How the EU Weaponizes Regulation to Extract Billions from American Tech

The European Union (EU) has increasingly utilized regulations to impose significant financial penalties on American tech companies, aiming to bolster its economy. Recently, European Commissioner Thierry Breton announced potential daily fines on X (formerly Twitter) for allegedly misleading users regarding its blue check verification system, claiming it violated the EU's Digital Services Act (DSA). This follows a trend where the EU has levied numerous fines, totaling billions of euros, on U.S. tech firms for non-compliance with various regulations, including the General Data Protection Regulation (GDPR) and the Digital Markets Act (DMA). The fines can reach up to 10% of a company's global revenue, severely impacting profit margins essential for research and development.

The DSA and DMA specifically target major American companies, with the DMA applying to six "gatekeepers" like Alphabet and Apple, while the DSA focuses on platforms with over 45 million monthly users. The EU's regulatory framework has led to substantial fines, with Meta, Amazon, and Google among the most affected. Compliance costs are also significant, with estimates suggesting U.S. digital service providers may incur up to $50 billion in new operational costs due to these regulations. Critics argue that these measures do not necessarily benefit European consumers or developers, as they may stifle innovation and drive American companies away from the European market, ultimately benefiting EU regulators financially.