International economics and business are framed in profound ways these days by Donald Trump’s trade wars. And so when the EU announced on Wednesday that it had fined Apple and Meta a total of €700 million for breaching antitrust rules, the speculation was that it had avoided bigger penalties in a bid not to antagonise the White House further. The EU is, after all, currently trying to get the Trump administration to engage in talks on a new trade deal which would involve reducing, or eliminating, the recently imposed tariffs and avoiding the threat of increasing them further.
Not surprisingly, the companies sent up a flare seeking support from the White House. Apple, which said it would appeal the decision, claimed it had been “unfairly targeted,” while Meta went further, saying the EU would “handicap successful American businesses while allowing Chinese and European companies to operate under different standards”. This is simply nonsense.
The fines were imposed in relation to findings of anti-competitive practices under the Digital Markets Act, which allows for penalties of up to 10 per cent of turnover. The big tech giants are defined under this legislation as “gatekeepers” and are obliged to give access to competitors to their platforms. The relatively small fines were thus at the lower end of expectations. Trump has already threatened to hike tariffs on EU exports due to its regulatory practices in the tech sector, though the US itself continues to pursue the big players for alleged anti-competitive practices there.
While Trump has pulled back on some of his rhetoric in recent days, the risk of the digital services companies like Meta, Google and X being caught up in transatlantic tensions is all too real. In response to Trump’s initial move on so-called reciprocal tariffs, European Commission president Ursula von der Leyen said the EU could consider taxing the digital advertising revenues of these companies. The EU also has powers to go further than this if a trade war escalates.
Meanwhile, in the US, the other key part of the EU legislation – the Digital Services Act – which governs content and controls put on it, is even more controversial to Trump and his supporters.
The EU should try to do a deal with Trump on tariffs. And it should try to keep digital services out of the fight. But this may simply not be possible. The EU cannot soft pedal its regulation of the sector either in terms of its competitive practices or its content controls. Indications that the Apple and Meta fines were delayed for political reasons do not send out a good signal.
The EU’s regulation must be balanced and there may be a case to simplify them and cut needless red tape. But the big technology companies, who are earning major profits in Europe, need to play by the rules. European tech cannot be regulated by a Maga agenda.
