Europeans are well aware of this, but hold two views on how best to respond. One camp argues that, defying Trump’s pressure, the EU should redouble its efforts to regulate BigTech, taking an even more ambitious approach that will break the tech giants’ market dominance and mitigate the social harms of their products. The other camp calls for a massive increase in public and private investment in technology infrastructure, both to limit Europe’s vulnerability to foreign coercion and to strengthen its economic competitiveness.
These positions are not as far apart as one might think. Robust, well-designed, and vigorously enforced regulation can neutralize the advantages of incumbent technology firms, enable challengers to operate, and reinforce the common standards and norms that underpin democracy and open decentralized markets. At the same time, the existence of robust European social networking platforms, artificial intelligence models and cloud computing capabilities will significantly strengthen EU competitiveness and sovereignty.
Unfortunately, the complementary nature of these positions is rarely recognized. Instead, representatives of the “competitiveness first” camp tend to either dismiss regulation as a waste of time, noting that past attempts to curb BigTech have always failed, or condemn it for allegedly hindering Europe’s technological ambitions. The latter view, demonstrated last month at the Digital Sovereignty Summit in Berlin, helps explain why the European Commission is now rushing to soften landmark digital laws, including the Artificial Intelligence Act and the General Data Protection Regulation (GDPR), with a so-called “omnibus” package.
Europe’s failure to create globally competitive tech companies should be attributed to weak enforcement rather than over-regulation. Despite having powers to break up monopolies and block killer acquisitions, the European Commission rarely resorts to them, fearing that doing so could stifle innovation or invite retaliation from the United States.
Thus, it can be argued that strong regulation, including strict merger control, is a prerequisite for building a strong technology industry in Europe. Without it, efforts to create European alternatives will continue to be hampered by BigTech’s anti-competitive tactics, including their use of market power to collect vast amounts of user data and close more and more markets to smaller competitors.
Rather than choosing between increased tech regulation and increased incentives and support for the tech sector, Europe should adopt a coordinated approach that presses today’s U.S. tech giants from both sides. Without credible local alternatives, regulators will find it difficult to manage technology monopolies that are “too big to care.” And without strong enforcement to break up technology monopolies, the money thrown at European businesses and technologies is likely to be wasted or, worse, end up in the vaults of U.S. giants.
Max von Thun,
Director for Europe and Transatlantic Partnerships at the Open Markets Institute.
© Project Syndicate, 2025.
www.project-syndicate.org
