Last week, the European Commission fined X, tech trillionaire Elon Musk’s social media company, €120 million under the Digital Services Act. Musk and his US allies immediately lashed out, calling the penalty an “attack on all American tech platforms and the American people.”
The fine comes in the wake of a new US National Security Strategy that paints Europe as a weakened ally beset by “regulatory suffocation” and “lack of self-confidence.”
But analysts and European Parliament officials told The Parliament that the fine demonstrates the opposite: Europe is using one of the few sources of leverage it still has in an increasingly asymmetric transatlantic relationship — regulatory control over tech giants operating in Europe.
Rather than marking the decline of the “Brussels effect” — the ability of the European Union to set global regulatory standards — the Commission’s action shows that the EU remains willing to go toe-to-toe with Washington and Silicon Valley amid worsening geopolitical tensions. And the bellicose American response to the fine shows the Americans know it.
“We do not allow ourselves to be dictated to by Washington or Silicon Valley,” Sophie Wilmès, the European Parliament’s vice-chair for relations with the United States.
“European sovereignty also means the ability to determine, by itself, the rules it wishes to apply on its own territory,” she added.
Chase Foster, a lecturer at King’s College London specializing in competition law and regulatory policy, said the “fine shows that the EU still has autonomy and the EU can still defend its core interests.”
He added: “I don’t sense that they are backing down on any of the specific areas of regulation that are already established. In fact, I would say they are continuing to deepen and broaden the Brussels effect.”
Fine on X the first under landmark Digital Services Act
While EU regulators have a long history of fining American tech companies, last week’s penalty broke new ground. It was the first issued under the Digital Services Act, a relatively new framework that dramatically expands European authority over digital platforms
The €120 million fine followed a nearly two year-long investigation launched in December 2023. The ruling covered deceptive design, lack of advertising transparency, and a failure to provide researchers access to data. Other probes remain open, including potential dissemination of illegal content and inadequate action against misinformation, according to Lena-Maria Böswald, a researcher on European tech policy at Interface specializing in digital markets.
Those unresolved issues are highly sensitive. Böswald said the Commission may have chosen to begin with clearer compliance failures given the tense state of EU-US relations. Still, she expects more penalties ahead.
“I don’t think X will make those adjustments that the Commission is asking for,” she said. “Those decisions could then be put before the Court of European Justice, which can open a long road of legal proceedings.”
TikTok, which faced similar scrutiny, opted to modify its practices to comply with the DSA. X refused, strengthening the case for enforcement.
“The EU sees this as a technocratic process, and they make a conscious choice to not allow trade issues to affect the findings of the investigation,” said Arthur Leichthammer, a policy fellow specialising in geoeconomics at the Jacques Delors Centre in Berlin. “On the other hand we have the US, which tries to hook all of this together to the broader transatlantic relationship.”
The Brussels effect meets the Trump era
Finnish scholar Anu Bradford coined the term “Brussels effect” to describe the EU’s ability to set global regulatory norms. The concept is visible in everything from Apple’s universal charging cable to worldwide GDPR compliance.
But the DSA and its companion, the Digital Markets Act — that entered into force in 2023 — marked an escalation: European regulation no longer focused solely on consumer privacy or competition but on the fundamental architecture of the digital economy. That put Brussels on a collision course with the American tech companies that have long dominated the market for digital services in Europe, such as Google, Microsoft, Meta and X.
Even the pro-Europe administration of former US President Joe Biden opposed parts of the DSA and DMA. Under Trump, the hostility has grown more explicit.
Earlier this year, US Vice President J.D. Vance attacked the DSA and DMA as “onerous international rules,” while Secretary of State Marco Rubio called the X fine “an attack on all American tech platforms and the American people by foreign governments.”
At a press conference on Monday, Commission spokesperson Thomas Regnier pushed back, saying that “the fine reflects noncompliance with law…it’s not about ideology.”
But in a telling remark, he also stressed the power dynamics at play — and how Europe wasn’t afraid to flex its muscles.
“We have many shared challenges with our American friends,” said Regnier. “You may call this weakness. I call this strength. This is European strength, and this is what we will keep doing also with our US counterparts.”
“X will have to pay that fine…we will make sure we get this money.”
Regulation as Europe’s remaining leverage
For Bradford, the Commission’s stance reflects a broader truth: in an era of superpower competition, tech regulation is one of Europe’s last reliable instruments of global influence.
Bradford has likened EU digital rules to a form of “digital empire,” and argues that consistent enforcement is key to keeping the Brussels effect alive. She warned recently in Brussels that softening European regulation in response to competitiveness concerns or American pressure would mean surrendering Europe’s most valuable bargaining chip.
For example, during trade talks this summer, the EU refused to negotiate away any part of its digital rulebook — one of few wins in an otherwise lopsided package.
That said, for some European leaders, the Commission’s simplification push — for critics a codework for deregulation — can still go hand in hand with maintaining Europe’s regulatory power.
“I believe Europe has a real problem of regulatory overload, and that there is much to streamline in various areas,” said Wilmès. “We are working on this. But I do not confuse simplification with deregulation, meaning the complete absence of rules that would usher in a digital ‘Wild West.’”
Instead, some analysts say reforms inspired by Mario Draghi’s 2024 competitiveness report should preserve, not dilute, Europe’s regulatory power — even if they reshape its form.
“The US has always had ambitions to set global standards, and so has the EU,” said Luise Quaritsch, a policy fellow on EU Democracy with the Jacques Delors Centre. “Right now, we are seeing their priorities moving in different directions, but just because the EU is not aligned with the US on what that regulation looks like, does not mean the EU cannot enforce that regulation.”
For now, the slapping of X points to Brussels doubling down.
“The fine shows the Commission wants to show the DSA has teeth,” said Böswald.
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