Europe

The EU’s Digital Services Act (DSA) imposes the heaviest regulatory burdens on large platforms in a way that overwhelmingly targets U.S. technology companies, exposing them to disproportionate compliance costs and fines while largely sparing European firms. This discriminatory model functions as a non-tariff attack that risks weakening U.S. innovation and competitiveness, and is now being replicated globally, amplifying the strategic challenge for American tech leadership.

In a letter to the Financial Times, Daniel Castro argues that Europe’s push for “digital sovereignty,” exemplified by France replacing Zoom and Teams with a domestic platform, risks fragmenting the transatlantic digital ecosystem and weakening security and efficiency, and that true resilience comes from interoperable systems, shared rules, and cooperation among allied countries.

Matthew Kilcoyne in World Commerce Review argues that Europe’s pursuit of digital sovereignty risks fragmenting the digital economy and weakening innovation, and instead calls for coordinated, interoperable infrastructure, open data flows, and shared standards to preserve scale, efficiency, and economic growth.

The EU’s “payment sovereignty” push is a misdiagnosed, protectionist project that would benefit incumbent banks rather than consumers. Europe should instead pursue regulatory reform and use existing tools like interchange caps and PSD2 to promote competition and lower costs.

The EU–India trade deal is a wake-up call for Washington, highlighting how U.S. exporters are falling behind as other nations cut tariffs and reshape global trade.

According to the Center for European Policy Analysis, digital sovereignty would conservatively cost the EU €3.6 trillion ($4.2 trillion) over 10 years.

Mandatory adoption of EU-style digital rules amounts to regulatory imperialism for many countries in the Global South. It limits technology adoption, raises compliance costs, and undermines the ability of local firms to compete with Western ones.

Davos made clear that many “allies” would rather denounce the United States and chase access to Chinese markets than bear the burdens required to sustain the Western alliance and democratic system.

Europe has long free-ridden on U.S. drug innovation—and while President Trump is right to push allies to pay their fair share, importing Europe’s price controls into the U.S. would undercut the very innovation the world depends on.

The Internet may be forever, but regulatory frameworks should not be. Decisions made today about web crawling will help determine where the next generation of AI leadership emerges—whether in Europe, the United States, or elsewhere.