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Sorry, Silicon Valley. Europe won't be any easier in 2017

Silicon Valley's tech titans clashed with powerful European institutions time and again in 2016. Next year looks to be no different.

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European Commission HQ in Brussels.

European Commission HQ in Brussels.

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The influence of big Silicon Valley tech companies stretches across the world, and Europe is no exception.

For US tech giants, Europe is often the first stop when growing their businesses internationally -- no surprise given the huge market opportunities the bloc presents. But that doesn't mean the voyage across the Atlantic is always smooth sailing. Not only are there local laws and regulations to deal with, but there's the European Union to think about too. Slow, sprawling and strict, it can be a tough nut to crack.

Silicon Valley companies like Facebook and Google provide services Europeans love to use, but consumers in Europe also have specific regional needs, such as protection from hate speech that gives rise to anti-immigrant, antirefugee sentiment. There's also the need to ensure that Europeans' personal data doesn't become easy prey for the prying eyes of the US National Security Agency.

It's needs and rights like these that much European red tape is designed to protect.

As 2016 draws to a close, we're seeing even the most established tech companies grappling with the political, economic and regulatory realities of doing business in Europe. These issues could alter the way they provide services to Europeans in 2017 and beyond.

Google vs. the EU

The EU's Competition Commission takes a dim view of business practices that don't benefit consumers. Big tech companies, Google in particular, bear the brunt of this.

Google and the European Commission have been at loggerheads on and off for years over various competition issues. There are three ongoing cases: Google prioritizing its own shopping results in search; another involving its advertising practices within search; and the last one focused on its Android software that runs mobile devices.

EU Competition Commissioner Margrethe Vestager

EU Competition Commissioner Margrethe Vestager has been leading the charge in the Google antitrust complaints.

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The Android complaint dates back to April. The Commission is concerned that consumers will automatically use Google's built-in apps, rather than explore other options. Google argues that Android's openness actually means more choice for consumers and that alternative apps can easily be downloaded.

"The Commission's approach would upset this balance, and send an unintended signal favouring closed over open platforms," Google General Counsel Kent Walker said in a blog post.

The EU said it would carefully consider Google's response. This means we can expect to see more action in this regulatory game of chess in 2017. Whether all three of these cases will wrap up over the next year is unclear, but the EU doesn't exactly have a reputation for speed.

Brexit

Will the UK actually get around to leaving the EU? Nobody knows, not even the politicians. But one thing's for sure: Silicon Valley's best and brightest certainly aren't jumping ship.

After the UK voted to leave the European Union in June, many predicted the end of the London tech scene. There was much discussion around the potential for a "brain drain" as talented employees leave the country to continue working within the EU.

The infamous "Vote leave" battle bus, parked outside the Houses of Parliament.

The infamous "Vote leave" battle bus, parked outside the Houses of Parliament.

Jack Taylor/Getty Images

Following the referendum, however, Amazon said it would hire 3,500 people across multiple departments in the UK within the next year. Google and Facebook also pledged to increase their UK presence in 2017.

Much is still up in the air when it comes to understanding the short- and long-term impact of Brexit on the UK and European tech scenes. But Brits hoping to score themselves a job with a Silicon Valley giant in 2017 might be in luck.

Uber and Airbnb

The aggressive expansion of Silicon Valley's two best-known "sharing-economy" companies, Uber and Airbnb, has them running into regulatory hurdles.

Uber is trying to persuade Europe's highest court that it's a software company and not a taxi service. The results of that case could affect Uber's ability to roll out its service, forcing the firm to comply with European taxi laws and curtail its expansion into adjacent areas, like food delivery.

Airbnb bowed to pressure this month from regulators to limit the number of nights per year hosts could rent out properties in London and Amsterdam. It was the first time the company has made such a concession, having previously argued that it couldn't be responsible for policing listings on a city-by-city basis. It operates in 34,000 cities around the world.

Uber has been well received by customers in Europe, but the local taxi drivers haven't all been so welcoming.

Uber has been well received by customers in Europe, but the local taxi drivers haven't all been so welcoming.

Jaap Arriens/Getty Images

Until now, local rules in Amsterdam and London prevented hosts from renting their properties for more than 60 and 90 nights per year, respectively, but the cities haven't had any way of enforcing the regulations. With Airbnb's cooperation, this is set to change.

The company is seeking to reduce regulatory problems by creating more deals that would let cities collect rental taxes, such as the deal it already has in San Francisco.

Privacy and data sharing

Companies like Facebook and Google have users all over Europe, but their data is still transferred back to data centers in the US rather than stored locally on the continent. The Edward Snowden revelations showed that the NSA's mass surveillance activities have taken advantage of this data.

In July, the Privacy Shield agreement was introduced to replace the Safe Harbor agreement, which had governed data transfers between Europe and the States. The EU ruled that Safe Harbor was illegal in 2015. Unlike Safe Harbor, Privacy Shield supposedly prevents indiscriminate mass surveillance of data by the US government, but some activists claim the privacy of European citizens is still being jeopardized.

A legal challenge against Privacy Shield has already been filed in a European Court, which many privacy activists believe will result in the agreement being annulled, just like Safe Harbor. Without a deal in place, US companies would be legally obligated to store all European customer data in Europe. In theory this would mean extra protection for European tech users against the US government's prying eyes.

Hate speech

In the middle of 2015, the European Commission against Racism and Intolerance observed a dramatic increase in online hate speech, which it attributed to "conflicts in the Middle East, acts of Islamist violence in Europe and incidents of unprecedented mass arrivals of migrants."

Europe has seen a rise in fascism and hate speech. Here, 300-400 right-wing activists, including neo-Nazis, march in Berlin. The demonstration took place this past November.

Europe has seen a rise in fascism and hate speech. Here, 300-400 right-wing activists, including neo-Nazis, march in Berlin. The demonstration took place this past November.

Markus Heine/Getty Images

In May, the European Commission joined with Facebook, Twitter, YouTube and Microsoft to launch a code of conduct to banish illegal hate speech from their respective platforms. The companies pledged to pull down hate speech within 24 hours of it being posted and to promote counternarratives.

This week, the Commission published its first evaluation, showing that 28 percent of all notifications of alleged illegal online hate speech led to the removal of the flagged content. But it took up to two days to review 43 percent of the notifications.

"While IT companies are moving in the right direction, the first results show that the IT companies will need to do more to make it a success," said Věra Jourová, commissioner for justice, consumers and gender equality.

From hate speech to competition issues to privacy, Europe's message to Silicon Valley heading into 2017 is the same across the board: If you want to do business here, you've got to play by our rules and treat European citizens fairly.