Europe Says Tech Regulation Isn’t on the Table in Tariff Talks. Analysts Disagree

‘It’s going to be a cat and mouse game. It depends on who blinks first,’ said Norman Lewis, a former director of technology research at Orange UK.

A person stands in front of a Meta sign outside of the company's headquarters in Menlo Park, Calif., March 7, 2023. Jeff Chiu/AP Photo

The European Union and the United Kingdom have ruled out Big Tech regulation—seen by the Trump administration as a threat to free speech and U.S. innovation—being played as a bargaining chip in potential trade and tariff negotiations.

Meanwhile, some analysts are convinced the continent’s internet controls and anti-competitive laws remain in play, as trading partners and nations scramble to strike deals during the 90-day tariff pause announced on Wednesday.

European Commission President Ursula von der Leyen told the Financial Times on April 10 that the EU would seek a deal, but specifically warned she was ready to hit back with a levy on digital advertising revenues if talks collapsed.

The day before, on April 9, the EU stated definitively that it would not make any concessions on its digital and technology rules as part of any trade negotiations. On the same day, the UK also said its hefty online safety laws were not up for negotiation.

These laws are increasingly viewed by the United States as economic protectionism in disguise.

While Washington can usually exploit and influence trade outcomes, the EU’s Digital Markets Act, Digital Services Act, and the UK’s Online Safety Act (OSA) leave little room for maneuver.

Matthew Lesh, public policy fellow at the free market think tank the Institute of Economic Affairs, told The Epoch Times by email that “British and EU lawmakers should not be surprised if they are expected to now compromise on some of these tech-related issues” under the pressure of U.S. tariffs.

Britain is keen to strike a new economic partnership with the United States focused on tech and artificial intelligence to soften the blow of sweeping tariffs announced by President Donald Trump last week.

The country, like many across the board, still has a 10 percent baseline tariff on it, and has a 25 percent tariff on UK steel and aluminium imports.

Standing in the way, however, could be the Online Safety Act.

Enacted in October 2023, the Act was celebrated by the UK government as the world’s first online safety law, and duties related to the regulation of what it defines as illegal content took effect on March 17 this year.

The law requires online platforms to implement measures to protect people in the UK from criminal activity, with far-reaching implications for the internet.

Child safety and online safety campaigners responded angrily this week to claims that the government may consider amending the OSA to facilitate a trade deal with the United States.

“Any ’regulatory review' or any commitment to potentially change the implementation of these frameworks should form no part of a trade deal with the United States,” the letter said.

The letter also mentioned the Digital Markets, Competition and Consumers Act, which gives UK regulators new powers to curb anti-competitive practices by Big Tech firms with “strategic market status,” aiming to “stamp out unfair practices and promote competition in digital markets.”

Prime Minister Keir Starmer appeared to confirm that the tech regulation was up for negotiation at a public hearing on April 8, when he was asked about ongoing trade talks.

“There are questions about the appropriate way to tax digital services. There are questions about how technology impacts with free speech,” Starmer said.

“I have been very clear, in my view, that we need to have an arrangement for digital tax of some sort. And equally, we need to be pioneers of free speech, which we have been for very many years in this country.

“But at the same time, we rightly protect under the Online Safety Act further provisions of which are coming into force pretty quickly, and when it comes to dealing with pedophiles and protecting children, I take a pretty strong line that we take the necessary measures in order to do so.”

The next day, Culture Secretary Lisa Nandy signaled a change in position when asked if she would consider changing the law.

“We’ve been really clear that we have to regulate the online space to make sure that it is a safe space, just as we would do in the real world,” she told Times Radio on April 9.

“That is not on the table as part of a trade negotiation.”

Online Safety Act

Online forums based in the United States that rely on First Amendment protections are already being affected by the UK legislation.

Many sites that allow user interaction, including forums, could face the threat of being blocked if they do not complete an illegal harm risk assessment.

Under the Act, social media platforms and other user-to-user service providers must proactively police harmful and illegal content such as revenge and extreme pornography, sex trafficking, harassment, coercive or controlling behavior, and cyberstalking.

The law has also impacted dozens of smaller UK websites, from cyclist forums to support groups for divorced fathers. Regulatory burdens have led many long-running sites to shut down entirely.

The British video-sharing platform BitChute is the most recent site to block UK users, posting the message:  “Despite our best efforts to navigate these challenges, the uncertainty surrounding the OSA’s enforcement by [the Office of Communications] and its far-reaching implications leaves us no viable alternative but to cease normal operations in the UK.”

Gab—a U.S.-based platform with no legal presence in the UK—was informed in a letter from the Office of Communications (Ofcom) regulator on March 16 that it falls within the scope of the law and must comply.

Ofcom warned that noncompliance could result in fines of up to £18 million (over $23 million), or 10 percent of a company’s global revenue, as well as potential court orders to block access in the UK.

“We will not comply. We will not pay one cent,” said CEO Andrew Torba.

In a previous statement to The Epoch Times, Gab said the law “operates outside their jurisdiction,” and their lawyers confirmed the company has no presence outside the United States.

Lesh, the Institute of Economic Affairs public policy fellow, told The Epoch Times that for decades, U.S. administrations have expressed concerns over EU and UK policies that they “perceive as targeting American tech companies through tailored taxes, stringent regulations, and costly competition enforcement.”

He said that implementing such rules and taxes, which are perceived as aimed at US firms, has become a “significant flash point in ongoing trade negotiations” with the Trump administration.

European Union Stance

Across the English Channel, the European Union stated it would not make concessions on its digital and tech rules as part of any trade deal.

The EU said on April 10 that it would pause its countermeasures against U.S. steel and aluminum tariffs for 90 days, but is still negotiating.

Commission President von der Leyen, in her Financial Times interview, said if talks failed, a tax on digital advertising revenues could hit tech groups such as Amazon, Google, and Facebook.

“We are developing retaliatory measures,” she said, adding these could include the first use of the bloc’s anti-coercion instrument with the power to hit services exports.

“There’s a wide range of countermeasures ... in case the negotiations are not satisfactory.”

The Digital Services Act (DSA) and the Digital Markets Act (DMA) form a single set of rules under the Digital Services Act package that apply across the European Union.

Though multiple U.S. officials have had it in their sights, the EU has repeatedly disagreed with the United States’ stance.

Most recently, Peter Navarro, senior trade adviser to Trump, accused the EU of waging “lawfare” against U.S. tech giants in a Financial Times op-ed on April 7, which called for changes to the “broken” trade system.

The DMA is focused on ensuring fair and open digital markets, while the DSA is geared toward more rigorous content moderation, user rights, and transparency, whether they are established within or outside the EU.

The Meta chief executive, Mark Zuckerberg, has accused the EU of “institutionalizing censorship.”

Meta, which owns Facebook and Instagram, recently said that DMA rules were “not just about fines—it’s about the commission seeking to handicap successful American businesses simply because they’re American, while letting Chinese and European rivals off the hook.”

Competition With US Tech Companies

Norman Lewis, a visiting research fellow at the think tank MCC Brussels and former director of technology research at Orange UK, said Europe’s protection of its digital rules, especially the DMA, is strategic.

“What the Americans, correctly, perceive here is an attack on big U.S. tech companies, and they will obviously use this as a bargaining chip,” Lewis told The Epoch Times.

“And obviously these companies have got the ear of Trump, and I think that they will hit back very hard if they see what the EU is doing is someway discriminating against American companies.”

He said that the EU thinks that they “can regulate themselves on to the market and give themselves a geopolitical role by regulating other people’s technology, when the real weakness is that they don’t have their own and, you know, they can’t compete.”

Lewis noted that the EU’s 2018 law around personal data inside and outside the EU, General Data Protection Regulation (GDPR), was turned into “a de facto global standard.”

“So even today in America, when you go to a website, you know, you have to consent to cookies ... and that’s because GDPR rules they’re just implemented by default, it’s become a kind of global standard. But there’s no law in America that says that that’s what they should do,” he said.

Lewis said that the EU thinks that they could do the same with the DSA, the DMA, because their control of access to the single market gives them enough leverage to force these companies to adopt their rules.

He said that, in terms of negotiations, he believes “no doubt there will be compromises made one way or another, because what is the EU going to do?”

“It’s going to result in suspending services from Apple, from Amazon, from Netflix? You’re talking about millions of people in Europe who are using these services. That’s not going to go down very well,” he said.

“So it’s going to be a cat and mouse game. It depends on who blinks first.”