Technology is Improving Our World
The price of using a top-tier AI model has collapsed in just two years, putting tools that once required an engineering team within reach of anyone with a laptop. Driverless taxis now carry paying passengers across Phoenix, San Francisco, and Austin, and they crash far less often than the humans they serve. The phone in your pocket can translate a conversation as it happens and send you a transcript, or even handle booking your next flight.
Unless, of course, you live in the European Union.
Despite the borderless revolution in digital services most Americans are enjoying, there is a regulatory drawbridge depriving European citizens of emerging technologies and cutting American companies off from an entire customer base.
That metaphorical drawbridge is codified in law by two sweeping EU regulations, the Digital Markets Act and the Digital Services Act. They did this to themselves.
Ostensibly, these rules were implemented to create an even playing field for competitive industries and to keep services affordable for European consumers. But after years of lopsided enforcement and coercive demands on product design, they have served more as an offensive weapon aimed at American innovators.
While American tech firms and their consumers pay substantially for compliance, it’s ordinary Europeans who pay the price as they remain locked out from innovative products and services they would otherwise enjoy.
It’s time the United States commits to action and launches a Section 301 trade investigation to hold them accountable for harmful regulations.
Deny or Delay
The list of recent products and services denied to Europeans because of regulatory concerns is growing fast. Meta’s Muse agent, the next-generation of Apple Intelligence, and OpenAI’s new Dot app are all features that have been forced to carve out consumers in the European Union.
Under the EU’s DMA, six of the seven designated gatekeepers are American tech firms or those with a U.S. parent company. U.S. products make up 21 of the 23 designated core platform services, meaning they are subjected to strict interoperability and compliance rules before launch.
These rules and procedures are far more than just notifications or design requests. They represent hundreds of millions of capital that could otherwise be used to deliver better products.
The Cost of Compliance
In a report released in 2024, social media company Meta revealed it has devoted more than 590,000 working hours to DMA compliance, while Google reportedly had 3,000 people working on a specific DMA provision. These costs are projected to be more than $200 million a year per DMA-designated gatekeeper, a whopping $1.4 billion that more than doubles a flagship EU investment in breakthrough technologies.
This does not include the nearly $1.8 billion in DMA fines the EU has attempted to collect from Apple, Meta, and Google in just the last two years since the gatekeeper obligations came into force. Now, the revenue collected from American tech companies is being considered as general revenues for European budgets to spend as they wish.
Benjamin Haddad, the French Minister Delegate for European Affairs, admitted as much recently when he suggested that the record fines imposed by the EU on Google, for example, would be a new “revenue stream” used to cover EU spending and reduce national contributions going forward.
For modern European politicians, American tech companies are much more than just targets of regulation or competition to their own domestic industries. They are prime vehicles for feeding their budgets and covering their own staggering deficits.
These massive fines and compliance costs are not just magically absorbed by companies. They divert funding from research and development budgets, stronger security, and are ultimately passed on to consumers in the form of higher prices.
The Cloud Wars
Brussels has also now concluded that both Amazon’s AWS and Microsoft’s Azure should fall under the DMA, putting much needed data centers processing AI compute under the regulatory thumb of the EU.
If the bloc’s Cloud and AI Development Act is adopted, it would further weaponize European lawmaking to push users off American data services in favor of domestic providers, a move that worries many European tech leaders who depend on competitive networks to launch their apps.
Rather than embrace open competition to benefit consumers, the EU’s legislative agenda is fully rooted in digital protectionism. These latest actions will harm not only the startup ecosystem across the continent, but also limit options and raise costs for established businesses that rely on more affordable cloud services.
Washington’s Turn
The waiting game in Washington must now come to an end and Brussels’ regulatory posture must be addressed.
The Trump Administration has already protested excessive fines and regulations that thwart American tech companies’ abilities to sell to European consumers. The Office of the US Trade Representative (USTR) must now take the next step by heeding President Trump’s call to launch a Section 301 trade investigation to call the DMA to task.
Applying rules and regulatory oversight to goods and services sold to European consumers is a given. No one disputes the importance of democratic input. But consistently placing roadblocks in the way of the deployment of new technology rather than guardrails does no favors for Europeans, and harms American consumers in the process.
On both sides of the Atlantic, consumers cannot be the ones to pay the cost.