Digital rulebook doesn't seem to be landing on the US - EU trade negotiation table anytime soon - but it should

With the US-EU trade tensions escalating, reviewing the EU's digital rulebook remains de facto absent from the EU’s proposed negotiation agenda. At least publicly.

Despite public statements about being “open to dialogue” on measures impacting American tech companies, European Commission representatives have largely defended the status quo and emphasized that the European digital rulebook is non-discriminatory and applies equally to all companies, regardless of origin.

It’s no coincidence that U.S. administration representatives like Vice President JD Vance or DOGE's US patriot Elon Musk have been so outspoken about the European digital environment, even if the messaging was simplified (often incorrectly) and hyperbolized.

EU Member States are undergoing one of the fastest digital transformations globally, accompanied by rapid growth in e-commerce. This is driving increasing demand for high-quality digital services, which only American tech companies can match for now.

The existing EU digital rulebook, ongoing investigations into U.S. firms, antitrust measures, the new European Commission digital agenda for 2024–2029, and potentially renewed discussions around digital services taxes pose a serious threat to the American tech business model.

Numbers matter: a $105 billion digital services trade surplus for the US, and $142 billion worth of European digital services sold in the U.S

The EU market remains the most important market for American tech companies.  The AmCham EU reports that the US exported a total of $320 billion in digitally deliverable services to Europe in 2023 (including non-EU Member States such as the UK, Switzerland, and more), which is 

“2.2 times more than what it exported to the entire Asia-Pacific region ($145 billion), and more than combined U.S. exports of digitally-deliverable services to the Asia-Pacific, Latin America and other Western Hemisphere, Africa and the Middle East”. 

AmCham EU also states that the US trade surplus in digital services with the EU was just over $100 billion in 2023, accounting for 43% of total digital services in the EU. Moreover, Europe (including the UK & EEA) accounted for 70% of the $518 billion in digital services supplied by American tech multinationals via their foreign affiliates - which are often European companies that pay taxes and employ people in their home countries.

How much have the American companies paid in fines until now

US President Donald Trump has been vocal about American companies being "mistreated" in the EU, and while I find his comments about the EU being a threat to the US incorrect and unfair, American tech companies have certainly had their fair share of trouble in the EU over the past 5+ years.

META has paid €2.5 billion in GDPR-related fines and is currently under investigation under the Digital Markets Act for its “pay or consent” model—a case where fines could theoretically reach 10% of its global revenue (€13.4 billion).

ALPHABET/GOOGLE has already paid €8.2 billion in antitrust penalties and faces two preliminary charges under the DMA, with potential fines also reaching 10% of its global turnover ($30.7 billion).

APPLE has paid €15 billion in antitrust and tax-related penalties, and similarly could face a 10% fine based on its global revenue ($38 billion).

AMAZON has paid a €746 million GDPR fine in Luxembourg and is currently under investigation for its marketplace ranking practices. With a global revenue of $500 billion, the theoretical 10% penalty would be substantial.

The troubles don’t end here: the future of the EU’s digital rulebook (and tax book)

The European digital rulebook is nowhere near being finished—the European Commission’s agenda for 2024-2029 includes both enforcement of already adopted regulations (such as DSA and DMA) and several new initiatives that may further tighten the grip on American tech companies. Several examples:

The Digital Networks Act (ambitiously scheduled for Q4 2025) could introduce network fees on U.S. content service platforms and extend telecommunications rules to the digital services sector—likely leading to skyrocketing compliance costs.

The Digital Fairness Act (an update to the EU’s consumer agenda for the digital age expected in 2026) is expected to target personalized advertising and algorithmic management practices.

Questionable remarks from certain US patriots have also fueled talk of “Eurostack” on steroids—a digital sovereignity plan for Europe to reduce its dependency on non-European tech. Eurostack includes ambitions for European cloud infrastructure, semiconductors, open-source software, AI and data platforms, 5G connectivity, and more. It’s estimated to cost the EU roughly €300 billion over the next decade.

Digital service taxes are another important topic. Until recently, American tech companies haven’t been subject to such taxes, which allowed for greater scaling. A EU-wide digital service tax has been proposed in the past but faced opposition from Nordic countries, Ireland, and Luxembourg. So far, France, Italy, Spain, Belgium, Austria, and Hungary have individually introduced some form of digital services tax—ranging from 3% to 7.5% on revenues, gross revenues, or advertising. Recently, Poland also announced plans to introduce a 1.5% digital services tax. The European Commission is likely to push again for an EU-wide digital service tax, this time with a focus on profit-based taxation.

Lastly, one of the three main reports shaping the European Commission’s 2024–2029 agenda—Enrico Letta’s report—explicitly recommends allocating the upper band of the 6GHz spectrum to international mobile technologies until 2030.

EU’s response so far: no changes in digital policy—for now

The back-and-forth communication between the EU and the US in recent months—often casting the EU in a negative light—has only amplified protectionist narratives within Europe, and there’s little indication that the EU intends to slow down its digital agenda anytime soon.

While the European Commission is planning “simplification” measures in digital policy, these are likely to focus primarily on easing reporting requirements for European SMEs, rather than making substantial changes to the broader regulatory framework.

At an American Enterprise Institute event in February, EU Trade Commissioner Maroš Šefčovič stated that the EU is open to dialogue “about the big tech.” However, he reiterated that the European digital rulebook is not specifically targeted at U.S. tech giants and is not of a discriminatory nature. As a result, the most far-reaching digital regulations, such as the Digital Services Act (DSA) and the Digital Markets Act (DMA), are not (yet) up for review.

Maroš Šefčovič: Yeah. We are ready to, of course, have a dialogue on this and to talk about the big tech. Just again, to put it a little bit into the perspective. And I was looking about, I would say, the big tech companies from US, most of them have more clients in Europe than in US. And if you look at the revenue, so it’s between 30 to 50 percent of the revenue is generated in the European Union. And these rules, which you just highlighted, they really do not have a discriminatory nature. They are not aimed at the US big tech. Because if you are talking about, you know, these rules, first one is clearly aimed to make sure that we would protect the small guys from the big guys. That we will not allow them, I would say, super dominance on the market, which will suppress the innovation, and which would make the small companies simply not competitive.

Maroš Šefčovič also didn’t have any positive news regarding the digital service tax, which is gaining momentum in separate EU Member States:

“And the last point I would mention, because this was about the digital service tax. That I think it’s also very important to remind that we’ve been working very closely with the United States on the OECD-driven business, because we wanted to have a global solution to this problem, more or less to respect the rule that taxes should be paid on the territory where the revenue and profit is generated”

Stop wasting time: Americans and Europeans need a common-sense transatlantic tech discussion

The economies and societies of Europe and America have reaped huge rewards from the transatlantic tech services market. American firms have raked in fat profits from a wealthy, 445-million-strong EU market, with the EU’s public administrations going digital and e-commerce developing at breakneck speed. Meanwhile, European companies and citizens have benefitted from American tech innovation—both directly and indirectly.

E-commerce platforms have revolutionized the modus operandi of European SMEs, allowing them to reach their potential customers in a targeted and cost-effective way. Historically speaking, it has never been easier for small businesses to sell their goods—requiring only a general knowledge of digital marketing and a couple hundred euros (or less) in their pocket.

Nobody has ever precisely measured the monetary impact in terms of time, resources saved, or the security and efficiency brought to European public administrations through American tech innovations—but we have a general understanding, one that becomes even clearer in times of crisis. Ukraine, for example, was able to maintain government operations after Russia’s attack and successfully transition from on-premise infrastructure to the cloud, largely thanks to American cloud providers.

American social media and AI platforms—though imperfect and often targeted by bad actors—have given Europeans cheap and easy access to global news and democratized communication across countries, cultures, and individuals. The latest knowledge is now just a few clicks away, and language barriers are becoming increasingly irrelevant.

There are no saints on either side of the Atlantic. While trade wars may prompt politicians to passionately defend their homegrown companies, similar issues exist in both the US and the EU. Both continents are seeking ways to regulate digital markets, both engage in anti-growth or protectionist measures, both make regulatory and legislative mistakes (and rarely admit them), and both believe they are acting in the best interest of their citizens.

European plans to develop their own tech economy should not be discouraged or viewed very negatively. The EU should absolutely support and empower European tech innovators, finding niche areas to invest and scale in, but this must include a willingness to confront uncomfortable truths, such as issues around competition and data policy in Europe. Historically, the EU has invested heavily in ‘controlled innovation’ efforts that delivered little to no globally competitive results, and that lesson shouldn't be ignored moving forward. The EU's simplification efforts should be extended to reviewing the digital rulebook altogether; no need to reinvent the wheel - impact assessment mechanisms already exist, they only need to be tweaked a little. This would greatly benefit European companies too. Remember the EU's Digital Decade's plan for data economy, digital economy, and 1000 unicorns by 2030?

As digitalization accelerates across all areas of life, both European and American markets will grow, creating new opportunities for European tech innovators—alongside rising demand for state-of-the-art digital services in the Global South as their economies and infrastructures continue to develop.

There is great potential for both American and European businesses but under one condition: a serious sit-down between experts, businesses, and policymakers must take place—with the goal of aligning on regulatory frameworks, technology standards, and more. Both sides will need to compromise, and both sides have a lot to learn from each other.

Our adversaries are not sleeping—they are rapidly capturing global markets while the U.S. and the EU continue bickering, whether openly or behind the scenes.