The recent enforcement actions by the European Commission under the Digital Markets Act (DMA) have been met with sharp criticism from the US government and global industry leaders.
As doubts grow over the future of the transatlantic relationship and Europe seeks to reclaim its competitive edge in the global digital arena, the continent finds itself at a crossroads. With complex regulations straining ties with international partners, the pressure is on to create a supportive business environment that upholds consumer protections while also driving industry growth, in tech and beyond.
A timely virtual Euronews debate, Europe's Choice – The Transatlantic Relationship at a Crossroads, brought together policymakers and global industry leaders to discuss the implications of the EU’s regulatory stance and how it can balance its responsibility to protect citizens while championing innovation.
The DMA dilemma: balance or backlash?
Markus Reinisch, Vice President of Public Policy Europe for Meta, provided a pointed assessment of the current situation during the debate. "There have been very positive ambitions and actions in Europe, and we're slowly moving away from excessive caution and risk avoidance to embracing innovation. But, Europe's actions don't reflect the criticality of the situation,” he warned. “We're falling behind in GDP growth, productivity and future investments, particularly in AI and technology.”
Reinisch also spotlighted regulatory fragmentation and discriminatory application of regulatory frameworks within Europe. He noted that Europe had around 270 regulators, each with their own interpretation and agenda. “There’s no standardisation, no harmonisation,” he said, pointing to the “knock-on” effect this has on business in Europe.
He noted that each euro that advertisers spend on personalised advertisements on Meta’s platforms brought nearly four euros in revenue for the advertising business, and that “regulation that singles out certain non-European platforms, [not only] holds them back but holds Europe back as well”. His warning reflects the deeper dilemma faced by the EU: while regulation is essential to ensure fairness and protect consumers, its implementation must be consistent to foster a competitive tech landscape based on Western values.
Innovation needs clarity, not complexity
Claudia Dollins, Vice President for Global Regulatory Affairs at GSK, also pointed to the stifling effect of regulatory complexity on innovation, particularly in the medtech and clinical research sectors. “In [the medtech] space, we have a combination of many pieces of regulation coming together, leading to incredibly long and complex clinical trial authorisation procedures that are often redundant,” she explained. “There are rich opportunities for streamlining. This is a great time for Europe to make a mark and be bold.”
Dollins’ remarks echo a common frustration within the tech and healthcare industries: well-meaning regulations often become bottlenecks, slowing down progress rather than supporting it. While she acknowledged the utility of some exemptions, such as the AI R&D exemption within the AI Act, she suggested that these should not be the exception but the rule. “We must focus on speed. Identify the hurdles to innovation and remove them.”
Draghi’s diagnosis: Europe at a crossroads
The diagnoses of the 2024 Draghi report featured prominently in the conversation, with panellists calling for the Commission to heed Draghi’s warnings about the stifling consequences that the fragmented, sluggish EU policy environment has on European competitiveness. The report calls for radical reform, emphasising the need for regulatory simplification and a cohesive strategy to enhance Europe’s position in the global tech landscape .
Zach Helzer, Senior Director for Europe at the US Chamber of Commerce, underscored the importance of transatlantic collaboration in creating conducive environments for innovation, noting that US companies are “heavily invested in Europe’s success” and are keen to be a part of the solution. “We need to be bold not just in creating rules but also in removing friction.” Helzer said. “The pace of AI is unlike anything we’ve seen before — overregulation will hinder development.”
Despite commending the European Commission’s AI Continent Plan’s ambitions, Helzer asserted that “it failed to address deeper dysfunction in Brussels’ regulatory machinery,” predicting that, “without alignment, it won’t succeed.” He also noted that private US investment in AI last year reached almost US$70 billion — several times more than Europe’s. “The ambition is there," he said, “but the follow-through doesn’t necessarily move the needle yet.”
In line with Draghi’s report, Dollins also advocated for streamlined processes: "We need to identify what is working well, what is not, and remove complexity.” Otherwise, our panellists agreed, Europe risked stifling the kind of innovation needed to compete with global tech powerhouses like the US and China.
A fragile alliance with high stakes
Despite mounting regulatory friction between Europe and the US, there remained broad agreement among the panellists that transatlantic cooperation is crucial for geopolitical stability and technological leadership.
Dariusz Standerski, Poland’s Secretary of State for Digital Affairs, underlined the importance of shared values in the US-EU relationship, noting that both parties have new opportunities to work together, including in defence systems and dual-use goods, despite the broader political rhetoric surrounding tariffs.
Reinisch challenged the growing protectionist tendencies within Europe, calling for the EU to renew its commitment to technological leadership by collaborating with its Western allies, rather than becoming insular in its pursuit of regulatory power.
“We need to fall back in love with the future. Europe has led before — with 3G and mobile internet, for example. We can lead again, but not if we retreat into protectionism.”
Striking the right balance
As the Europe’s Choice debate on transatlantic relations drew to a close, panellists called on Europe to recognise that its future competitiveness relies on its ability to rethink its approach to regulation, capitalise on the momentum of the simplification agenda and collaborate externally on highly strategic areas such as AI.
To stay competitive on the global stage, Europe must strike a careful balance: regulate boldly, but not blindly. Fairness and consumer protection matter — but so do regulatory clarity and economic success, which would enable Europe to better address pressing matters such as security and geopolitical change. Poland’s Secretary of State for Digital Affairs, Dariusz Standerski, made the case plainly: “We are one union, and that’s why we need to have a consistent legal system across the continent.”
At the same time, stronger transatlantic cooperation — especially in AI and defence — could prove essential. The debate made one thing clear: Europe’s future in tech hinges not just on setting the rules, but on playing smart with its partners.