Tech giants. Photo: Shutterstock.com

More than half of the world's legislative policies that target the global tech sector originated in Europe, according to a report issued by Hogan Lovells.

The report, titled 'A Turning Point for Tech', examines legislation and legislative initiatives in 16 legal jurisdictions in the first half of 2019. It found that more than half of the regulation aimed at the tech sector originates from the EU or its member states. By contrast, only 28% of legislation comes from the U.S. and 8% from Asia.

The report, written by lawyers across Hogan Lovells' global network, advises tech companies that regulation and antitrust enforcement are set to increase, and that they should be prepared to deal with their compliance obligations and the likely effect on their businesses.

"We expect competition law and regulation to continue playing a dual role – and tech companies need to find a coherent strategy to deal with both," the report states.

Hogan Lovells' report comes as Margrethe Vestager, the EU's antitrust head, is about to start her second term as the bloc's top competition enforcer. In recent speeches, she has promised to present new regulations aimed at ensuring fair competition in the tech sector. She has also said she will pursue more effective enforcement of antitrust rules.

In a speech in Dortmund, Germany on Tuesday, Vestager said she wanted to tackle the dominance of powerful digital platforms.

"In digital markets… being big can give a company such a huge head-start that it can be hard for smaller rivals to compete," she said. "Once a platform reaches a critical mass, the market can quickly tip in favour of that business, leaving no room for anyone else. We need to enforce the competition rules firmly, to stop digital platforms using their power to deny their rivals a chance to compete."

Vestager, who has been nominated as an executive vice-president of the European Commission with responsibility for digital issues as well as its competition head, said she was planning new regulation for digital platforms.

"Our digital future shouldn't just meet our needs as consumers – it should also respect our values as citizens. So alongside the competition rules, we also need regulations to make sure that platforms stick to those values."

Hogan Lovells' report says there is a global drive for greater regulation of the tech sector, "driven by competition law concerns for bricks-and-mortar businesses as well as by consumer protection concerns".

It notes that the EU has been a frontrunner in regulating tech and says where the bloc has led, the U.S. and other jurisdictions have followed suit. This is the case for antitrust enforcement. where U.S. federal authorities such as the Department of Justice and the Federal Trade Commission have launched their own inquiries into companies that the EU has investigated and sanctioned for anti-competitive behaviour.

This also applies to legislation such as the EU's General Data Protection Regulation (GDPR), which governs how individuals' personal data can be used by companies and public authorities. That legislation has influenced California's data privacy law.

The GDPR has been "an example of how Europe can shape the global playing field", the report states. "Looking at regulation coming from Brussels and EU member states, therefore, allows us to predict how global regulation may look in the coming years".

The report notes that calls for breaking up tech giants such as Google, Amazon and Facebook as a means of combating market dominance have been growing stronger in the U.S., while in the EU, "most stakeholders so far have considered this idea only as a measure of last resort".

"The European Commission has instead been levying multibillion-euro fines in an effort to curb anti-competitive practices of big tech companies by focusing on abuse of dominance cases, on access to data and dealing with tying of products and self-promotion of big tech's own offerings," Logan Breed, a partner in Hogan Lovells' Washington, D.C., office wrote.

The report also undermines the accusation that the EU is deliberately targeting successful U.S. tech companies with regulation and strong antitrust enforcement.

"Only 17% of the regulatory proposals we tracked name one or more of the leading U.S. tech companies, whereas the vast majority (83%) are company-agnostic and propose sector regulation," the report notes.