Donald Trump at the Turning Point conference. Source: Gage Skidmore, https://www.flickr.com/photos/gageskidmore/53067465959
Late last week, reports emerged that the European Union was set to impose a “modest” fine on search giant Google following a four-year antitrust investigation into its ad tech business, despite previous suggestions that the European Commission might push for a breakup of Google’s ad tech stack. Now, it appears that even this modest fine is being put on ice. A report last night from MLex suggested that the Commission had been due to announce a sanction against Google yesterday, but pulled back at the last minute, with no sign of when a decision might be announced.
The cause of this series of climbdowns appears to be pressure from the current US administration. President Donald Trump has been vocal about his distaste for overseas laws and regulations which he feels shackle US tech companies. And with the EU having reached a new trade deal with the US earlier in the summer, MLex reports that figures within the European Commission are pushing back against any legislative proposals or legal rulings which might provoke Trump’s ire. Maroš Šefčovič, the European commissioner for trade and economic security, is reported to have intervened and called for a suspension of the announcement.
A question of timing?
A decision to cancel the announcement of a ruling wouldn’t necessarily signal that the ruling was being scrapped or revised. Šefčovič’s concern may have been around the specific timing of the announcement. The trade deal between the EU and the US agreed back in July is still being implemented — it’s less than a week since the European Commission formally proposed removing duties on industrial goods imported from the US, a move which triggered the US’s own tariff reduction on European cars. Announcing a big fine against one of America’s biggest and most influential businesses could risk the US rethinking elements of the existing trade deal.
Regardless, it seems Trump’s railing against foreign laws and regulations is having an impact, which has implications for European digital law more broadly.
Just last week, Trump threatened to impose new tariffs, as well as export restrictions on semiconductors, against any country whose taxes and regulations affect US tech businesses. Writing on his social media platform Truth Social, Trump said that “digital taxes, legislation, rules or regulations are all designed to harm, or discriminate against, American technology”.
Teresa Ribera, the EU’s current competition commissioner, said in response that the EU must stand firm against any threats from the US. Ribera told the Financial Times that the trading bloc must be willing to walk away from trade deals with America if necessary, rather than succumb to all of Donald Trump’s demands. The EU has also previously spoken in quite combative tones, suggesting it might be willing to issue new taxes against tech companies specifically as a response to Trump’s tariff threats.
But these sorts of fighting words have died down now a deal has been struck, and today’s news suggests that Ribera’s views aren’t shared across the Commission. The EU’s major tech-focused pieces of regulation, the Digital Markets Act and the Digital Services Act, are both already in force, but fear of US retaliation could impact any fines or penalties issued under those laws. And upcoming legislative efforts, such as the Digital Fairness Act, could find themselves watered down if legislators feel they risk sparking a flare-up of trade tensions.
Silicon Valley’s Trump turn pays off
The irony of course is that the US’s own Department of Justice has also sued Google for anticompetitive practices. The Information last week reported that Google is making changes to its sell-side ad tech business which would make it better positioned to operate as a standalone business, indicating that Google is preparing for a forced divestment.
Prior to Donald Trump taking office for a second time, reining in big tech seemed to be the one cause which both US political parties agreed on. Republicans accused digital platforms of censoring conservative voices, while Democrats railed against the power and global influence of big tech companies.
But Silicon Valley’s unsubtle efforts to court Trump appear to be paying off. With several tech platforms softening their stances on content moderation — Republicans’ key gripe with social platforms — Trump has proven willing to protect their interests, a policy which fits with his wider push to promote US businesses. Meta CEO and founder Mark Zuckerberg, who Trump once threatened to throw in jail, is reported to have pressed Trump on digital taxes just before the president’s announcement last week.
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