EU’s crackdown on tech giants like Apple and Meta backfires – here’s how

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The European Union (EU) is gearing up to penalize tech giants Apple and Facebook’s owner Meta under the Digital Markets Act, opting for subtle sanctions to ease tensions with the United States. Here’s what you need to know:

• Apple is likely to face fines and be directed to amend its App Store regulations, which are under scrutiny for potentially limiting app developers from redirecting consumers to offers outside the platform.
• Meta, on the other hand, will also be fined and urged to alter its “pay or consent” model that presents users with the option to consent to data tracking or pay for an ad-free experience.
• Despite the DMA allowing fines of up to 10% of global turnover, the EU aims to impose fines that are significantly lower, considering the newly established digital regulations are subject to legal challenges.
• Brussels is prudently handling its enforcement of the DMA to address the dominance of tech giants without inciting conflict with the US, aligning with the commission’s focus on compliance rather than imposing hefty fines.

Navigating the Tightrope Between Enforcement and Relations

As the EU navigates a delicate balance between regulatory enforcement and diplomatic relations, repercussions on transatlantic cooperation and business relations sharpen the stakes:

• Levying fines on American tech companies risks a showdown with the US, as President Trump has condemned EU penalties on American firms as a “form of taxation” and “overseas extortion.”
• The EU’s cautious approach to sanctioning tech giants serves as a pivotal test for the European Commission, especially amidst rising transatlantic tensions and the looming threat of retaliatory measures.
• President Trump has issued warnings of potential tariffs on countries that impose digital services taxes on American corporations, further complicating the regulatory landscape for tech giants like Meta.

The Road Ahead: Striking a Balance

While the EU’s impending decisions regarding fines on Apple and Meta are still pending confirmation, the measured approach underscores the importance of balancing regulatory compliance with international relations. Stay tuned for updates as the EU seeks to rein in tech giants without derailing global cooperation.