Have you ever borrowed a friend’s charger just to find that it’s not compatible with your phone? Or have you ever wondered what to do with the battery pack you’ve accumulated from all the devices you’ve purchased?
These inconveniences will soon go down in history after the EU ordered on June 7, 2022 that all small and medium-sized portable devices should be equipped with a USB-C charging port in the fall of 2024. laptops should be under the new standard in the fall of 2027. Disaggregation will also be mandatory: Chargers will no longer come with new phones, but will be purchased separately, if necessary, when you purchase a new phone. According to the EU announcement: “This law is part of a wider EU effort to make EU products more sustainable, reduce e-waste and make life easier for consumers.”
The European Commission first announced that it was discussing the need for a common charger with industry in 2009, so many manufacturers have already aligned their production with the new standard. As a result, more than 30 different charger models have now been reduced to just three: the new standard USB-C, the mini-USB, and Apple’s Lightning charger.
A common charger should be less wasteful and cheaper, as well as make life easier for consumers: what’s wrong with that? According to Apple, a lot. The technology company has criticized the standardization plan, arguing that regulation could hinder future innovation. But the new rules mean it has been forced to add USB-C charging capabilities to its next-generation phones anyway. This shows the power of the EU to affect the development of markets and industries beyond its borders.
Consumers have benefited from improvements in charging technology over the years, but the concern is that a common charger requirement could stifle innovation making it impossible to develop and release even better versions. Imagine if regulators forced you to install a CD player on laptops or even a headphone jack on mobile phones, for example. A study commissioned by Apple estimates that the potential loss of value for consumers to block innovation in this area is billions.
The Commission argues that the legislation is flexible enough to allow innovation. It even explicitly seeks a common standard for wireless charging as soon as the technology is mature enough. This standard could be adopted in 2026, with the only limitation that the future wireless standard is the same for all businesses.
Annoying little brothers
Finding a common standard is often in the interest of manufacturers. In addition to helping to reduce costs, it offers the opportunity to compete on equal terms. The prospect of a future common ground also fosters competition to provide the resulting product. This often causes manufacturers to cooperate without government intervention, both nationally and internationally.
In fact, USB is already a collaborative company founded by major technology players such as Microsoft, HP and even Apple. The difference with Apple Lightning chargers, however, is precisely that the technology is not collaborative and is patented. Anyone can add a USB port to an electronic device, but only Apple products can use their Lightning ports.
Economists call this an “annoying little brother” situation. Apple is by far the largest technology company in the world. While everyone wants their product to be compatible with Apple, they want exclusivity. So the main risk of the new regulation may not be to hinder innovation in general, but to block new Apple-exclusive designs.
As such, the EU has chosen the collective benefit of a common standard over the benefit that some consumers can derive from the exclusivity of Apple products. Other regulators may be more concerned about not harming Apple’s profits, but the EU seems to believe that this point is irrelevant to the well-being of European citizens.
EU regulatory decisions can have important implications beyond European borders. Stephanie Lecocq / EPA-EFE
The Brussels effect
On the other hand, the EU’s decision to standardize chargers is likely to have global implications. Once technology manufacturers switch from offering the common charger to European customers, it could be costly to produce a different technology for other parts of the world.
Once a product complies with EU regulations, companies often choose not to make a different version for the rest of the world. EU rules on health and safety, recycling or chemicals often force global manufacturers to change their practices everywhere, for example. And when a smaller player like the UK insists on having their own certification, it just becomes a costly bureaucratic replication exercise.
Take the GDPR as an example. Since 2016, global websites have changed the user experience to comply with European data protection law. Companies such as Facebook and Google have adapted their business models to meet the new standards derived from the EU Digital Markets Act, drastically reducing the ways in which they can make money with consumer data. Businesses are not required to enforce EU law worldwide, they often find it easier to do so.
Known as the “Brussels effect”, this means that lawmakers representing Europe’s 400 million people often end up deciding on standards for the rest of the world. Standardization and regulation decisions are usually made after an analysis of the cost and benefits of the different options. In the case of the GDPR, some studies estimate that the cost of privacy innovation is significant.
While U.S. lawmakers think this cost outweighs the benefits, their preference has become almost irrelevant. Larger technology companies are headquartered in the US, but their regulation has been delegated to the EU in practice, simply because their regulators acted first.
In the case of the common charger, the direct risk to innovation is likely to be minimal and consumers should be fairly satisfied with the new rules. The underlying issue is truly democratic: standards are often set by regulators who act first. Others need to see how markets develop from the sidelines.