Zach Meyers / May 2025
Image: Shutterstock
The last European Commission produced a frenetic amount of digital regulation. From the Digital Markets Act (DMA), which aims to boost competition and fairness among the largest digital platforms, to the Artificial Intelligence Act aimed at making AI trustworthy, most of these laws have had disproportionate impacts on US tech giants.
In the past, the EU paid little attention to US opposition to its digital law-making. Under president Biden, the US even started to adopt aspects of Europe’s approach – such as a tougher approach to perceived anti-competitive conduct by America’s tech giants and a willingness to regulate AI. Under president Trump’s second term, however, the pendulum has swung back to criticising Europe – and this time with teeth. While US tariffs on the EU have so far been limited to goods rather than services, the White House has issued a memorandum warning the United States might retaliate against the EU’s tech laws, which the administration sees as “unfair exploitation of American innovation.” The Judiciary Committee in the Republican-controlled House of Representatives, the lower chamber of Congress, has also written to the European Commission’s Executive Vice-President Teresa Ribera, alleging that EU tech laws “discriminate” against US firms.
So far, Europe’s response to the threats has been subdued. The Commission has continued to enforce the DMA – imposing new rules on Apple, fining the company €500 million and imposing a penalty of €200 million on Meta. But those proceedings all started before Trump was re-elected, meaning the Commission had little choice: it could either plough ahead or make an embarrassing backdown. Nevertheless, suspicions abound that the Commission took extraordinary steps to minimise the risk of US backlash: the fines were much lower than for past antitrust infringements and they were announced after unexplained delays and with little fanfare. The Commission also coupled the decisions with news to placate the two firms: the Commission ruled that the DMA did not apply to Facebook Marketplace and it dropped a second investigation against Apple. Finally, the Commission has been strangely silent about the progress of an investigation against Elon Musk’s X social network – which would be potentially much more politically explosive.
These growing perceptions that the Commission’s enforcement of digital laws is being politicised pose grave risks for the EU. EU regulations protect important European values such as open competition, transparency and privacy. Emasculating enforcement to appease the US would undermine the EU’s promise of a predictable and rules-based order – which could now be one of Europe’s main competitive advantages over the US in attracting new investment. Politicised enforcement would, in particular, harm the many smaller businesses which have been counting on full enforcement of the DMA to improve their access to US tech platforms.
How, then, in the context of US belligerence, can the EU continue to enforce its laws effectively – and be perceived to be doing so impartially?
In the long term, the EU should do two things. First, it could build on the EU’s market size to help support the emergence of innovative European players – reducing Europe’s unilateral dependence on US services. That would make Europe less fearful of US retaliation. It would also make retaliation less likely: as European tech firms became larger and more successful, and more heavily regulated for example by laws like the DMA, Europe could then more easily demonstrate that its regulations are not discriminatory. Second, the EU could look to establish an authority independent from the Commission, which would be empowered to apply and enforce EU digital laws – providing much stronger assurances that laws will be enforced without fear or favour.
More immediately, the EU can adjust its approach to digital law-making to reduce transatlantic tension – without compromising on the values EU regulations aim to protect. One step would be for the Commission to focus more on outcomes, rather than dictating exactly how tech platforms design their services. Online safety laws, for example, require large social media platforms to mitigate risks, but allow firms to decide how they do should that. This flexibility could help American firms accommodate both US political sensitivities and European regulatory requirements. For example, while some firms have removed safety measures that the US considers objectionable, they have simultaneously taken positive steps in Europe, such as adopting the recently updated voluntary code of conduct to fight hate speech.
Giving technology companies more flexibility to navigate the increasing chasm between EU and US approaches to regulation – while at the same time setting up an independent enforcement agency and nurturing Europe’s own tech successes – will all be crucial steps to showing the EU’s commitment to a sensible and predictable regulatory regime, with rules which are applied impartially to all. This will help the EU increase its attractiveness for investment, and maintain its global influence, at a time most countries do not want to follow the US president’s techno-libertarian approach.
