Innovation

Jennifer Huddleston | From the April 2024 issue

For years, iPhone users have been saddled with an unusual feature: The popular Apple smartphone used a proprietary cable, called the Lightning cable, for charging.

By the 2020s, most manufacturers of comparable devices had switched to a universal standard, USB-C. Even some other Apple devices—including the iPad, which in many ways resembles an oversized iPhone—moved to the common USB-C. But the iPhone remained stubbornly attached to its Apple-specific cord.

Inevitably, this caused headaches and complications for some iPhone users, even those fully ensconced in the ecosystem of Apple devices. What if you want to borrow a friend's charging cable and that friend uses an Android phone? What if you're also lugging around an iPad? How many charging cords does one person really need to carry?

But the iPhone 15, released in 2023, uses the USB-C port for charging—in Europe, the U.S., and everywhere else. Starting with this model, Apple customers won't have to worry about what type of phone their friends have when asking to borrow a charger.

This change didn't come from a new innovation or from consumer demands. It was mandated by European regulators.

In September 2021, the European Commission proposed a common charger regulation, claiming it was appropriate to reduce electronic waste and consumer frustration. The proposal was passed in 2022, and the mandate goes into effect in 2024.

This might sound like a boon for users. But in the long term, this sort of rule threatens to thwart future innovation by locking tech companies into government-determined feature sets that can be updated or improved only with regulatory approval. Rules like this turn bureaucrats into product designers.

The charging rules are a symptom of a larger problem. E.U. bureaucrats' "regulate-first" approach has been spreading beyond Europe's borders to impact American companies and American consumers. Unfortunately, many American policy makers seem to be looking to Europe as a model.

Many Americans first experienced the impact of the European regulatory approach in May 2018, when they started noticing more click-through requirements to accept cookies and updated privacy policies. All those annoying security pop-ups and repeated notice of updates to terms of service on websites were the direct result of General Data Protection Regulation (GDPR), an E.U. policy that required companies to adopt specific practices around interactions with user data and users' rights related to those data.

The GDPR didn't just bring a bunch of annoying pop-ups, it also caused huge corporate compliance costs. When the GDPR went into effect in 2018, companies reported spending an average of $1.3 million on compliance costs. A Pricewaterhouse-Coopers survey found that 40 percent of global companies spent over $10 million in initial compliance. These weren't one-time costs; some companies spend millions annually to comply.

Unsurprisingly, some organizations decided to pull out of the E.U. market entirely rather than comply with these rules. Others chose to deploy these changes all around the world rather than try to tailor compliance to the European Union. In other words, they treated the E.U.'s rules as global requirements.

This is a common result of tech regulations: Laws passed in one region end up affecting citizens located in other areas as companies standardize practices.

Consider the Digital Markets Act (DMA), a European regulation that went into effect in 2022. Under this law, regulators can put additional restrictions on otherwise legal........

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