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**POLITICO Pro Morning Tech newsletter is free in partnership with Web Summit, where Mark Scott, our Chief Technology Correspondent, and Ryan Heath, Editor of Brussels Playbook, are reporting from this week. Have you heard of our POLITICO Pro premium news service? Contact us to learn more here.**
MARK ON MONDAY: Every Monday, POLITICO’s Chief Technology Correspondent Mark Scott brings you his thoughts on the week ahead in tech.
It’s hard to go a day without politics and technology bumping up against each other. Last week’s U.S. congressional hearings — during which Google, Facebook and Twitter executives all received harsh rebukes from American lawmakers — was just the latest in a series of public dressings-down by global policymakers that has turned 2017 into a year to forget for Big Tech. Other than companies’ sky-high stock market valuations and ongoing dominance in certain markets, of course.
All too often, though, the technology and political worlds are still too isolated from one another, speaking different languages to different constituencies that can quickly get lost in translation. I’m in Lisbon this week for Web Summit, a tech conference that brings together tens of thousands of techies (and some politicians), and I was reminded of this ongoing rift as I skimmed through the weeklong list of events aimed mostly at programmers and coders, but which also include a growing number of politically tinged speakers to discuss fake news, global digital taxes and other hot-button topics.
At the heart of this divide remains an inability to see where the other side is coming from. This, of course, is an oversimplification, but it’s not hard to make that judgement after regularly meeting tech executives, startup founders and politicians. No industry likes regulation. But for the tech sector — in Europe, the U.S. and elsewhere — there’s often a view that authorities are only looking to find ways to stop them from running a business. And when regulators do step in, their responses can be hamfisted and counterproductive.
For policymakers, the tech industry can seem like a black box, an unwieldy and unregulated global behemoth that favors a handful of large tech giants and remains mostly off limits to governmental control. Many officials will admit in private (and some in public) that the business models of these companies are incomprehensible to them, with startups often playing fast-and-loose with national rules.
In truth, the reality is somewhere in between. Both groups would benefit from leaving their preconceived notions of what constitutes a “hoodie-wearing entrepreneur” or a “suited, out-of-touch politician” at the door, and instead break bread with the opposing side. For all the cries of political over-regulation or tech dominance, there’s more that unites than separates the tech industry from lawmakers. That’s something to keep in mind as these worlds move increasingly closer together.
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GOOD MORNING and welcome to Morning Tech. Web Summit kicks off in Lisbon, where Mark and POLITICO’s Ryan Heath will be much of the week. In Brussels, another round of copyright talks in Council, with national reps sitting down to go through the entire proposal. Members of the European Parliament’s civil liberties committee debate the first annual review of the transatlantic data transfer deal, the privacy shield. The industry committee votes on its opinion on Parliament’s report on a digital trade strategy. Also in Brussels, the U.S. Chamber of Commerce is hosting an event about privacy by design.
BREAKING — PARADISE PAPERS: The International Consortium of Investigative Journalists got its hands on a new batch of leaked documents, it revealed Sunday, and it promises to be juicy. The docs come from Appleby, a prestigious offshore law firm, and were obtained by Süddeutsche Zeitung.
One story catching techies’ eyes: Two Russian state investment institutions poured investments into Twitter and Facebook through a business associate of Jared Kushner, a senior White House adviser named Yuri Milner. The New York Times has more.
UK — RUDD ATTACKS BIG TECH (AGAIN): British Home Secretary Amber Rudd is heading back across the Atlantic again this week in her ongoing quest to get tough on tech companies. Extremist material will be on the agenda, but so too will child sexual abuse, she wrote in The Sun on Sunday.
She then went on The Andrew Marr Show to say “There is much more that the internet companies can do, they already do quite a lot, but the growth has been exponential.” (Via our colleagues at POLITICO’s Sunday Crunch.) Rudd has been instrumental in the U.K. government’s push to have tech companies handle issues like hate speech and illegal content online — as well as critical of their stance on issues like encryption.
‘LARGEST TECH TAKEOVER EVER’: Bloomberg broke news of Broadcom eyeing a massive takeover of rival chipmaker Qualcomm, in a deal worth more than $100 billion. Reuters reckons it would be the largest technology takeover ever. Broadcom, a U.S. chipmaker that is incorporated in Singapore, appears to have been emboldened by the fall in Qualcomm’s share price following its global dispute with Apple, which has accused the San Diego chipmaker of abusing a dominant position. Qualcomm’s shares were apparently down some 16 percent, while over the same period semiconductor shares have made strong gains. The dispute features in one of two cases against Qualcomm being pursued by EU antitrust regulators. Broadcom may be betting that a change of management could dramatically ease tensions with a key Qualcomm customer (and a major Broadcom customer too).
Any takeover would need approval from EU merger regulators, which for a deal of this size will be complicated. Qualcomm’s $47 billion acquisition of NXP is the subject of an EU in-depth inquiry, though the chipmaker may have offered enough concessions to resolve concerns. Will all that hard work be in vain? The Financial Times reports that Broadcom would maintain the NXP deal. Not bad for a company like Broadcom, which started life as a spinoff of Hewlett-Packard and was acquired by private equity firms in 2005 for just $2.6 billion.
DEAR MINISTERS: European tech lobby groups wrote to European ministers that they’re “deeply concerned” about new tax rules under discussion, in an open letter released this morning. Finance ministers meet Tuesday for an ECOFIN meeting, where a new proposal on VAT in the e-commerce sector is on the table. Ecommerce Europe, CCIA, EDiMA and EMOTA, e-commerce and tech lobby giants, ask for “more time to debate new provisions.”
COPYRIGHT LOBBYING: The Copyright for Creativity initiative wants to make it clear to member countries that it does not like the way talks are going. “The outcome is increasingly worrying, as the Estonians have now achieved to make the terrible proposal of the European Commission even worse,” they wrote in a recent press release.
Their primary concern: Article 13, which would force big internet platforms to more effectively monitor their sites for copyright infringements. “The proposal basically implements the principle of ‘guilty until proven innocent’ on all online platforms (except a selected few), and by extension to all their users,” the press release says.
SILICON VALLEY CHALLENGERS: From antitrust, to hate speech and net neutrality: Bloomberg Businessweek lists Silicon Valley tech giants’ main legal fights ahead — including a number in Europe.
TWITTER BACKLASH: Twitter introduced some new safeguards to avoid calamities from disgruntled employees … like the one when an employee shut down U.S. President Donald Trump’s Twitter account on the worker’s last day. Here’s the Wall Street Journal with more.
YOU’RE GONNA LOVE THIS … if you’re a European regulator: Computer Weekly has an article out telling businesses to “Go beyond GDPR for a competitive edge” and laying out the business case for strict privacy protections in digital services.
DRIVING BUSINESS: Recode looked at the U.S. market for ride-sharing apps. It found that Uber is recovering from its worst year ever — more than 400,000 Uber riders reportedly deleted their accounts — while its competitor Lyft is seeing its sales go up by 33 percent.
APPLE IRELAND: Apple has gone worryingly quiet on a planned $1 billion Irish data center, the country’s prime minister told local media over the weekend.
Morning Tech wouldn’t be possible without Nirvi Shah and Zoya Sheftalovich.
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