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April 2, 2015

5 court cases rewriting tech rules in Europe

Litigation and inquiries are making the Old World more uncertain.


Technology is one of the great drivers of social change, altering how we work, play and talk over each generation.

But such influence comes with heavy scrutiny, and technology’s encroachment on life is increasingly attracting the interest of courts on both sides of the Atlantic. Over the last few years Silicon Valley has been regularly hauled in front of the courts, and the legal system in Europe is particularly vociferous in making its views felt.

That in mind, we take a look at some of the groundbreaking cases set to change the tech industry in Europe.

1. Google

Like Microsoft before it, Google has found that dominating a market makes you a prime candidate for a probe from the European Commission.

Accounting for 90% of search in Europe, the search engine has faced accusations of abusing its market position to flog its own products. In particular some firms allege that the search engine ranks its own products higher than rivals in search results.

This has forced Google to defend itself from the European Commission regularly since 2010, with proposed remedies thrown out several times. So long as the firm can plausibly be described as "the gateway to the Internet" such complaints are likely to continue.

2. Uber

The upstart taxi-booking app Uber has provoked outrage from cabbies around the world since it started in San Francisco in 2010.

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Some of the most vocal opposition has been in Europe, where Uber has received cease and desist orders as well as outright bans. Countries such as Germany and France have contested the service in court, whilst Spain has temporarily stopped the service.

Uber is set to contest such decisions, and has filed a complaint with the European Commission against Spain and Germany. Whether they win or lose the effect on the renting economy will be seismic.

3. Facebook

Social networks have made the collection of personal data easier than ever as people obligingly publish details of themselves and their interests that would have cost firms millions to record.

Some would argue that this is the price of a free service, but people like Austrian privacy activist Maximilian Schrems have taken issue with Facebook holding their data, particularly in the US. Indeed Schrems argues that in the wake of leaks from NSA whistleblower Edward Snowden the "safe harbour" laws that allowed such information to be transferred between the EU and the US should be reviewed.

Having initially lodged his claim in Ireland the case has recently been heard in the European Court of Justice, the EU’s highest court. Should Schrems be victorious the judgement could rewrite the laws of data residency throughout the continent, and potentially cost firms a mint.

4. Ecommerce

Buying goods from one European country to take to another is standard practice in much of the continent, but the European Commission is worried that the digital world is not so fluid.

As such Margrethe Vestager, competition commissioner, has announced plans to investigate why online retailers are able to charge people in one country a different price from what they would charge in another. This applies not only to physical goods, but digital streaming services such as Netflix, which maintain different catalogues across different countries.

"European consumers should be able to access goods, content and other services no matter where they live and travel in Europe," Vestager said, adding that companies which do not comply with this could be breaking the law. Whatever the decision, it will have profound impact on Europe’s digital marketplace.

5. HP and Autonomy

Tech entrepreneur Mike Lynch has been quarrelling with HP since the company was forced to deduct $8.8bn from the value of software company Autonomy in 2012, which HP had bought from Lynch the year before.

HP alleges that Lynch misrepresented the nature of his company to them before he made the purchase, whilst Lynch believes that HP mismanaged the acquisition afterwards. The dispute came to a head again only this week, with both parties deciding to sue each other in London.

Lynch is seeking $100m in damages for what he describes as a "smear campaign" against him, whilst HP wants $5.1bn – the amount of the write-off it believes Lynch is responsible for. The fallout could do serious damage to either party, with the cases likely to drag on some years hence.

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