Vague trade deal allows new US attacks on EU tech rules

BRUSSELS — The European Commission claimed its tech rules escaped unscathed after Sunday’s trade deal with the U.S. But Washington says they’re still on the table.

The EU’s regulation of U.S. Big Tech companies is a big bone of contention between the two sides, and a lack of specifics in Sunday’s handshake deal between European Commission President Ursula von der Leyen and U.S. President Donald Trump has allowed both sides to push their own narrative.

The EU claimed its tech rules were safeguarded, but the U.S. still thinks they need to be discussed.

The EU’s “attack on our tech companies, that’s going to be on the table,” U.S. Commerce Secretary Howard Lutnick told CNBC on Tuesday, asked whether Sunday’s deal warranted further trade talks with the EU.  

This underscores how the U.S. doesn’t seem intent on backing down from its months-long campaign against the EU’s rules on content moderation, digital competition and artificial intelligence — despite the bloc’s insistence that its regulations are not up for negotiation as part of the trade talks.   

Even worse, lawmakers fear that the EU’s executive has already given up some ground or that the U.S. will feel empowered by Sunday’s deal to continue its criticisms.

No concessions given

The Commission was quick to point out that tech regulation was one of the areas where it had not given an inch, by excluding rulebooks like the Digital Services Act (DSA) and Digital Markets Act (DMA) from the negotiating table.  

“There is absolutely no commitment on digital regulation, nor on digital taxes,” said a senior EU official on Monday. They added that the Commission’s defense of the EU’s autonomy to regulate hadn’t received enough attention.  

It seemed like a win for the EU. Meanwhile, the U.S. busied itself wringing concessions on digital trade barriers from other countries in trade talks, such as Indonesia.

In early July, the bloc’s tech chief Henna Virkkunen drew a red line, telling POLITICO that the DSA, the DMA and the bloc’s artificial intelligence rulebook were all “not part of the trade negotiations from our side.”  

It was a fierce rebuke from a high-level EU official after U.S. officials, lawmakers and tech executives had railed for months against rules that, they argued, amounted to censorship (the DSA), unfair targeting of U.S. companies (the DMA) or the stifling of innovation (AI Act).  

Will they, won’t they?

But Sunday’s deal contained some language that gave the U.S. ammunition for crossing that line in the future.

Von der Leyen admitted in her first remarks after the deal that both sides would further “address non-tariff barriers.” The U.S. later said both sides would “address unjustified digital trade barriers.”  

The U.S. began undermining the EU’s claim that it had secured a win and safeguarded its tech regulation in the days following the deal.

Jim Jordan, a powerful U.S. Congress Republican who has led the attacks against the DSA as chair of the Judiciary Committee, said after a Brussels visit on Monday that the DSA may be a “discussion item in the ongoing trade negotiations that the White House has with the European Union.”  

He promised “to touch base with the folks in the White House” on the matter.

Lutnick was quick to pick up his suggestion on Tuesday.  

The White House opened a second front by putting out a fact sheet late on Monday, in which it claimed the EU would not go ahead with so-called network fees — the policy suggestion that the largest online platforms, mostly American ones like Netflix and YouTube, should chip in for the cost of Europe’s telecom infrastructure. 

The Commission’s spokesperson for trade, Olof Gill, confirmed the claim to reporters on Tuesday in a frantic session where the bloc scrambled to defend its trade deal.

“That’s correct, but that doesn’t impinge on our rules or regulatory space,” he said, emphasizing that “we are not moving on our right to regulate autonomously in the digital space.” 

Look over your shoulder

Some fear that instead of settling the issue for good, Brussels will continue to have to look over its shoulder when deploying or enforcing its tech rules.

Virkkunen promised in June that several DSA probes would be wrapped up in the coming weeks and months, in particular one against Elon Musk’s X.

“Now that the deal is done, we should expect results,” said Nick Reiners, senior tech analyst at Eurasia Group. “That said, the Commission will be cautious as the deal is still only in principle.” 

The EU’s executive will also have to tread carefully on the topic of network fees as part of its new telecom law in December.

It has shelved the highly disputed network fees proposal, also known as fair share, for some time, opting instead to explore alternative regulatory options. But critics aren’t happy as they argue they will amount to network fees by a different name.

With the EU’s retreat on network fees now out in the open, the Commission may have to tread more carefully and be ready to debunk any accusations that it’s breaking the trade peace by sneaking them back in.

Others have an even more pessimistic outlook.

They claim that the EU has succumbed to Trump’s terms, which will empower the U.S. to go after the EU even harder.

“It sends the wrong signal: If we fold under pressure, what’s to stop Trump from coming after our legislation next?” S&D lawmaker Brando Benifei, one of the Parliament’s leads on the AI Act, said in a press release.

The Commission didn’t comment on Lutnick’s remarks before the publication of this article.