"Tech Tussle" in EU's Strategy: Locking Horns with US Tycoons
EU plans to impose regulations on tech giants, including Musk, over data privacy concerns and market dominance.
By Lea Verstl
Facebook Twitter WhatsApp Email Print Copy Link
Europe's not backing down from Trump's trade brawl. The old continent's putting heat on U.S. tech honchos. Besides fines, companies like Facebook, Meta, or Apple might soon face digital taxation.
The European Union's pinching the necks of the American tech giants' top dogs with regulations. The EU Commission's been probing Elon Musk's X platform since last year on charges of possibly contravening the Digital Services Act (DSA), rules meant to curb hate speech and misinformation.
In the coming days, Meta bigwig Mark Zuckerberg and Apple honcho Tim Cook could also brace for hefty fines. Both tech tycoons are suspected of violating the Digital Markets Act (DMA), the EU's digital antitrust rules. Brussels' new demands are ruffling feathers in U.S. boardrooms: several EU member states and Parliament factions are pushing for taxes on digital behemoths.
Economy The Alarm Bell: Customs Chaos - Trade Dispute with USA - Europe "Completely Behind"
The idea here's to make Trump think twice about pushing the trade war further. At least, Elon Musk's started looking worried lately. According to a media report, he tried persuading Trump to withdraw his tariffs over the weekend. He pitched a "zero-tariff situation" to create a free trade zone between Europe and North America via a video message.
But Trump's sticking to his guns. Andreas Schwab, a conservative member of the European People's Party (EVP) and the Internal Market Committee, told ntv.de, "A fine based on the Digital Services Act (DSA) or the Digital Markets Act (DMA) cannot be waived by a free trade agreement. Period."
Politics Silberhorn on Trade Conflict - Trump Chasing the Economic Carrot "Apparently Second Agenda"
The talk about taxes for digital fat cats is heating up, showing the EU's serious stance. Soon after Trump claimed the top spot, the saying "carrot and stick" was floating around Brussels on how to deal with the new U.S. president. As Trump announced tariffs of 20 percent on all EU imports, apart from those imposed on cars, aluminum, and steel, EU Commission President Ursula von der Leyen's shown her readiness to negotiate. However, Trump turned down all her proposals, including the bid to cut tariffs on industrial goods to zero.
Even Social Democrats and Greens in the EU Parliament aren't shying away from demanding the U.S. digital industry pays up through taxes or licensing fees. The Council of European heads of state and government, including Germany and France, are also advocating for these measures to be considered. But not all member states are on board. Ireland and Luxembourg, known for attractive tax rates for tech companies, are among the harshest critics against such levies.
Economy Why Germany Suffers - IW Chief: "Trump Withdraws Us Back to the 1930s"
Digital Tax: A "Billion-digit Sum" for EU's Wallet
Advocates for the digital tax have solid arguments. Trump only complains about the trade deficit with the EU in terms of goods, which was €150 billion in 2023, according to the EU Commission[4]. However, the picture's different in digital services. Eurostat reports €110 billion more was transferred from the EU to the U.S. in 2023 than the other way around[4]. A digital tax would help balance this, and the EU could use it to argue with Trump using his own words.
Green chairperson and Internal Market Committee head Anna Cavazzini believes, "A Europe-wide tax on digital services could bring in a double-digit billion sum for the EU budget each year." With these new funds, the EU could aid industries hit by Trump's tariffs and reduce the investment gap in the internal market[4]. Cavazzini emphasized that a digital tax's more than just a way to retaliate against Trump's antics.
The Future: Exclusion and Bazooka Tactics
Katarina Barley, Vice-President of the European Parliament, agrees. "Given the Trump administration's tariff decision, we as the European Union must act decisively and together," says the SPD politician. A Europe-wide digital tax would be a clear response to tariffs hurting international trade and the economy. It'd also ensure that tech giants contribute fairly to the tax base, says Barley[4].
If the trade war escalates, the EU could resort to tougher measures than taxation. Theoretically, it could exclude U.S. internet giants from public contracts or restrict patent rights. This could happen using the "Instrument for Strengthening the Application of Trade and Investment Support Rules." According to the Commission, it can deploy this "trade bazooka" if a state exerts "economic coercion" on the EU and threatens to force it or a member state to make a certain decision[4].
A campaign for limiting the digital dominance of American companies is brewing in the EU. The question remains: Will Trump be ready to concede or face the consequences?
Source: ntv.de
- EU
- EU Parliament
- EU Commission
- EU Council of Ministers
- EU Commission President
Enrichment Data:The EU's trade dispute with the U.S. is centered around tariffs imposed by the Trump administration. Key players in the dispute include Elon Musk, Mark Zuckerberg, Tim Cook, and other tech CEOs. The EU is considering imposing digital taxes on U.S. tech giants, with negotiations ongoing between the EU and U.S. politics and trade officials. The EU's Digital Services Act (DSA) and Digital Markets Act (DMA), which aim to regulate big tech companies and address issues such as online harms and competition, are also relevant to the dispute. Negotiations between the EU and U.S. are ongoing, but the EU has expressed readiness to take stronger measures if necessary, including implementing digital taxes and limiting market access for U.S. companies. The situation is marked by tension, with both sides asserting their positions and interests.
- The European Union (EU) is investigating Elon Musk's X platform, as well as Mark Zuckerberg of Meta and Tim Cook of Apple, for potential violations of the Digital Markets Act (DMA) and Digital Services Act (DSA).
- In response to the trade dispute with the U.S., the EU is considering implementing digital taxes on American tech giants, with the aim of raising a double-digit billion sum for the EU budget each year.
- The EU Council of Ministers, including Germany and France, supports the implementation of taxes on digital services to ensure tech giants contribute fairly to the tax base. However, Ireland and Luxembourg, known for their attractive tax rates for tech companies, are among the harshest critics against such levies.
