It is a tough choice: risk fueling transatlantic tensions or continue with the European Union’s longstanding commitment to tech regulation.
The US administration has derided the DMA as a “tax” or “tariff” on US companies and threatened retaliation. On April 2, the US plans to impose so-called “reciprocal” tariffs by increasing US duties to match the tax rates other countries charge.
Europeans are scrambling to respond. European Commission President Ursula von der Leyen has postponed imposing retaliatory tariffs until mid-April, hoping to broker a truce. At the same time, she is reportedly considering hitting US tech exports, including restricting intellectual property rights and excluding US companies from winning European public procurement contracts.
For now, European regulators are treading cautiously. They recently announced that Google and Apple had violated the bloc’s Digital Markets Act, giving their products an unfair advantage over others, and they are set to impose minimal fines on Apple and Facebook owner Meta.
But they remain far from declaring an all-out tech war. The recent European findings represent preliminary judgments. Both American companies now have an opportunity to “respond” and attempt to resolve the charges.
The regulators charged that Alphabet leveraged its dominant search engine to steer users to other Google services and impose unfair restrictions on app developers on its Google Play store. Apple was accused of making it difficult for connected devices to sync with its iOS mobile operating system.
Both companies pointed out the problems with consumer decisions and security. Google said in a blog post that the EU’s competition rules are “hurting consumers and businesses.” As an example, it pointed to flight search. Because of the DMA, when Europeans search for flights, searches no longer lead directly to airline sites but to price comparison sites that receive commissions, leaving most consumers forced to buy a more expensive ticket.
Apple charged that European interoperability raises risks to security and “exposes your personal information.” It complained that “data-hungry companies across the globe may weaponize interoperability” and pointed its finger straight at Meta. The Facebook and WhatsApp owner is “seeking to alter functionality in a way that raises concerns about the privacy and security of users, which appears to be completely unrelated to the actual use of Meta external devices, such as Meta smart glasses.”
The sparring underlines how US companies are attempting to leverage the new European DMA rules. The large unanswered question is how these antitrust conflicts will impact the already tense transatlantic relationship, which is reeling from spats over trade and climate change, not to mention Ukraine and defense spending. Under President Joseph Biden, the US launched antitrust court cases against Apple and Google. In private, Biden officials said they agreed with the new European rules. The Trump administration has kept the US antitrust cases alive, and the Justice Department recently reiterated its demand that Google be broken up.
A tech war would hurt both sides. Europe will struggle to substitute homegrown tech for US offerings, and US companies risk seeing their access limited to the large and lucrative European market. They are also using the new European rules to fight each other. Artificial intelligence and cloud computing demand giant investments that European companies will struggle to provide. Amazon, Microsoft, and Google own over two-thirds of the European market. Europe needs US and Asian semiconductors: the continent accounts for just 10% of the global microchips market.
The risks for the US are equally large. In return for the US’s security support, American tech companies gained access to the world’s most significant economic and trading bloc. That access is now under threat. European calls are rising to impose sovereignty requirements on US cloud providers and reinforce vetting of US investments in critical security areas.
A definitive split is not inevitable. The Trump administration could pivot to tone down the trade tensions in Europe and deliver on other areas, most notably defense spending. For their part, Europeans should gather together and reboot their economies. They could reduce burdensome digital regulation and realize digital sovereignty could produce digital poverty. Europe and the US working together to compete in the global tech race will benefit both sides, and that should be the bigger strategic vision for Europe and the US.
This article was revised and updated on March 28.
William Echikson is a Non-resident Senior Fellow with the Tech Policy Program and editor of the online tech policy journal Bandwidth at the Center for European Policy Analysis.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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