On April 23, the European Commission pulled a move to fine Apple and Meta almost $800 million under the Digital Markets Act, requiring American tech giants to plan their global plans in Europe one more time.
The recent crackdown by the European Union on American tech giants might seem like a blow for Silicon Valley, but to others in the industry, it’s a wakeup call. The EU on Wednesday the fine Apple was charged equated to $535 million (€500 million) and Meta $228.3 million (€200 million) for violating the bloc’s new DMA, which each company was accused of violating. Both were also instructed to make essential changes to their European business operations.
While these penalties sting, tech leaders see an opening. “We’re starting to see the rubber hit the road,” said Katie Harbath, a former public policy director at Meta. Lobbyists wasted no time framing the fines as economic aggression. Meta’s Global Affairs Chief, Joel Kaplan said that “effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service.”
Trump’s National Security Council spokesperson Brian Hughes said to POLITICO “novel form of economic extortion” that “will not be tolerated by the United States.”
Large EU fines are of a negative impact for American tech, but they could be good for Apple and Meta in that they would cause the US government to resist and maintain their global leadership. By reframing the fines as inappropriate trade practices, these tech firms are translating regulatory pressure into political protection. That may revive nationalist trade stories in Washington, causing policymakers to defend US innovation as a matter of economic and strategic interest.
Tech Regulation Packaged as Trade War
The Digital Markets Act of 2024 (DMA) sought to lead to the grip of behemoth digital platforms. Now that Apple and Meta are facing huge penalties, big tech companies in the US are begging Washington to hold back.
The fine Apple and Meta mark an “escalation” as mentioned by Kay Hazemi-Jebelli of the Chamber of Progress; a lobbying group funded by Apple.
For Apple, the price is higher than the financials. Apple spokesperson said that the regulations are “bad for the privacy and security of our users” and said they “force us to give away our technology for free.”
On the other hand, lobbyists are counting on the timing and language to place the DMA on Trump’s trade agenda. “It’s a very clear attempt” to tie EU regulations to Trump’s ongoing trade disputes, Harbath said.
Word from the powers that be is that there isn’t a sign that the DMA will be a sticking point in future US EU trade negotiations, but negotiations are already taking place.
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