Is Europe failing due to regulations?

There’s been a meme going around for a while now that America is great at invention and innovation; Asia is great at industrialising and maximising America’s inventions; and Europe is fantastic at blocking all of it through regulations. The Eurocrat regime rules. What’s the reality?

Well, it certainly is true that America led the way with Big Tech. The Meta, Alphabet, Amazon world only exists because the pathway was given from investors and Silicon Valley. It is certainly true that Asia imitated a lot of those innovations as Jack Ma, when he created Alibaba, based a lot of the business idea and model on Amazon and his then hero Jeff Bezos. And when we look at Europe, it is also true that a lot of its structure is focused upon regulating things.

I learned this through the PSD (Payment Service Directive) and MiFID (Markets in Financial Instruments Directive) rules and, for many years, spent my time focused upon rules and regulations in Europe. Then the financial crisis hit in 2008, the iPhone and Cloud computing launched, and the whole world changed its axle to innovation and change. That’s what created the Fintech revolution, and the launch of companies from Stripe to SoFi.

Within all of this, Europe has always been conservative. Possibly the poster child of Europe’s introspections is Margrethe Vestager, the Danish politician who is now Executive Vice President of the European Commission for a Europe Fit for the Digital Age and has, for years, led the mission to ensure that Big Tech pay their taxes.

The issue is the same one I keep coming back to: Innovation versus Regulation (versus Imitation). America innovates; Asia imitates; and Europe regulates.

Now, that sentence above is a bit harsh as Asia does not imitate. It leap-frogs. But it leap-frogs using ideas from all over the world, including the USA. In fact, it’s interesting that for many years, Asia was accused of breaching copyright laws and stealing intellectual property. Today Asia, and more specifically China, does not need to do this. They’ve caught up and have jumped ahead of Europe and America in the innovation stakes. That’s why I write so much about Alipay, Alibaba, WeChat, Tencent and their brethren.

The same is true in Latin America, Africa and other countries emerging from a non-digital era. Their embracement of technology is far ahead of those countries who embedded systems fifty years ago.

I guess the core point of why I am writing this is that there is a question: why doesn’t Europe have a Big Tech? America has Meta, Alphabet and Amazon; China has Alibaba, Tencent and Baidu; what has Europe got? Nada.

Maybe it’s because America is great at innovation; Asia is great at industrialising innovation; and Europe is best at breaking innovation through regulations.

Notable:

Microsoft blames EU rules for world’s biggest IT outage

Microsoft has blamed EU rules for enabling a faulty security update to cause the world’s biggest IT outage.

The software giant said a 2009 agreement with the European Commission meant it was unable to make security changes that would have blocked the CrowdStrike update that triggered widespread travel and healthcare chaos on Friday.

CrowdStrike’s Falcon system, designed to prevent cyber attacks, has privileged access to a key part of a computer known as the kernel.

This meant that a faulty update last week resulted in millions of Windows computers and servers being unable to load at all, leading to flight cancellations, contactless payments not working and GP surgeries being unable to make appointments.

Microsoft, which offers its own alternative to CrowdStrike known as Windows Defender, agreed in 2009 to allow multiple security providers to install software at the kernel level amid a European competition investigation.In contrast, Apple blocked access to the kernel on its Mac computers in 2020, which it said would improve security and reliability.

A Microsoft spokesman told the Wall Street Journal that it was unable to make a similar change because of the EU agreement.

Queues of passengers at Bangkok's Don Mueang airport in Thailand on Saturday after a global IT outage caused widespread disruption - Mailee Osten-Tan/Getty© Provided by The Telegraph

Microsoft said on Saturday that the CrowdStrike update had affected 8.5m Windows devices. This was less than 1pc of all machines operating the software, but had major impacts because CrowdStrike is widely used in businesses.The faulty update caused a blue error screen on many computer screens, rendering them unusable until they were fixed.

CrowdStrike said on Monday that “a significant number” of the affected computers were back online and apologised for the disruption.

Figures from data company OAG showed that 9,650 flights had been cancelled between Friday and Sunday. While many airlines had recovered, 2,619 flights were cancelled on Sunday, with US airline Delta accounting for most of those.

The NHS said that its systems were back online but that “there still may be some delays as services recover”.

The European Commission pursued Microsoft in the early 2000s over concerns that the company’s popular Windows software gave it an unfair advantage in other areas such as web browsers.

In 2009 the company agreed to boost choice for computer users in browsers and other software.

It comes as new European laws are forcing Apple to open up its iPhone. Under the new Digital Markets Act, the company will have to allow alternative app stores and web browser engines on the iPhone.

Apple has claimed the changes will make the iPhone less safe.

Source : The Finanser