Everything Is Just Dandy!

U.S. slow to respond to EU’s landmark tech regulation

Politico
Leah Nylen and Samuel Stolton
2022 03 25
https://www.politico.com/news/2022/03/25/us-eu-digital-markets-act-00020551

Washington and Brussels hailed a new agreement on trans-Atlantic data flows Friday, while conspicuously avoiding the elephant in the room: antitrust enforcement for the world’s largest digital platforms.

Top American officials were on hand in Brussels but for hours after European negotiators finalized a landmark new rulebook called the Digital Markets Act, which will clamp down on the power of digital platforms like Google, Amazon, Apple, Microsoft and Facebook parent Meta, the Biden administration remained silent on the matter. On Friday evening a White House official, who requested anonymity as a condition of giving a statement, said the U.S. shares the EU’s concerns and looks forward to continuing dialogue.

The White House response signals continued disagreement within the administration about how to approach antitrust reforms targeting the tech giants, an issue that has also split Democrats in Congress. While some Democrats in both chambers are pushing for bipartisan legislation that largely mirrors the EU’s new rules, others — particularly in California and Washington state where the companies are headquartered — oppose an antitrust crackdown.

The U.S. lawmakers working on that legislation said the EU’s new rules make clear the need for Congress to move forward on its own measures.

“Change is coming. Laws are coming,” House Judiciary antitrust subcommittee Chair David Cicilline (D-R.I.), a leading sponsor of the tech antitrust package, tweeted Friday. “Congratulations to my friends across the Atlantic on this hard fought victory to #ReinInBigTech.” The White House official called on the European Commission to "engage in meaningful regulatory dialogue with stakeholders" in order to avoid "unintended consequences".

Senior American and European leaders were eager to publicize the new data-sharing deal, which was negotiated in a distinct process from the DMA. The deal aims to allow personal data — everything from social media posts to payroll information — to keep flowing between two of the world’s largest trading blocs.

President Joe Biden and European Commission president Ursula von der Leyen jointly announced the deal Friday, claiming that it was a victory for both privacy advocates and national security agencies.

The EU and U.S. governments have spent almost two years trying to reach a deal, but concerns from some EU officials — particularly over how the bloc’s citizens could use U.S. courts to appeal how their data was used by American intelligence agents — had remained a sticking point.

But with the unfolding war in Ukraine, concerns about a stuttering global economy, and ongoing tensions with China, U.S. and EU leaders eventually stepped into the fray to signal that trans-Atlantic cooperation on data was central to a rekindled EU-U.S. relationship in the post-Trump era.

Whether that cooperation extends to reining in the largest tech platforms remains an open question. U.S. officials previously raised concerns that the EU’s proposed rules disproportionately affect American businesses. In the DMA’s final draft, EU negotiators settled on thresholds that will likely affect the top five U.S. firms but also sweep in Dutch online lodgings platform Booking.com and Chinese e-commerce giant Alibaba.

The exact number of firms subject to the new rules will be decided by the European Commission. France’s digital secretary said Friday that between 15 and 20 companies, including several in Europe, will likely be impacted.

The U.S. Department of Commerce issued a statement from Secretary Gina Raimondo praising the new trans-Atlantic data deal but deferred comments to the White House on the DMA.

Top U.S. business groups were vocal in their opposition to the DMA. The U.S. Chamber of Commerce, the nation’s largest business lobby which counts Amazon, Meta and Google as members, called the new EU rules “a policy of de facto discrimination against U.S.-headquartered companies.”

In an appearance midday Thursday with the Center for European Policy Analysis, White House tech adviser Tim Wu declined to comment on the DMA itself.

“Europe has been interested in promoting competition within its own economy. We are thinking about the same thing ourselves,” said Wu, special assistant to the president for technology and competition policy. “We’re all trying to figure out best how we deal with the really challenging questions of market dominance by large firms.”

Doug Palmer in Washington and Mark Scott in London contributed to this report.