US Tech companies in Europe: it is a question of trust

Grégoire Poisson, Managing Partner of our EU practice, recently took part in a debate in Washington DC about the new European Commission and the impact of its new structure. Here he gives us his views on trust and technology, in particular the sensitive issues around privacy, cyber security, data protection and intellectual property.

Conversations about digital and technology have become increasingly emotional and political in Brussels.  This shift was mainly triggered by the Snowden revelations that the U.S. Government was engaged in mass surveillance of European citizens, including Chancellor Merkel.

This has fundamentally changed the perception of technology companies – in particular U.S. companies and placed trust at the top of the political debate. The trust conversation has focused on a sub-set of particularly sensitive issues including privacy, cybersecurity, data protection and intellectual property.

The backlash against intelligence agencies, particularly the USA’s NSA and the UK’s GCHQ continues – and this has a negative impact on the ability of U.S. companies to sell into a number of European public sector markets, including Germany and France. 

The recent high profile cyber-attacks (IBM and Ebay or Sony Pictures Entertainment) have pushed the issue higher up the political agenda. 

Data transfer will have to be put on the TTIP negotiating table. To secure an agreement, U.S. politicians will want to see that they have the backing of the largest sectors, including technology.

The new European Commission is more political than the previous administration: Highly centralised in terms of message and decision making but also with a greater number of heavyweight Commissioners, including Margrethe Vestager, in charge of competition policy, who is not afraid of starting a fight with tech giants, as we have seen with the Google case.

Tech companies will need to ensure that they have a strong narrative which aligns with Juncker’s own political goals. They will also have to ensure strong national connections in markets where the competent authorities are particularly sensitive to the tech debate. For example, the German view on privacy has played a big role in defining the data protection debate.

The regulation of technology is likely to remain high on national agendas and companies will have to consider how they manage their reputation on all related fronts.