could be forced to turn over the vast amounts of data it has about American citizens to China's government. Officials have also said that mobile equipment built by Huawei poses a national security risk because Chinese laws mandate that companies aid the government with intelligence gathering.

One solution for the EU is to try to avoid certain technology from both America and China. Germany, France and others are pushing ahead with plans for a "federated cloud," dubbed Gaia-X. The project is an attempt to create a European alternative to U.S. cloud providers like Amazon.com Inc. or Microsoft Corp., which are required under the U.S. Cloud Act to grant authorities access to data even if it's stored abroad.

The Gaia-X project, which EU leaders are expected to back at a summit later this week, would "create an environment in which data can be shared and stored under the control of data owners and users; and where rules are defined and respected," according to its website. 

Seven years after Snowden, plenty has changed in the global landscape of cybercrime and privacy. Europe has become increasingly focused on fresh concerns about state-backed Russian disinformation, Chinese cyber espionage and North Korean hackers. But even though the risks from the rest of the world are growing, that doesn't mean Americans are off the hook. Natalia Drozdiak

If you read one thing

Microsoft said it plans to buy ZeniMax, owner of the storied video game publisher Bethesda, for $7.5 billion, Bloomberg reported Monday. Bethesda has created beloved games including the Elder Scrolls, Doom and Fallout. The deal could pave the way to a long-awaited Netflix of gaming, as Microsoft builds out its subscription-based service Xbox Game Pass.

And here's what you need to know in global technology news

This month, a federal investigation into Google is expected to produce the most significant antitrust lawsuit in the U.S. since the government went after Microsoft in 1998. The Justice Department is poised to brief states on the suit on Wednesday

Apple boss Tim Cook says he's so impressed with remote work that the company will make some permanent changes as a result. Cook also said about 10% to 15% of employees have come back to the office, and that he hopes the majority will return next year.   

ByteDance says it will retain majority control over TikTok Global; U.S. President Donald Trump says ByteDance will be completely out of the equation. The math still doesn't add up. Said one analyst: "You can't have 80% and 0% at the same time."

Video upstart Quibi is exploring a sale after a lackluster debut

 

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