It was a tough choice: risk fueling transatlantic tensions or stand up to Donald Trump’s threats. In the end, European Union regulators stood up.
They announced preliminary findings that Google and Apple violated the bloc’s Digital Markets Act, giving their products an unfair advantage over others. The Trump administration has derided the DMA as a “tax” or “tariff” on US companies and threatened retaliation. On April 2, Trump plans to impose “reciprocal” tariffs by increasing US duties to match the tax rates that other countries charge.
Europeans are scrambling to respond. European Commission President Ursula von der Leyen has postponed retaliatory tariffs until mid-April, hoping to broker a truce. At the same time, she gave the green light to proceed against the US tech giants – and looks tempted to redouble European efforts to loosen reliance on US tech and pursue European “digital sovereignty.”
For both Washington and Brussels, it’s a risky confrontation. Europe will struggle to substitute homegrown tech for Silicon Valley offerings. US companies risk seeing their access limited to the large and lucrative European market. They also are using the new European rules to fight each other. And despite his threats against Europe, Trump may share many of Europe’s antitrust concerns about tech.
Both sides remain far from declaring an all-out tech war. The new European findings represent preliminary judgments against Apple and Alphabet. They do not include fines, though these could be imposed later. They offer both American companies an opportunity to “respond” and attempt to resolve the issues raised by regulators.
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.
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Both companies derided the decisions. 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. Under the DMA, search When Europeans search for flights, searches no longer lead directly to airline sites, but to price comparison sites that receive commissions and leave most consumers forced to buy a more expensive ticket.
Apple was even more outspoken, charging 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, and that appears to be completely unrelated to the actual use of Meta external devices, such as Meta smart glasses.”
The Silicon Valley sparring underlines how US companies are attempting to leverage the new European DMA rules. Meta, Google, and Qualcomm have teamed up to create the Coalition for Open Digital Ecosystem, which targets Apple’s “closed” ecosystem. The main complaint is that their products work worse on Apple’s platform than Apple’s own devices. When Pebble creator Eric Migicovsky unveiled its new smartwatches this month, he wrote a lengthy blog post explaining all of Apple’s restrictions that make third-party smartwatches worse than the Apple Watch.
Despite the DMA decisions, Pebble, Meta and others Apple critics are far from realizing seamless interoperability. For now, the European preliminary decisions only require Apple to offer increased transparency, not to accept all interoperability requests. Apple can continue to cite security and privacy as reasons to deny data requests.
The large unanswered question is if these antitrust issues will create additional strain on the already tense transatlantic relationship, already 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. 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 now is 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 realize that pursuing America First may produce America Alone. Instead of just taking Trump’s punches, Europeans gather together and reboot their economies. They could reduce burdensome digital regulation and realize that digital sovereignty could produce digital poverty. Europe and the US need and depend on each other to stay ahead in the global tech race.
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. Before he joined CEPA, he worked at Google for six and a half years, running corporate communications for Europe, the Middle East, and Africa. He began his career as a foreign correspondent in Europe for a series of US publications, including the Christian Science Monitor, the New Yorker, Wall Street Journal, Fortune, and BusinessWeek.
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.
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