Tech support

US officials pressure European power broker over Big Tech regulation

The Biden administration has lobbied a major Brussels broker in a bid to mitigate the impact of European regulations targeting the market power of Big Tech companies.

A senior US official has written to Andreas Schwab, a member of the European Parliament who is leading negotiations on the Digital Markets Act, which aims to prevent groups such as Google, Amazon, Apple, Facebook and Microsoft from placing their own services above above those of their rivals.

The letter, seen by the Financial Times, was signed by Arun Venkataraman, adviser to Gina Raimondo, the US Secretary of Commerce.

Venkataraman writes that he “relays concerns surrounding the implementation period of this complex regulation” while calling for the new rules to be expanded to incorporate companies from countries other than the United States.

The official lobbying effort comes even as many U.S. lawmakers are pushing for their own tougher tech regulations at home, a sign of a split at the top of the Democratic Party on the issue.

The world’s leading tech companies have launched their own campaign to influence policymakers seeking to resist global efforts to rein in their power. Last week, Meta reiterated its threat to take down Facebook and Instagram in Europe after concerns about upcoming EU digital laws in its latest tax filing.

The US Commerce Department’s intervention is an effort to push back against EU rules that would hit America’s biggest tech companies.

“We call on the EU to use scope criteria that do not discriminate against U.S. businesses in law or in fact, including ensuring that significant European and foreign competitors of covered U.S. businesses are subject to the DMA,” indicates the letter.

Member states and the European Commission have argued that the DMA should affect companies with a market capitalization of at least €65 billion – a threshold that would capture far more than the five largest US tech companies, each valued at more than €65 billion. of $1 billion.

Regulators are finalizing both the DMA and the Digital Services Act, a separate law that aims to clarify how big online companies must keep illegal content off their platforms.

Together, the pieces of legislation will define the new rules for policing the internet for the first time in more than two decades. The proposed laws are seen as an international test of whether politicians are able to limit the power of Big Tech.

Many provisions of the DMA are echoed in a similar bill promoted in the US Senate by Amy Klobuchar, the Democratic senator from Minnesota.

Raimondo has already come under fire from some of her party’s most senior congressmen for her stance on the DMA. Last year, the Commerce Secretary raised concerns that the law would disproportionately hurt American businesses, but she was criticized for it by Elizabeth Warren, the Democratic Senator from Massachusetts.

Venkataraman urges European officials to take intellectual property rights protection and security concerns into account when drafting the law, which is expected to come into force next year. A similar argument has already been used by Apple in particular.

In a response seen by the FT, Schwab accused US officials of using security issues to perpetuate Big Tech’s power. “As policy makers, we also need to ensure that such concerns are not artificially created to hide behind,” he writes.

The Commerce Department said: “While we engage on concerns we have about separate elements of the EU’s approach, we encourage bipartisan progress in Congress on these issues.”