A White House memorandum warned foreign regulators of increased scrutiny for digital service taxes and financial penalties that appear to target US firms
A memorandum focused on preventing unfair exploitation of American innovation
On 21 February 2025, Donald Trump (President, US) issued a White House memorandum to prevent the unfair exploitation of American innovation by foreign governments and regulators. This aligns with the new administration’s approach so far of protecting large US tech firms, such as Apple, Amazon, Google and Meta. Speaking at the Paris AI Action Summit earlier that month, JD Vance (Vice President, US) was critical of foreign regulation of US-based tech companies, arguing it is stifling growth and innovation. Although Vance did not mention the EU specifically, Trump’s memorandum does, and pledges to scrutinise the Digital Markets Act (DMA) and the Digital Services Act (DSA) if they “dictate how American firms interact with consumers in the EU”.
Foreign digital service taxes have come under fire
The memorandum focuses in particular on the implementation of digital services taxes (DSTs), arguing that rather than positioning their own workers and firms for success, foreign jurisdictions have instead been taxing the success of US firms and workers. The memorandum explains that in terms of GDP, the US digital economy has been larger than the overall economies of most other countries in recent years such as Australia, Canada and most EU Member States. President Trump has claimed that foreign DSTs are attempting to exploit this success, potentially generating billions of dollars in revenue from US firms. The memorandum also criticises the potential financial penalties being faced by big tech in foreign jurisdictions. For example, the EC fined Apple €1.8bn (£1.5bn) in March 2024 and Meta €797.72m (£661.5m) in November 2024 for abusing their dominant positions in the distribution of music streaming apps and social networks and display advertising on social media, respectively.
House representatives have questioned the EC’s antitrust enforcement practices
Following the memorandum, on 23 February 2025, US House Judiciary Chair, Jim Jordan called on Teresa Ribera Rodríguez (EVP for Clean, Just and Competitive Transition, EC) to explain and clarify how the EU is enforcing its regulation of digital markets, as he argued that these were targeting US firms. Jordan wrote to Ribera, expressing concerns that the DMA unfairly gives European firms an advantage by placing less financial and regulatory burden on them than on US firms. The letter condemns the fines of up to 10% of global annual revenue for DMA violations, saying that these “compel businesses to follow European standards worldwide”. Jordan also suggests that regulation in the EU is benefitting China, stating that they stifle innovation, disincentivise R&D and hand “vast amounts of highly proprietary data to firms and adversarial nations”. In response, on 6 March 2025, Ribera and Henna Virkkunen (EVP for Tech Sovereignty, Security and Democracy, EC) replied to Jordan, clarifying that the DMA does not target US firms, it only applies to firms operating in the EU who have been designated as gatekeepers. Ribera and Virkkunen’s letter also pointed out that two of the DMA’s designated gatekeepers are not American, Booking.com (EU) and ByteDance (China). MEPs Stéphanie Yon-Courtin, Andreas Schwab, Anna Cavazzini and a number of others also wrote to Pamela Bondi (Attorney General, US Department of Justice) and Howard Lutnick (Secretary of Commerce, US Department of Commerce) to similarly explain that many of the accusations about the DMA coming from US representatives are incorrect.
The EC looks set to continue to enforce regulation, regardless of US complaints
Despite the US’ demands on EU regulators to relax their approach to enforcement in digital markets, EU lawmakers do not seem to be changing their tune. There has been speculation about whether the EC would delay its DMA decisions on Apple and Meta as a result of US criticism, but Ribera has remained firm, ensuring that these will come in March 2025, as planned. Further, the EC is also investigating X for a potential breach of EU rules against illegal content under the DSA and Ribera has been clear that the position of the platform owner, Elon Musk, in the US Government will not impact the EC’s final decision. In her EC confirmation hearing Ribera promised a vigorous application of the DMA, which big tech platforms are now beginning to see the ramifications of. Concerns over the EU regulatory burden are not limited to the new US administration though, and at MWC25 this was only further crystallised by digital leaders in Europe, particularly in the telecoms sector where investment and growth have slowed.
