The U.S. must develop a policy to counteract EU digital regulations
The regulatory climate in the European Union is changing fast, and it’s not exactly friendly to American innovation. Europe has rolled out policies like the Digital Markets Act (DMA) and the Digital Services Act (DSA), and while they’re positioned as efforts to level the playing field, they clearly focus on U.S. tech companies, Microsoft, Amazon, Apple, Meta, Google. These are the companies building global-scale platforms. And this isn’t about stopping bad behavior; it’s about controlling market dynamics.
The EU isn’t shy about it either. What they’re doing is exporting these regulations globally through what’s known as the “Brussels Effect.” Basically, if your product or service enters the EU, you’re bound by EU rules, and that influence is bleeding into other markets. Expect similar models to show up in Asia, South America, even smaller economies. Some of them already are.
The danger here isn’t that the U.S. tech ecosystem can’t adapt, it absolutely can. The real issue is the absence of a unified U.S. policy that understands this shift, confronts it, and responds effectively. If we don’t take this seriously, these foreign frameworks will start shaping our market landscape from the outside in. Strategy matters, and relying solely on individual corporate lobbying or litigation won’t cut it.
Martijn Rasser, Senior Director for Economy at the Special Competitive Studies Project, said it plainly: reversing this trajectory will be incredibly hard for current and future U.S. administrations. But it’s something we have to take seriously. Sitting on the sidelines isn’t an option.
U.S. tech companies are disproportionately penalized under EU regulations
Since the General Data Protection Regulation (GDPR) went live in 2018, U.S. tech firms have been targeted hard. Data shows that U.S. companies are being hit with over 80% of total GDPR fines, that’s close to $12 billion in less than six years. What does that tell us? These rules aren’t just about data governance, they’re about where the power lies in digital infrastructure. Europe isn’t just regulating behavior; they’re establishing a framework that reshapes global power in technology.
This doesn’t stop at GDPR. With the new Digital Markets Act and Digital Services Act in play, the regulatory walls are getting higher. Compliance becomes more complex. Legal departments have to move faster. And the risk of steep fines keeps rising. Panel insights make it clear: companies are forced to build market-specific playbooks just to operate in the EU, and that’s a high-cost, high-risk model, especially when margins are linked to scale, not fragmentation.
Hilal Aka, a policy analyst at the Information Technology and Innovation Foundation, spelled it out. U.S. firms are being penalized most heavily under GDPR, and the trajectory doesn’t look like it’s slowing. Worse, other countries are copying the EU model. Turkey is working on rules similar to the DMA. Despite being a fairly small market, potential fines could go up to 10% of a company’s global revenue. Think about that number. That kind of exposure in a relatively small economy doesn’t make financial sense, and companies will start rethinking the value of these markets.
C-suite leaders need to get ahead of this. It’s not just about regulatory compliance anymore, it’s about shaping the environments they choose to operate in. Waiting for these policies to settle will come at an operational and strategic cost. This is a moment to lead with clear, deliberate action, not just reaction.
Inconsistent regulatory actions in the U.S. undermine the ability to challenge EU tech regulations
Let’s be clear, if the U.S. wants to oppose regulations coming out of Brussels, it needs to clean up its own policy structure first. Right now, there are mixed signals. On one hand, they’re calling out the EU for being heavy-handed. On the other, the U.S. Department of Justice is winning antitrust cases against Google for monopolistic practices.
You can’t complain about someone else’s regulations if your domestic playbook mirrors theirs. That’s where the real challenge sits. The US needs to take a hard look at our national policies and decide whether the goal is to promote fair competition or to lead with innovation.
This conflicting approach doesn’t just look bad, it carries consequences. When U.S. policymakers push back against regulations like the Digital Markets Act while their own agencies are simultaneously sanctioning big tech, the credibility falls apart. It’s a missed opportunity for leadership and leaves our companies without a clear shield when dealing with international regulators.
Hilal Aka, Policy Analyst at ITIF, made this point clearly: if the U.S. wants to tell the EU not to implement something like the DMA, it has to first ensure that its own antitrust approach isn’t sending the same message. Without consistency at home, the U.S. can’t expect leverage abroad.
For executives, this is more than a regulatory detail, it’s a strategy call. If international policy affects your market access and operational costs, then ensuring that there’s coherent policy backing you at home becomes critical. This isn’t a legal conversation. It’s a business continuity conversation.
Prolonged EU regulatory pressures may force U.S. tech companies to reconsider European markets
The scale of EU regulation isn’t just inconvenient, it’s starting to reshape strategic priorities. If legal overhead and financial liability keep rising, the economics of staying in certain markets starts to shift. The EU is being very clear: if you do business here, you’ll comply, no matter the complexity, cost, or scope of the regulation.
Some American tech companies are now weighing whether it’s worth being present in regions where the legal environment is unpredictable and regulatory costs are outpacing user or revenue growth. When it comes down to maintaining vulnerability in a market that accounts for a fraction of worldwide returns, the decision can be straightforward.
Nazak Nikakhtar, Partner at Wiley Rein LLP, didn’t mince words. During the panel, she said U.S. companies are on the verge of walking away from these markets due to elevated legal risks. That’s a real signal. Strategic exits aren’t always public at first, but for C-suite leaders, the considerations are happening now in boardrooms.
No company wants headlines that it’s pulling out of a major international market. But if the alternative is systemic exposure to fines, lawsuits, or unclear regulation, the risk-benefit balance shifts. Leadership has to think ahead of the curve, because reacting late to this kind of pressure can invite reputational damage and operational disruption.
The question is whether exposure to high-risk regulatory environments aligns with your company’s long-term global roadmap. If not, streamlining focus, investing in more predictable regions, and rerouting innovation pipelines could lead to better resilience and growth. These are tough but necessary decisions for any tech executive thinking five steps ahead.
Political shifts within the EU may provide the U.S. with negotiation leverage
While EU institutions have taken a stringent approach toward regulating U.S. tech companies through laws like the Digital Markets Act (DMA) and the Digital Services Act (DSA), there’s growing internal resistance. Not all European businesses are aligned with these regulations. Some are starting to question whether this level of control is actually supporting innovation or just increasing complexity and limiting competitiveness within the EU.
This undercurrent of dissatisfaction is important. When domestic pressure builds within EU member states, so does the potential for change. And as national elections approach in several countries, political leaders may shift positions. That’s the opening. If enough European stakeholders push back on these regulatory models, the environment becomes more flexible, more open to discussion and bilateral negotiation.
Martijn Rasser, Senior Director for Economy at the Special Competitive Studies Project, noted this change in sentiment. He pointed out that business dissatisfaction could trigger policy resets or, at the very least, bring regulatory moderation onto the agenda for upcoming political cycles. That’s a signal for the U.S. to act, not watch. Waiting won’t produce leverage. Positioning early will.
For U.S. tech leaders, this moment is an opportunity. If conditions are shifting, then diplomacy must match that pace. Executive teams should think about engaging constructively, both through government channels and directly with European industry groups dealing with the same operational friction. Strategic engagement, not confrontation, can tilt the balance, especially when European public opinion starts turning against overregulation.
This also means aligning internal narratives. For top tech firms, showing a serious, consistent commitment to responsible, secure, and fair platform governance helps build credibility. That kind of position gives the U.S. and its companies more room to shape future regulatory discussions, instead of just absorbing their impact.
The key here is timing. Political windows open and close quickly. Proactive engagement during a moment of shift is where impact is made. The long game isn’t about just surviving the DMA, it’s about influencing what comes after it.
Key executive takeaways
- U.S. needs a strategic policy response: EU tech regulations like the DMA and DSA are shaping global standards, targeting dominant U.S. platforms. Leaders should push for a cohesive national policy to defend innovation and mitigate global regulatory risks.
- American firms face disproportionate EU penalties: U.S. companies account for over 80% of GDPR fines, now totalling nearly $12B, with broader rules to follow. Executives should reassess European exposure and strengthen legal and compliance operations to manage escalating liabilities.
- Domestic inconsistency weakens global leverage: U.S. antitrust actions mirror EU regulatory aims, undermining arguments against international overreach. Leaders should advocate for regulatory alignment at home to reinforce credibility in geopolitical negotiations.
- Some firms may exit european markets: Legal risks from regulations like the DMA are pushing U.S. companies toward reevaluating EU market presence. C-suites must quantify ROI in these regions and prepare contingency plans for potential withdrawal or market downscaling.
- EU political shifts offer leverage opportunities: Rising internal EU dissatisfaction with tech regulation may open a window for negotiation. Decision-makers should encourage proactive government engagement to capitalize on emerging flexibility and reduce future enforcement burdens.
