European Tech Regulations Pose Threat to American Innovation, Warn Experts
EU tech regulations are hampering innovation and degrading consumer experiences, panelists said.
WASHINGTON, Oct. 29, 2025 — European Union regulations targeting major technology companies are hampering innovation and harming consumers while predominantly affecting American firms, two technology policy experts said Wednesday during a Broadband Breakfast Live Online panel discussion.
The Digital Markets Act and Digital Services Act, which were promulgated in 2022 and took effect in 2023 and 2024, have imposed significant compliance costs and operational restrictions on tech giants, including Apple, Google and Meta, said Jennifer Huddleston, Senior Fellow in Technology Policy at the Cato Institute.
"[These] laws are largely targeting American companies, and as a result are impacting American consumers in some cases, not only from the cost of the compliance that these companies have, but also in some cases from how that compliance has to actually look," Huddleston said.
Broadband Breakfast
The DMA functions as an ex-ante competition law that bans anti-competitive practices like self-preferencing by "gatekeeper" platforms controlling app stores and search engines, while the DSA serves as a platform-governance law focused on content moderation, transparency and risk assessments. The DMA aims to keep digital markets contestable through interoperability mandates and switching rights, while the DSA updates online-intermediary rules to create safer digital environments through clearer procedures for illegal content and independent audits.
Joseph Coniglio, director of antitrust and innovation at the Information Technology Innovation Foundation, said the DMA has already produced negative effects despite only being actively enforced since March 2024.
"We're already starting to see some negative effects from these laws," Coniglio said, citing consumer surveys showing that 35% of EU respondents found Google search had degraded under DMA requirements, while 60% said it worsened in terms of clicks needed to reach desired content.
The regulations have particularly impacted Apple, which delayed releasing Apple Intelligence features in Europe due to interoperability requirements that the company said compromised security and privacy protections.
"Apple has certainly said that the interoperability restrictions that Europe is imposing on them are the cause of these sorts of restrictions," Coniglio said, noting the company also couldn't release a live translation feature for AirPods in Europe for similar reasons.
Panelists contrasted different approaches to technology
The panelists contrasted European and American approaches to technology regulation. While the U.S. has historically taken a light-touch regulatory approach focused on consumer welfare, Europe has adopted more precautionary, regulatory-heavy policies.
"Europe has long taken a different approach to technology policy regulation. One that's much more precautionary, one that was much more regulatory than the light touch approach that the U.S. has had," Huddleston said.
This regulatory divergence has contributed to Europe's failure to develop competitive tech companies, according to the experts. They cited the recent Draghi report, commissioned by the European Commission, which found Europe's productivity gap with the United States is "basically entirely a result of digital."
Huddleston warned that European regulations could serve as templates for other countries through what she called the "Brussels effect," where compliance costs lead companies to implement European standards globally.
"When companies were investing such high amounts of money in this compliance, oftentimes these privacy policy changes would just be rolled out more globally," she said, referencing the earlier General Data Protection Regulation.
The panelists expressed concern about potential spillover effects into artificial intelligence regulation, warning that heavy-handed approaches could stifle innovation in nascent technologies.
"This is such a dynamic and such an early phase of this being a consumer-facing innovation that there's a lot of what don't we know," Huddleston said regarding AI policy.
Coniglio emphasized the importance of transatlantic cooperation in technology, particularly given competition from China, arguing that "Europe and the United States basically have no choice but to work together if the West is going to stay techno-economically on top in the 21st century."
Member discussion