A group of nearly 50 bipartisan members of the House of Representatives signed a letter addressed to President Biden raising their concerns with the extraterritoriality of some of the EU’s tech regulations. This letter urges the President to raise these concerns through the Trade and Technology Council (TTC) meetings with the EU. This development is significant in that it’s both a bipartisan exercise and signed by a number of senior members of the House of Representatives. It should be taken seriously by the President and his team at the White House, and we urge them to flag these concerns with their EU counterparts.
The EU’s attempts at regulating the tech industry in Europe are bleeding over to the American tech industry, too. Whether or not the overreach is by design is in the eyes of the beholder (there is evidence that the EU is designing its regulations to have an outsized effect on American businesses). But make no mistake, there are tangible costs. The EU’s Digital Services Act (DSA) and the Digital Markets Act (DMA) could cost American tech firms up to $50 billion in compliance costs! These are costs that will eventually be passed on to the consumer. And while some of these regulations may not directly target the small- and medium-sized firms we represent, they will undoubtedly get caught up in this regulatory web. $50 billion spent on compliance by big, multinational firms is $50 billion not spent on investing in small startups, building new cutting edge hardware, or expanding platforms so SMBs can market and sell their goods.
U.S. regulators have generally operated with a light regulatory touch when it comes to our domestic tech industry. And that’s a good thing. Our industry is the envy of the world. It’s creating jobs, growing the economy, and keeping us globally competitive. If the EU hopes to achieve a similar outcome, it should look to the U.S. for guidance. Heavy-handed, preemptive regulations that harm both the EU and U.S. tech industries are a recipe for failure. At a time when adversaries around the world are working to prop up their own industries, regulators in the EU and U.S. should be working in harmony to nurture their tech industries to ensure they can flourish.
We appreciate the leadership exhibited by those members of Congress who signed this very important letter. We look forward to working with them on this and other regulatory matters developers are navigating.