Anti-American Antitrust and the Global Spread of Non-Tariff Regulation
TL;DR
Background: There has been a growing trend of jurisdictions invoking concerns about fairness, contestability, and consumer protection to justify aggressive antitrust enforcement and ex ante regulation of digital platforms that overwhelmingly target U.S.-based firms. The European Union’s Digital Markets Act (DMA) is the model for this approach, subsequently emulated by jurisdictions ranging from Japan and South Korea to Brazil and Australia. Proponents argue these rules are needed to rein in dominant firms and restore competitive balance in digital markets.
But… The evidence suggests this narrative is backward. The EU’s regulatory turn is driven not by market failures, but by economic stagnation and political incentives. Rather than curing competition problems, regimes like the DMA function as non-tariff barriers that tax successful U.S. firms, while imposing real costs on consumers, degrading innovation, and exporting regulatory inefficiency worldwide. If left unchecked, this dynamic threatens to undermine U.S. competitiveness and fragment the global digital economy.
KEY TAKEAWAYS
The EU Offensive Reflects Stagnation
U.S. productivity and income growth in the 21st century have far outpaced that of the EU, a divergence driven almost entirely by the tech sector. The United States has produced the world’s leading digital firms and a deep pipeline of fast-growing startups. Meanwhile, no EU company with a market capitalization of more than €100 billion has been launched in the past half-century.
Europe’s economy is dominated by mature industries, while its regulatory environment inhibits firm entry, scaling, and resource reallocation. Significant labor rigidity, fragmented capital markets, and growing regulatory burdens suppress the very dynamism that drives productivity growth.
The Path of Least Political Resistance
When policymakers cannot generate domestic champions, regulating foreign success becomes the politically easiest response. Targeting U.S. tech firms offers political rewards and low domestic costs. Unlike farmers, industrial workers, or energy consumers, U.S. tech firms have no mass electoral constituency in Europe. They have few employees and fewer voters, making their losses politically invisible.
Regulation also creates clear beneficiaries. Privacy advocates, civil-society groups, legacy industries, access seekers, and rival firms form coalitions that support intervention. These “Baptists and bootleggers” supply both moral cover and economic pressure for regulation that redistributes value without improving consumer welfare.
The costs are palpable, albeit diffuse and delayed. Consumers experience degraded products, slower innovation, and fewer choices, but rarely trace those harms back to regulation. This asymmetry makes aggressive intervention almost inevitable.
DMA Operates as a Non-Tariff Barrier
While framed as neutral, the DMA’s criteria were effectively reverse engineered to capture a specific set of firms. The law’s thresholds neatly encompass the leading U.S. platforms, while excluding European incumbents in telecommunications, media, finance, and other concentrated sectors. The first gatekeeper designations confirmed this reality: nearly all targets were American.
Enforcement patterns reinforce the point. While European firms account for most competition cases by volume, U.S. firms account for the overwhelming share of fines.
Moreover, antitrust penalties flow directly into the EU budget, creating a powerful fiscal incentive for aggressive enforcement. Recent fines on U.S. tech firms amount to a significant share of EU tariff revenues, effectively functioning as a hidden tax on American digital exports.
This combination of targeted scope, asymmetric enforcement, and revenue extraction makes the DMA economically equivalent to protectionism, even if it is not labeled as such.
Consumers Are Already Paying the Price
The claim that these regulations are pro consumer does not withstand scrutiny. Mandatory unbundling and interoperability, and prohibitions on integration have degraded product quality across the EU. Search results are less useful. Mapping and travel tools are fragmented. Personalization has declined. Security risks have increased, as platforms are forced to open their systems to third parties (here and here).
More importantly, innovation is being delayed or denied altogether. Firms now routinely postpone or withhold product launches in Europe due to regulatory uncertainty and compliance risk (here and here). Advanced AI features, new applications, and integrated services reach EU consumers months or years later, if at all.
Behind the scenes, hundreds of thousands of engineering hours are being diverted from research and development to compliance work. This is not a theoretical cost; it is a measurable reallocation of scarce talent away from innovation.
Defending US Firms Is the Norm
Vigorous resistance to discriminatory foreign regulation is not a radical departure from U.S. policy. It is the historical norm. Republican and Democratic administrations alike have pushed back when foreign governments used regulation to disadvantage U.S. firms.
From Ronald Reagan’s response to Europe’s hormone beef ban, to Bill Clinton’s intervention in the Boeing/ McDonnell Douglas merger, to Barack Obama’s criticism of EU actions against U.S. tech companies, the principle has been consistent.
What stands out as unusual is the passivity of recent years. Collaboration between U.S. agencies and EU regulators in implementing DMA-style policies that predominantly target U.S. firms was the anomaly. Restoring a policy that defends U.S. innovation, insists on reciprocity, and resists non-tariff barriers would be a return to bipartisan economic statecraft, not a rejection of cooperation.
Time for the United States to Push Back
Europe’s digital regulation reflects a particular set of misaligned incentives, not superior policy. If the United States fails to respond, these rules will continue to spread, exporting stagnation and weakening global innovation.
Altering that trajectory requires raising the political cost of discriminatory regulation, defending the consumer-welfare standard, and ensuring that the United States does not validate abroad what it has wisely declined to adopt at home.
For more on this issue, see Dirk Auer’s Dec. 16, 2025 testimony to the House Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust.