When European officials imposed antitrust fines on Silicon Valley giants, the US trade office criticized them for creating “massive uncertainty” for US exports. The House Judiciary Committee held dedicated hearings on “Anti-American Antitrust.”
But US court cases are proving more dangerous to US tech than European penalties. Meta’s decision to pay up to $17.1 billion to 47 states to settle a three-year-old lawsuit about child safety is more onerous than European fines. US courts have also imposed restrictions on Apple’s app stores and declared Google’s ad marketplace a monopoly.
How far the penalties will go remains uncertain. While the Meta settlement goes far beyond any European decisions to impose changes to a tech company’s business model, US judges have decided against any breakups for Google, and the changes to Apple’s app store remain mired in litigation.
Yet a surprising transatlantic consensus is emerging over the need to rein in tech. Both Americans and Europeans share the same concerns regarding children’s online safety and tech’s power, and US courts overall have emboldened European officials to ignore threats of trade retaliation.
Start with child safety. The US settlement requires Meta to implement extensive changes to Facebook and Instagram, including strict age-assurance methods, daily time limits, turning off social media features at night, and disabling notifications at schools.
These measures might become global standards. In the US settlement, Meta insisted on leveling the playing field so that children can’t just switch to the app of a competitor. Meta wants companies such as YouTube and TikTok to impose similar restrictions — and has built a financial incentive to encourage them. If only Meta takes measures, it will pay $12 billion. If other companies agree to join Meta, it will pay $17 billion.
Europe looks set to follow suit. When European Commission President Ursula von der Leyen gives her State of the Union address in mid-September, the Brussels tech community will focus on her promised proposals to keep children safe. After the announcement of the Facebook settlement, more than 50 European parliamentarians signed an urgent letter, arguing that “European children are worth no less than American ones.”
In addition to child protection, antitrust enforcement is moving forward on both sides of the Atlantic. In Europe, apple agreed to replace its existing system of rules and fees with a 5% commission on digital transactions in apps distributed outside its app store. In the US, a federal judge ordered Apple to remove all such fees. Apple has appealed, and the Supreme Court has agreed to hear the case.
Another front is online advertising. Although a US court declared that Google has illegally killed competition in online advertising, Judge Leonie Brinkema declined to follow the government’s recommendation to break up the company’s ad technology business. She instead accepted behavioral remedies.
The European Commission previously fined the company €2.95 billion for the same offense and was weighing a possible breakup order — until the US decision. It would be difficult to sever the global ad tech auction business just in Europe. Google has submitted proposals for behavioral remedies, and European competition chief Teresa Ribera described the proposal as a “serious” offer.
“It’s always advisable to be sufficiently consistent, both for the companies, these global companies, the users, and the regulators,” Ribera told Politico.
Antitrust law, whether American or European, struggles to keep up with fast-moving tech. In the US, a judge found that Google ran an illegal search monopoly — only to back off from forcing the company to divest or spin off major parts of its business, saying that new artificial intelligence chatbots were offering sufficient new competition. The US Federal Trade Commission’s attempt to force Meta to sell off WhatsApp and Instagram collapsed in court.
Significant differences remain between the European and American approaches. Under Europe’s restrictive GDPR privacy rules, Meta cannot track users or serve highly personalized ads unless users explicitly consent. Fines can reach up to 4% of global annual revenue. In contrast, personalized tracking remains standard in the US, unless consumers opt out. Europe’s new Digital Markets Act and Digital Services Act give its regulators the power to intervene before any court, and indeed, before any determination of illegal abuse of a monopoly.
Although Washington has failed to pass such European style laws, many of the government’s demands in court exceed those of its European counterparts. The EU has never attempted to break up a major US tech company. The US government has. No EU fine comes close to the $17 billion Meta has now agreed to pay to end US litigation. US critics say Europe overregulates and disproportionately targets US tech leaders. But who’s turning out to be the real tech sheriff?
William Echikson is a non-resident Senior Fellow at CEPA and editor of the Bandwidth Journal.
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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