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    Home » The EU Plans to Open an Office in San Francisco, and its Antitrust Enforcement Puts Big Law Attorneys on the Front Lines of Big Tech Regulation

    The EU Plans to Open an Office in San Francisco, and its Antitrust Enforcement Puts Big Law Attorneys on the Front Lines of Big Tech Regulation

    May 19, 20225 Mins Read Regulation
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    On the heels of the arrival of several Big Law firms in Northern California, one of the world’s leading antitrust enforcers, the European Union, is planting its flag in the region as the clock runs down on a set of new competition rules aimed at the tech industry.

    The EU said last month it plans to open a San Francisco office in the fall, though the purview of the office is not entirely clear. The EU said the new outpost will operate under its Washington, D.C., office, which is overseen by the bloc’s foreign affairs branch.

    Still, the EU’s arrival suggests that Big Law firms have placed their bets in the right market, as the region’s heavy base of tech companies draws increasing attention from regulators.

    “It sends a strong, symbolic message to the industry that not only is the cop on the beat, but the cop is moving in next door,” said Brian Byrne, a San Francisco-based antitrust partner at Cleary Gottlieb Steen & Hamilton, though he cautioned that the office may not include a function of direct law enforcement.

    He added, “As a practical matter, it allows them to be fully immersed in the tech industry, and more active in policy debates and discussions on the ground.”

    Demand for Competition and Privacy Lawyers Grows 

    Demand for competition expertise is tremendous, according to Byrne, who noted that Cleary’s tech clients “derive enormous value” from attorneys in both the U.S. and Europe having a deep understanding of their business and the real-world implications of a variety of regulatory actions.

    Byrne himself relocated from Cleary’s Washington, D.C., office to help it launch in Northern California last year, along with fellow antitrust partner George Cary and Wilmer Cutler Pickering Hale and Dorr antitrust practice leader Heather Nyong’o. The firm counts Google among its clients, which it recently defended in an antitrust battle against the EU.

    Likewise, Paul, Weiss, Rifkind, Wharton & Garrison signaled its intentions to expand to Northern California back in 2020 when it hired prominent tech litigator Karen Dunn, who represents Apple in ongoing litigation against Epic Games, from Boies Schiller Flexner.

    And the region’s own tech law firms are bullish on growing their government-facing litigation practices. Last year, Wilson Sonsini Goodrich & Rosati brought on Brent Snyder, formerly the CEO of the Hong Kong Competition Commission and the U.S. Department of Justice’s highest-ranking criminal antitrust enforcement attorney.

    Cooley has also been busy growing its competition capabilities, branching out into new regions for its base of increasingly global tech and life sciences companies, according to competition partner Alexander Israel, who helped the firm launch in Brussels in 2019.

    “Cooley is embedded in Silicon Valley and close to high-growth clients. We saw a great opportunity to be involved with these clients [as] they grow, come to the European Union or have a transaction where they need help getting approvals across the board,” Israel said.

    As part of the firm’s approach, it has added not only antitrust lawyers, but also privacy, life sciences and product liability counsel in response to client demand for connection between those practice areas. It also seeks out experts in other jurisdictions as needed, according to Israel.

    “We have a coherent strategy around the world, and then we work with local counsel in smaller jurisdictions to understand the specifics,” he said. “That is where you want to be as a global firm, where you have the main aces covered, and can be a strategic adviser to a company.”

    ‘Out in Front’ of the Big Tech Industry

    The EU’s arrival in San Francisco is timely. The bloc’s new Digital Markets Act and Digital Services Act—the former of which takes aim at tech “gatekeepers”—are expected to go into effect in 2023.

    Big Law attorneys highlighted the DMA in particular because of its focus on tech “gatekeepers” with a core platform such as a search engine or social media network and, importantly, a market cap of £75 billion ($93 billion) or more.

    While the EU maintains the legislation would even the playing field for smaller tech companies, opponents of the bill have criticized its narrow scope in seeking to limit activity that could help U.S. tech companies increase their dominance in the marketplace. For example, it could force Apple to allow users to install apps from outside of the App Store.

    The regulation is expected to impact about 30 companies, including Amazon, Apple, Google, Meta and Microsoft.

    Only one or two European companies would likely fit the bill, according to Cooley’s Israel. Though, on the bright side, that does limit the impact on the broader enforcement landscape, he said.

    Byrne observed that it is interesting to see the European Union once again “out in front of regulation in the tech industry—an industry that is fundamentally a U.S. industry,” he said, though he notes a push from the Federal Trade Commission and the DOJ could result in similar regulations in the U.S.

    The targets of the legislation aside, attorneys also pointed out the potential consequences of regulation: limiting innovation and consumer benefits.

    Israel described the DMA as a “static regulation” that could harm innovation or miss the market with some of its goals if it does not adapt along with the tech industry.

    Byrne similarly cautioned that the legislation could create disincentives for tech companies to make investments in improving their products while driving up costs as companies seek to comply with regulations in various parts of the world.

    It’s important to remember that this is the ”same industry that has made our lives a whole lot better,” he said, noting that the impact on the consumer appears to be falling out of focus in the current environment.

    “We carry a supercomputer around in our pockets. We can connect with everyone we know. We can order goods and have it delivered the same day,” Byrne said.

    He continued, “Yet, there is an awful lot of scrutiny coming at these clients from different directions. An important question, for the goals of this legislation and enforcement more broadly, is how much consumer welfare do the agencies want us to give up?”

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