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Tensions rise with EU over Digital Markets Act, tech policies

Congress members want the Biden administration to confront the EU about technology policies targeting U.S. businesses.

The European Union is moving ahead with regulations that target emerging technologies such as generative AI and large digital platforms, heightening national security and competition concerns among U.S. Congress members.

A bipartisan group of 46 U.S. representatives led by Reps. Suzan DelBene (D-Wash.) and Darin LaHood (R-Ill.) raised their concerns in a letter to President Joe Biden in June that the EU's technology policies such as the Digital Markets Act will harm U.S. businesses and employees. The letter said that if the EU's policies are left unaddressed, "the discriminatory elements of these policies will weaken American competitiveness by unfairly advantaging domestic European firms and inadvertently benefitting Chinese, Russian, and other foreign-owned competitors."

It's not the first time Congress members have taken issue with the EU's technology policies. DelBene and LaHood first sent a bipartisan letter signed by 30 U.S. representatives to Biden in February 2022, urging the administration to ask for changes to the Digital Markets Act, which specifically targets large U.S. companies such as Google, Apple and Amazon. Experts have also begun to worry about the lack of cooperation between the U.S. and EU on global tech standards amid growing concern about Chinese influence.

But the Biden administration has yet to push back outside of comments made by leaders including U.S. Secretary of Commerce Gina Raimondo, who in 2021 asked that the EU treat U.S. businesses and products fairly in legislation such as the Digital Markets Act and Digital Services Act.

The recent letter to Biden reiterates Congress's frustration with such legislation and Biden's approach to trade and technology policies, said Nigel Cory, associate director of trade policy at the Information Technology and Innovation Foundation.

We're two-odd years into the administration, and we haven't seen any real action against these polices, which are clearly discriminatory against U.S. firms.
Nigel CoryAssociate director of trade policy, Information Technology and Innovation Foundation

"We're two-odd years into the administration, and we haven't seen any real action against these polices, which are clearly discriminatory against U.S. firms," Cory said.

Congress wants more from U.S.-EU Trade and Technology Council

In the letter, the lawmakers asked Biden to raise these trade and technology policy concerns with EU leaders during meetings of the U.S.-EU Trade and Technology Council (TTC) -- a forum established in 2021 to facilitate discussions and alignment between EU and U.S. leaders on these issues.

In prioritizing good relations with the EU, the Biden administration has been reluctant to call out EU policies targeting U.S. tech companies and other digital laws and regulations, such as the EU Data Act and AI Act, Cory said.

"They just haven't used the TTC to directly confront Europe," he said. "It raises the big question of, what use is the TTC if it's not to directly confront these policies which clearly run counter to the stated aims and goals that both sides committed to in launching it?"

Cory said one of the factors likely stopping the Biden administration from pushing back is that key members of the administration and Congress align ideologically with the EU's efforts to rein in big tech. Several Congress members, including Sen. Amy Klobuchar (D-Minn.), have introduced legislation to regulate big tech companies.

The U.S. does have an opening to discuss trade and tech policy issues through the TTC's working group on global trade challenges. Still, it remains to be seen whether the existing dynamic of the council will allow those concerns to be fully addressed, said Matthew Eitel, program officer for the Digital Innovation Initiative at the Center for European Policy Analysis.

As the EU advances its digital economy regulations, the U.S. could fall behind in setting the rules of the road for businesses and the use of emerging technologies, Eitel said. It could also open U.S. businesses to potential security concerns as policies such as the Digital Markets Act require large companies classified as "gatekeepers" to provide third-party access to technical and operational infrastructure as well as data.

"Simply put, the U.S. will cede [to Europe] the ability to set the rules for where, when and how U.S. companies can conduct business and the consequences of not following those rules," Eitel said.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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