Trump's tariff threat challenges EU's resolve on Apple and Meta
The European Union's determination to challenge the power of Silicon Valley will be put to the test after Donald Trump threatened retaliation over fines that could impact some of America's largest companies.
The US President warned last week that he’d strike back with heavy tariffs following any “disproportionate” penalties and said that the EU’s Digital Markets Act is in his crosshairs, News.Az reports citing Luxembourg Times.
His tough stance threatens to corner new EU competition chief Teresa Ribera, who’s risked her reputation by promising to wrap up investigations into Apple Inc. and Meta Platforms Inc. by the end of March - with potentially eye-watering penalties should they fail to allay her concerns.
If Ribera stands firm, the EU faces the president’s wrath. Give in and she risks fatally undermining landmark legislation aimed at reining in Big Tech.
Like the EU’s traditional antitrust rules, the recently adopted DMA paves the way for fines of as much as 10% of a company’s revenue, although the EU has seldom levied penalties approaching that limit. Aside from Apple and Meta, the EU has an open DMA case into Google’s search business that’s faced delays.
The White House didn’t respond to a request for comment on what would be considered a disproportionate fine.
Apple is being probed by EU regulators under the DMA for allegedly preventing apps from being able to link out to alternative platforms to make purchases. It faced a €1.8 billion fine last year for similar abuses but only against music-streaming apps, under the bloc’s traditional antitrust tools.
Publicly, the EU’s executive has pledged to respond “swiftly and decisively” to any retaliation to fines under the DMA and the Digital Services Act, a content-moderation law seen by the White House as a direct attack on freedom of speech. As the threats persist, European groups are urging Ribera and her EU tech commissioner counterpart Henna Virkkunen not to buckle.
“Not enforcing these democratically created laws would undermine the rule of law and the legitimacy of the EU for decades,” said Felix Styma, chair of the Initiative for Neutral Search - a pan-European coalition representing competitors to Silicon Valley. “This may be the last chance the free world gets to rein into the digital monopolies.”
The DMA - which includes a list of dos and don’ts for powerful companies enjoying so-called gatekeeper status - was born out of frustration at the failure of traditional competition rules to change abusive behaviour.
Over recent years the EU has made costly penalties against firms, including more than $8 billion (€7.61 billion) in fines against Google and a separate order for Apple to pay Ireland back taxes of €13 billion. Under its abuse-of-dominance rules, it has also forced changes out of Amazon’s marketplace platform and Apple’s tap-and-go chip, while also investigating Microsoft’s video conference software, Teams.
Although there are no legal deadlines for fines in the DSA, platforms risk penalties of up to 6% for noncompliance. Elon Musk, currently carrying out a scorched-earth overhaul of the US government, and new Trump ally Mark Zuckerberg find their platforms under scrutiny - with probes into X, Facebook, and Instagram all underway.
Because the EU has flexibility in how it calculates fines, it could opt for levels that are much less threatening to Trump and Silicon Valley. One face-saving solution would be to avoid fines altogether.
“The DMA and the DSA are now EU law and have to be applied,” said Assimakis Komninos, a partner at law firm White & Case who has represented Big Tech clients in the past. “But exorbitant fines just to make headlines do not help.”
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