New EU Regulations Slam Big Tech, So What Might That Mean for CRE?

Today is the culmination of battles between the EU and major tech companies, such as Google, Apple, Meta, Microsoft, TikTok parent ByteDance, and Amazon. Regulations in Europe are now in place to promote competition and prevent the giants from controlling and potentially crushing other companies.

Already changes are in the works, as a series of CNN stories report. Apple announced that third-party app stores would start to appear on its devices and that fees for developers in the EU would drop from the 30% seen in the U.S. to 17%. Google said it would alter its search algorithms to push more traffic to certain third-party services. Meta is supposed to open its Messenger and WhatsApp products to third-party chat software.

GlobeSt.com reached out to all the companies. At publication time, only Meta replied, that with a link to a report on its consumer profiling and advertising delivery techniques.

The EU regulations, which have no sway of law in U.S. operations, don’t necessarily mean anything directly for commercial real estate here. But they do raise questions of where software might be developed, the use of common resources, and where more competitive applications might arise.

The U.S. has had some significant advantages in computer technology and software development. Not to say it is a sole source of innovation. Far from it. But the combination of first mover advantages, funding infrastructures, and long attention to innovation has helped the U.S. keep an important role in the industry. Notice that out of the major tech companies the EU regulations have targeted, all but one are based in the U.S.

The strength of the infrastructure also leads to a concentration of technical and economic power. A giant company can force its terms and conditions on smaller businesses that depend on services, advertising access to consumers or cloud computing. The big companies lock in their higher revenues, acquire potential competitors before they can get too large, and direct the ecosystem for their interests. The latter is understandable, but it doesn’t necessarily deliver the maximum benefit to the infrastructure itself and what smaller companies could achieve with it.

What the EU regulations means is a potential region where the big tech companies still provide broad benefits, but where they might ultimately be redirected in ways that make it easier for smaller companies to innovate and offer compelling products and services.

While the CRE markets across the globe aren’t exactly the same, it could be that vendors in a broader sense of real estate could drive future software developments that could benefit the industry. Whether in building automation, applications of artificial intelligence, communications between property owners and tenants, or some other area, this could mean that the industry will have to start paying much more attention to what will be coming out of Europe.