Credit: Cristian Cristel/Xinhua The US tech regulations have been testing European Union’s (EU) patience for the Europe digital identity, while the region is trying to turn rules into real power through stronger infrastructure, investment, and a united digital market.
Europe’s effort to shape its digital future now goes beyond laws on paper. The debate is increasingly about whether the bloc can match its rules with technology especially as global competition sharpens.
European Tech Sovereignty Put to the Test
By end of 2025, tensions rose when US imposed visa restrictions on some European figures, including EU commissioner Thierry Breton. Washington described him as a driving force behind strict digital laws, while Breton called the move a “witch hunt.”
The episode has turned Europe digital identity into a political flashpoint. The move followed the EU’s first major enforcement under the Digital Services Act, including a $141 million (120 million euro) fine against X. The bloc has also fined Google and Apple and opened new cases against Meta.
These behaviors reflect a wider effort to defend European tech sovereignty by setting clear limits on Big Tech behavior. Additionally, actions against Google, Apple, and Meta show how far regulators are willing to go under current EU tech policy.
Accordingly, a growing strain is now placed on relations with Washington, and legal experts expect conflict is likely to continue.
“We are in a ‘tit-for-tat’ competition that will not stop during the Trump administration,” said Nicolas Petit, professor of Competition Law at the Department of Law of the European University Institute, pointing to long term risks for tech companies in Europe.
Europe AI Race and Tech Gap
If we put politics and Europe’s stance with US aside, we notice that its faces hard limits in infrastructure and capacity. US firms still dominate the market with cloud services, shaking the foundations of Europe digital identity.
According to data, European providers own a small share of their own cloud market, extending the progress toward European tech sovereignty. Such imbalance plays a role in limiting growth within EU digital single market.
Nonetheless, the lag behind in AI and intelligence and slow deployment keeps the continent away from competing with the US, meaning Europe is not winning the AI race.
In response to these claims, European Commission plans AI “gigafactories”, and building capacity for data centers has become a non-negotiable step. These efforts will strengthen tech hubs in Europe and keep innovation local.
Funding remains a concern. Limited access to capital continues to hold back innovation, despite rising attention to Europe tech funding. Academics warn that rules alone will not fix these gaps.
“Europe has a very limited position in most layers of the digital stack,” stated Angela Garcia Calvo, assistant professor at the Henley Business School, University of Reading, highlighting the risks to achieve Europe digital identity. In 2026, Europe’s challenge is finally clear. There is a need to align ambition with investment and supervision under a coherent European union tech policy, or else it will risk watching its digital vision sink behind.
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