Based on a examine, the financial price of latest EU know-how guidelines might exceed $ 100.5 billion
From Foo Yun Chee
BRUSSELS (Reuters) – The European Union’s plan to curb US technology giants with new rules could cost the 27-country bloc up to 85 billion euros in economic growth, warned the Brussels-based think tank ECIPE.
Under the proposed rules, Facebook (O :), Alphabet (O :), Google, Amazon (O 🙂 and Apple (O 🙂 could be forced to exchange data and be forbidden from giving preference to their own services.
In a Google-sponsored study due out this week and due out by Reuters, the European Center for International Political Economy (ECIPE) said that changing the regulatory approach could have a chilling effect on the EU economy.
“The economic impact of the ex post to ex ante shift in the online services sector, as set out in the proposals of the Digital Services Act, will result in a loss of gross domestic product of around € 85 billion and a loss of consumer wealth of around € 101 billion based on a 2018 base value, “said the think tank.
“It will also reduce the workforce by 0.9%.” The figure of 85 billion euros corresponds to 0.5% of the bloc’s GDP.
ECIPE said it had examined the ex ante rules for general purpose technologies, particularly for the telecommunications industry, and then replicated the results for online platforms to get the numbers.
The study identified the risks of ex ante regulations, which instruct companies what to do before demonstrating competitive damage or market failure.
“Ex-ante approaches are poorly suited to sectors that are developing rapidly or regulating low-risk general-purpose technologies,” it said.
ECIPE said the EU legal framework is not designed to adapt rules quickly, nor is it clear which market failures the bloc is trying to address with new rules or that they cannot be addressed once the damage is proven.
The European Commission will publish the rules on December 2nd. After that, it needs to be brought into line with proposals from EU countries and the European Parliament before it becomes legislation.
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