The European Union’s determination to challenge the power of Silicon Valley is about to face a significant test as Donald Trump has threatened retaliation against fines targeting major American corporations. Last week, the U.S. President warned of imposing heavy tariffs in response to any “disproportionate” penalties, specifically citing the EU’s Digital Markets Act as a potential target for his actions.
This tough stance puts new EU competition chief Teresa Ribera in a difficult position, as she has committed to concluding investigations into Apple Inc. and Meta Platforms Inc. by the end of March. These investigations could lead to substantial fines if her concerns are not addressed. If Ribera remains resolute, the EU could incur Trump’s ire. Conversely, if she capitulates, she risks undermining crucial legislation designed to regulate Big Tech. “Imposing fines will only provoke a stronger backlash from Trump,” warned Kay Jebelli, senior director at the Chamber of Progress, a trade group for companies like Amazon, Meta, Apple, and Google’s parent company, Alphabet. “Any financial penalty would likely be viewed as unjustified by the U.S. administration.”
The White House did not comment on what it would deem a disproportionate fine. The EU’s executive branch has publicly committed to responding “swiftly and decisively” to any retaliatory actions against fines imposed under the Digital Markets Act (DMA) and the Digital Services Act (DSA), which the White House perceives as an infringement on free speech. As tensions escalate, European factions are urging Ribera and her EU tech commissioner counterpart, Henna Virkkunen, to remain steadfast. “Failing to enforce these democratically established laws would weaken the rule of law and the EU’s legitimacy for decades,” stated Felix Styma, chair of the Initiative for Neutral Search, a coalition advocating for competitors to Silicon Valley. “This may be the last opportunity for the free world to rein in digital monopolies.” The DMA emerged from frustration over traditional competition laws that have failed to curb abusive practices, despite significant penalties, including over $8 billion in fines against Google and a €13 billion ($13.6 billion) demand for back taxes from Apple by Ireland.
Under the DMA, the EU has ongoing investigations involving Apple, Meta, and Google. While the probe into Google’s search business is experiencing delays, the EU has the authority to impose fines on Apple and Meta of up to 10% of their global revenue. Although there are no legal deadlines for fines under the DSA, noncompliance could incur penalties of up to 6%. Both Elon Musk, who is enacting sweeping changes within the U.S. government, and Trump ally Mark Zuckerberg are facing scrutiny, with ongoing investigations into X, Facebook, and Instagram. The 27-member EU has discretion in determining the amount of fines and could choose to impose lesser penalties that would be less confrontational towards Trump and Silicon Valley. This opens the possibility for a compromise that avoids fines altogether.
“The DMA and DSA are now established EU laws that must be enforced,” commented Assimakis Komninos, a partner at law firm White & Case, who has previously represented Big Tech clients. “However, imposing excessive fines merely for publicity does not serve a constructive purpose.”
