The EU must break up Big Tech

Teresa Ribera faces a formidable challenge. In September, Spain’s socialist deputy prime minister was tapped by European Commission President Ursula von der Leyen to take on the role of executive vice president for a clean, just and competitive transition, placing her in charge of two critical policy areas: competition and climate action.

This is a vast and highly contested portfolio. On the competition side, Ribera will inherit several landmark cases, including the EU’s effort to break up Google’s online advertising monopoly — an outcome that could reshape the digital economy.

On the climate front, the European Green Deal has triggered mass protests from furious farmers who argue that environmental regulations are driving up costs and making their products less competitive. Ribera’s strong green credentials suggest that she may decide to focus on saving the deal, potentially relegating competition policy, as a senior EU competition official quipped, to a mere “side dish.”

But Ribera does not have to choose between enforcing competition and climate action. As a recent report by the Open Markets Institute and other leading antimonopoly organizations explains, freeing Europe’s economy from the grip of tech monopolies is crucial to tackling the climate crisis and fostering green innovation.

Freeing Europe’s economy from the grip of tech monopolies is crucial to tackling the climate crisis

Cori Crider

Artificial intelligence is a case in point. In Barcelona, where I live, a severe drought limited households to 200 liters of water per day earlier this year. The recent floods that devastated Spain’s Mediterranean coast are the flip side of the same coin: we can expect more of these extremes in the coming years. But even as climate-fueled droughts grow more frequent and intense, US tech giants are building massive data centers in Spain to support AI expansion. These facilities consume enormous and growing amounts of energy and water, yet Big Tech firms hide their environmental impact. One study, for example, suggests that their actual carbon dioxide emissions could be 662 percent higher than reported.

Big Tech firms are not just draining Europe’s resources and straining the continent’s power grids; they also pose a direct threat to its economy. The data center boom is part of a broader effort to monopolize digital infrastructure. Companies like Alphabet (Google) and Meta (Facebook) know their current business models — which depend on addicting children, dividing societies and misusing personal data — are increasingly unpopular. That is why they are tightening their grip on a less visible yet essential part of the economy: infrastructure. Google, Microsoft and Amazon already control two-thirds of the world’s cloud infrastructure and their share is growing rapidly.

Big Tech’s monopoly power, more than any European law, undermines European tech firms’ ability to compete globally. Former European Central Bank President Mario Draghi warns in his report on EU competitiveness that the bloc risks missing out on the AI revolution unless it helps local firms thrive and compete. While industrial policy is vital to this effort, Europe’s tech industry cannot hope to challenge dominant firms like Google or Amazon in their current form. Because these giants control much of the world’s computing power and have amassed vast amounts of data, European AI firms are inexorably drawn into their orbit. Mistral AI, once touted as France’s AI national champion, illustrated this by partnering with Microsoft, which is also OpenAI’s largest investor.

Big Tech’s outsize power impedes the development of smaller, less carbon-intensive AI models. Fortunately, Ribera has the tools to confront their dominance and force them to comply with EU law, and some progress has already been made. Just last month, the European Commission won a major legal victory when the European Court of Justice overturned a lower-court ruling, ordering Apple to pay €13 billion ($14.2 billion) in back taxes to Ireland.

Contrary to the claims of industry lobbyists, the EU’s fight against Big Tech’s dominance is not about protectionism. In August, US antitrust enforcers secured a huge victory against Google when a federal court ruled that the company has maintained an illegal monopoly over online search, while another trial over its dominance of digital advertising is underway.

Contrary to the claims of industry lobbyists, the EU’s fight against Big Tech’s dominance is not about protectionism

Cori Crider

The ongoing US case against Google’s advertising monopoly tracks the European Commission’s 2023 findings in its case against the company, which concluded that only “mandatory divestment” of Google’s ad business would restore competition. While reports suggest that some EU regulators’ commitment to breaking up Google may be wavering, Ribera should hold firm. She should also consider assigning her best talent — such as the financial analysts behind the successful case against Apple — to the team designing a breakup.

More than technology is at stake. In a fractured EU increasingly threatened by the rise of far-right forces, European democracy itself is at risk. Ribera sounded the alarm in May, warning that the bloc faces a possible “implosion,” driven partly by the far right’s use of digital tools to spread disinformation and incite hatred. Meanwhile, Big Tech’s digital advertising monopoly has devastated the economic foundation of European journalism, making it harder to combat online manipulation and protect democratic institutions. To build consensus on the European Green Deal, Ribera should ensure a level playing field that enables the press to do its job.

The crises facing the natural and digital worlds are increasingly interconnected. In a recent essay, Maria Farrell and Robin Berjon propose a potential solution to both: “rewilding.” Once a diverse and healthy ecosystem, they argue, the internet has become a sterile, tightly controlled space. Restoring its vitality will require sweeping structural reforms.

In other words, meaningful change requires dismantling the monopolistic forces that have turned the internet into a walled garden. As Farrell and Berjon explain, “rewilding a built environment isn’t just sitting back and seeing what tender, living thing can force its way through the concrete;” rather, it is about “razing to the ground the structures that block out light for everyone not rich enough to live on the top floor.”

Europeans deserve better than what today’s tech giants are offering. While a competitive and sustainable EU is within reach, rewilding Europe’s economy will require decisive action to curb the invasive monopolies that currently dominate the digital ecosystem, consume our resources and pollute our public square. Ribera’s new role gives her powerful tools to clear the way for green innovation to take root. The right way to start is by breaking up Big Tech.

• Cori Crider is senior fellow at Open Markets Institute and the Future of Tech Institute. She previously co-founded Foxglove, a tech-justice NGO.

Copyright: Project Syndicate