The EU's 'long-arm' regulatory approach could create frosty US environment for European tech firms

By Solomon Klappholz for IT PRO
Thursday, December 21, 2023

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The EU risks making the US a hostile environment for European tech firms with its Digital Markets Act (DMA), according to industry experts.

European tech firms could face frosty reception in US

Dr Ilia Kolochenko, chief architect at ImmuniWeb and adjunct professor of cyber security and cyber law at Capitol Technology University, told ITPro the EU’s regulatory approach is not perfect, but argued it is preferable to the ‘Byzantine’ regulatory framework in the US.

“While it’s true that technology regulation in the EU – spanning from the mature GDPR to novel AI Act – is not 100% perfect, it’s still better than the convoluted patchwork of state legislation on privacy and data protection matters in the US, which are only partially addressed by pretty obsolete US federal laws and regulations.”

Kolochenko noted the two regions’ approaches to tech regulation are “innately incompatible’.

The result of this incompatibility, Kolochenko fears, will be a punitive response from the US.

“US tech companies and other industries concerned by the extensive and arguably harsh EU regulations will probably lobby for a legislative response to make European companies pay a high price for doing business on American soil,” he said.

“This outcome will be highly undesirable and counterproductive for both the US and EU. The ideal solution would be to find a middle ground approach to sustainably regulate innovation and technology that would peacefully coexist on both sides of the Atlantic.” Read Full Article