Protecting U.S. tech companies from the EU's regulatory regime will present a challenge to U.S. officials, who have pursued antitrust cases against big tech.
As President Donald Trump engages in trade negotiations with countries globally, including the European Union, he should focus on the growing number of rules targeting big U.S. tech companies.
That's according to a panel of experts speaking during an online panel discussion hosted by the Information Technology and Innovation Foundation (ITIF) on Tuesday. ITIF President Rob Atkinson said laws such as the Digital Markets Act (DMA) and Digital Services Act (DSA), which largely target companies with substantial online digital platforms like Amazon, Apple and Google, attempt to "weaken American advanced technology companies."
It's going to be extremely difficult for the Trump administration and subsequent administrations to fight back against this.
Martijn RasserSenior director for economy, Special Competitive Studies Project
Trump has already raised concerns about EU rules that he says treat U.S. businesses unfairly. He also expressed displeasure with the significant fines levied against big tech vendors, which he described as a form of taxation.
Given the EU's steadfast approach to regulating large tech companies, panelist Martijn Rasser, senior director for economy at the nonpartisan think tank Special Competitive Studies Project, said it will be difficult for the U.S. to push back against EU rules. The EU takes "a lot of pride" in the “Brussels Effect,” or how the EU sets the tone for regulating issues in the technology industry, including data privacy, AI and online digital platforms.
"It's going to be extremely difficult for the Trump administration and subsequent administrations to fight back against this," he said during the event. "But it absolutely has to be done because the last thing we want to see is things like the DMA becoming the blueprint for the rest of the world."
U.S. tech companies face global regulatory regimes, fines
Even before DMA and DSA, Hilal Aka, policy analyst at ITIF, said older EU rules like its General Data Protection Regulation (GDPR) have largely targeted U.S. companies.
"U.S. companies paid more than 80% of all GDPR fines," since the law came into force in 2018, she said during the panel. "That's almost $12 billion."
Now, by adding more EU rules like the DMA and DSA, Aka said U.S. tech companies will be forced to deal with more barriers and potentially face hefty fines.
Other countries are also starting to follow in the EU's footsteps. Turkey has proposed a bill similar to the DMA with fines of up to 10% of the offending company's global revenue -- despite the country being a comparatively small market, Aka said.
An added challenge is the U.S.'s own attempts to rein in tech giants. The U.S. Department of Justice recently won two antitrust cases against Google, in which the company was found to hold an illegal monopoly over the online search market and online digital advertising technology.
"Our own antitrust policies are really tough on big tech," Aka said. "We can't really say, 'you can't do the DMA,' unless we actually have consistent domestic policies."
Panelist Nazak Nikakhtar, a partner at Wiley Rein LLP, said she doesn't think the Trump administration can do much to convince Europe not to enforce the DMA or DSA. "We are maybe even on the brink of U.S. companies abandoning those markets because of legal liability risks," she said.
Rasser, on the other hand, said there could be opportunities for the Trump administration to negotiate down overall fines for U.S. tech companies.
He said a growing undercurrent of dissatisfaction among businesses in the EU with the EU’s regulatory regime may also trigger changes in national elections that could make officials more amenable to negotiations with the U.S., he said.
"It might be time to come up with some new approaches and show that we're taking this very seriously and are willing to escalate this in a way that prior administrations have not," he said.
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
