The future of digital regulation between the EU and the US

Understanding the DMA and DSA regulations

The Digital Markets Act (DMA) and the Digital Services Act (DSA) are two major regulatory frameworks introduced by the EU to create a fairer and safer digital environment. While both fall under the broader Digital Services Act package, they serve distinct purposes.

The DMA focuses on ensuring fair competition by regulating large online platforms, known as gatekeepers, which have a dominant influence on digital markets. It prevents these companies from engaging in monopolistic practices, such as self-preferencing their own services, restricting interoperability, or using business data unfairly. The goal is to create a more competitive landscape where smaller businesses and consumers have more choices.

On the other hand, the DSA is designed to make online spaces safer by holding platforms accountable for illegal content, misinformation, and harmful activities. It imposes stricter content moderation rules, enhances transparency in digital advertising, and ensures better user rights protection. Larger platforms with significant user bases face even greater responsibilities under this act.

The key difference in regulation is that the DMA follows an ex-ante approach, meaning it imposes strict rules on gatekeepers before unfair practices occur. The DSA takes an ex-post approach, requiring platforms to monitor risks and take corrective action after problems arise. This means the DMA enforces competition while the DSA ensures online safety and accountability.

A key component of the DSA Act package is its emphasis on transparency and user rights. Platforms must explain how their algorithms curate content, prevent the use of sensitive data for targeted advertising, and prohibit manipulative design practices such as misleading cookie banners. The most powerful platforms, classified as Very Large Online Platforms (VLOPs) or Very Large Online Search Engines (VLOSEs), are also required to assess and report on ‘systemic risks’ linked to their services, including threats to public safety, democratic discourse, and mental well-being. However, these reports often lack meaningful detail, as illustrated by TikTok’s inadequate assessment of its role in election-related misinformation.

Enforcement is critical to the success of the DSA. While the European Commission directly oversees the largest platforms, national regulators, known as Digital Services Coordinators (DSCs), play a key role in monitoring compliance. However, enforcement challenges remain, particularly in countries like Germany, where understaffing raises concerns about effective regulation. Across the EU, over 60 enforcement actions have already been launched against major tech firms, yet Silicon Valley’s biggest players are actively working to undermine European rules.

Together, the DMA and the DSA reshape how Big Tech companies operate in the EU, fostering competition and ensuring a safer and more transparent digital ecosystem for users.

Trump and Silicon Valley’s fight against EU regulations

The close relationship between Donald Trump and the Silicon Valley tech elite has significantly influenced US policy towards European digital regulations. Since Trump’s return to office, Big Tech executives have actively lobbied against these regulations and have urged the new administration to defend tech firms from what he calls EU ‘censorship.’

Joel Kaplan, Meta’s chief lobbyist, has gone as far as to equate EU regulations with tariffs, a stance that aligns with the Trump administration’s broader trade war strategy. The administration sees these regulations as barriers to US technological dominance, arguing that the EU is trying to tax and control American innovation rather than foster its own competitive tech sector.

Figures like Elon Musk and Mark Zuckerberg have aligned themselves with Trump, leveraging their influence to oppose EU legislation such as the DSA. Meta’s controversial policy changes and Musk’s X platform’s lax approach to content moderation illustrate how major tech firms are resisting regulatory oversight while benefiting from Trump’s protectionist stance.

The White House and the House Judiciary Committee have raised concerns that these laws unfairly target American technology companies, restricting their ability to operate in the European market.

Brendan Carr, chairman of the FCC, has recently voiced strong concerns regarding the DSA, which he argues could clash with America’s free speech values. Speaking at the Mobile World Congress in Barcelona, Carr warned that its approach to content moderation might excessively limit freedom of expression. His remarks reflect a broader criticism from US officials, as Vice President JD Vance had also denounced European content moderation at a recent AI summit in Paris, labelling it as ‘authoritarian censorship.’

These officials argue that the DMA and the DSA create barriers that limit American companies’ innovations and undermine free trade. In response, the House Judiciary Committee has formally challenged the European Commission, stating that certain US products and services may no longer be available in Europe due to these regulations. Keep in mind that the Biden administration also directed its trade and commerce departments to investigate whether these EU laws restrict free speech and recommend countermeasures.

Recently, US President Donald Trump has escalated tensions with the EU threatening tariffs in retaliation for what he calls ‘overseas extortion.’ The memorandum signed by Trump on 21 February 2025, directs the administration to review EU and UK policies that might force US tech companies to develop or use products that ‘undermine free speech or foster censorship.’ The memo also aims at Digital Services Taxes (DSTs), claiming that foreign governments unfairly tax US firms ‘simply because they operate in foreign markets.’

EU’s response: Digital sovereignty at stake

However, the European Commission insists that these taxes are applied equally to all large digital companies, regardless of their country of origin, ensuring fair contributions from businesses profiting within the EU. It has also defended its regulations, arguing that they promote fair competition and protect consumer rights.

EU officials see these policies as fundamental to Europe’s digital sovereignty, ensuring that powerful tech firms operate transparently and fairly in the region. As they push back against what they see as US interference and tensions rise, the dispute over how to regulate Big Tech could shape the future of digital markets and transatlantic trade relations.

Eventually, this clash could lead to a new wave of trade conflicts between the USA and the EU, with potential economic and geopolitical consequences for the global tech industry. With figures like JD Vance and Jim Jordan also attacking the DSA and the DMA, and Trump himself framing EU regulations as economic warfare, Europe faces mounting pressure to weaken its tech laws. Additionally, the withdrawal of the EU Artificial Intelligence Liability Directive (AILD) following the Paris AI Summit and JD Vance’s refusal to sign a joint AI statement raised more concerns about Europe’s ability to resist external pushback. The risk that Trump will use economic and security threats, including NATO involvement, as leverage against EU enforcement underscores the urgency of a strong European response.

Another major battleground is the AI regulation. The EU’s AI Act is one of the world’s first comprehensive AI laws, setting strict guidelines for AI transparency, risk assessment, and data usage. Meanwhile, the USA has taken a more industry-led approach, with minimal government intervention.

This regulatory gap could create further tensions as European lawmakers demand compliance from American AI firms. The recent withdrawal of the EU Artificial Intelligence Liability Directive (AILD) under US pressure highlights how external lobbying can influence European policymaking.

However, if the EU successfully enforces its AI rules, it could set a global precedent, forcing US firms to comply with European standards if they want to operate in the region. This scenario mirrors what happened with the GDPR (General Data Protection Regulation), which led to global changes in privacy policies.

To counter the growing pressure, the EU remains steadfast – as we speak – in enforcing the DSA, the DMA, and the AI Act, ensuring that regulatory frameworks are not compromised under US influence. Beyond regulation, Europe must also bolster its digital industrial capabilities to keep pace. The EUR 200 billion AI investment is a step in the right direction, but Europe requires more resilient digital infrastructures, stronger back-end technologies, and better support for its tech companies.

Currently, the EU is doubling down on its push for digital sovereignty by investing in:

• Cloud computing infrastructure to reduce reliance on US providers (e.g., AWS, Microsoft Azure)
• AI development and semiconductor manufacturing (through the European Chips Act)
• Alternative social media platforms and search engines to challenge US dominance

These efforts aim to lessen European dependence on US Big Tech and create a more self-sufficient digital ecosystem.

The future of digital regulations

Despite the escalating tensions, both the EU and the USA recognise the importance of transatlantic tech cooperation. While their regulatory approaches differ significantly, there are areas where collaboration could still prevail. Cybersecurity remains a crucial issue, as both sides face growing threats from several countries. Strengthening cybersecurity partnerships could provide a shared framework for protecting critical infrastructure and digital ecosystems. Another potential area for collaboration is the development of joint AI safety standards, ensuring that emerging technologies are regulated responsibly without stifling innovation. Additionally, data-sharing agreements remain essential to maintaining smooth digital trade and cross-border business operations.

Past agreements, such as the EU-US Data Privacy Framework, have demonstrated that cooperation is possible. However, whether similar compromises can be reached regarding the DMA, the DSA, and the AI Act remains uncertain. Fundamental differences in regulatory philosophy continue to create obstacles, with the EU prioritising consumer protection and market fairness while the USA maintains a more business-friendly, innovation-driven stance.

Looking ahead, the future of digital regulations between the EU and the USA is likely to remain contentious. The European Union appears determined to enforce stricter rules on Big Tech, while the United States—particularly under the Trump administration—is expected to push back against what it perceives as excessive European regulatory influence. Unless meaningful compromises are reached, the global internet may further fragment into distinct regulatory zones. The European model would emphasise strict digital oversight, strong privacy protections, and policies designed to ensure fair competition. The USA, in contrast, would continue to prioritise a more business-led approach, favouring self-regulation and innovation-driven policies.

As the digital landscape evolves, the coming months and years will be crucial in determining whether the EU and the USA can find common ground on tech regulation or whether their differences will lead to deeper division. The stakes are high, affecting not only businesses but also consumers, policymakers, and the broader future of the global internet. The path forward remains uncertain, but the decisions made today will shape the structure of the digital world for generations to come.

Ultimately, the outcome of this ongoing transatlantic dispute could have wide-reaching implications, not only for the future of digital regulation but also for global trade relations. While the US government and the Silicon Valley tech elite are likely to continue their pushback, the EU appears steadfast in its determination to ensure that its digital regulations are enforced to maintain a fair and safe digital ecosystem for all users. As this global battle unfolds, the world will be watching as the EU and USA navigate the evolving landscape of digital governance.