What would European bureaucrats do without an active U.S. tech industry to bother? On Monday, for instance, Adobe and Figma called off their $20 billion deal in the face of European regulatory opposition. The deal would have led “to higher prices, reduced quality or less choice for customers,” claimed European regulatory czar Margrethe Vestager in a triumphant statement. But that wasn’t all. The Europeans also opened a formal investigation into whether Elon Musk’s X, formerly known as Twitter, has breached the Digital Services Act by (among other things) not doing enough to stop the “dissemination of illegal content”—such as hate speech—on the platform.
Neither of these latest moves is good for tech—or for competition. As my colleagues Cory Weinberg and Maria Heeter noted today in this report, killing the Figma deal will have a chilling effect on venture capital investment in startups, reinforcing the perception that one of the main exit ramps for startups and their backers is barred. The long-term effect therefore may be bad for competition, which is the opposite of what the Europeans intended. As for the X inquiry, the Europeans are trying to bring down a sledgehammer on a problem—how to curtail the spread of offensive speech—that requires more delicate handling. Musk’s approach to contentious speech (his own comments in particular) may not be perfect. But can anyone name a platform that has got it right?
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