The administration should leverage an essential legal tool against unfair practices in digital markets.
E urope’s campaign to undermine American tech is finally getting the attention it deserves. Last week, the House Judiciary Committee held a hearing examining how EU laws like the Digital Services Act (DSA) and Digital Markets Act (DMA) are being used to censor speech, punish U.S. companies, and tilt digital markets in favor of European firms.
It’s a welcome shift in tone — both from lawmakers and Washington more broadly. Fresh off a decisive win in the July 27 U.S.–EU trade agreement, the Trump administration has already begun responding to Europe’s so-called “digital sovereignty” campaign. Just recently, the State Department ordered U.S. diplomats across Europe to launch an opposition campaign against the DSA.
The directive signals Washington’s readiness to escalate if Europe continues deploying digital policy as a tool of discrimination.
And if persuasion fails, Section 301 should be the next step. This provision of the U.S. Trade Act empowers the Office of the United States Trade Representative (USTR) to investigate and respond to foreign trade practices that are unfair, discriminatory, or restrictive to U.S. commerce.
Europe’s digital sector strategy undoubtedly fits the bill. In addition to the DSA, European countries, such as France, Spain, and Italy, have used a growing web of regulation to target American firms, draining hundreds of millions from these companies through tools like the Digital Services Taxes (DSTs) while sparing their own.
France, Spain, and Italy structure these taxes around revenue thresholds that domestic firms conveniently do not meet. This allows them to collect funds from American companies that then become a significant source of cash flow for European authorities, which encourages these regulators to use fines as a central part of their enforcement toolkit.
The Trump administration already launched a Section 301 investigation into these very DSTs in 2019 and found them to be actionable violations of trade commitments. But the Biden administration’s USTR abandoned the effort. As a result, these countries continue collecting hundreds of millions of dollars from American tech companies under these taxes. In 2022 alone, France raised $640 million from its 3 percent DST; Italy brought in $307 million; and in 2023, Spain pocketed nearly $300 million from its 3 percent DST.
The Trump administration’s USTR could simply reopen the investigation or relaunch a broader one to include other unfair digital policies. A broader investigation would be especially timely, given Europe’s aggressive push to expand its regulatory arsenal.
For example, while its Digital Markets Act already targets U.S. firms with obligations from which smaller (often European) competitors are exempt, the EU is now advancing a Digital Networks Act. This act will overhaul its telecom rules and undoubtedly become another tool for targeting American tech companies. In addition, regulators in Italy have recently introduced “network usage fees” through a loophole in the trade agreement, setting a precedent that other EU countries could follow to undermine many of the concessions President Trump secured.
Europe insists these measures are about defending “democratic values against deregulation pressures” – whatever that means. In reality, this digital sovereignty campaign has amounted to little more than a justification for stifling online speech and extorting massive monetary penalties from American companies.
What’s worse, as U.S. tech companies are taxed, regulated, and dragged through antitrust proceedings in Europe for the crime of being successful, Chinese Communist Party–linked firms like Huawei are welcomed with open arms into Europe’s digital infrastructure, acquiring significant market share and dangerous control over essential telecommunications networks. “Digital sovereignty” be damned.
These European practices are undoubtedly unfair, discriminatory, and restrictive, and they satisfy every threshold for a Section 301 probe. They are protectionist, selectively enforced, and clearly designed to harm U.S. companies in violation of international norms.
The Trump administration clearly desires a swift resolution to these negotiations. That said, European countries still have time to voluntarily phase out their discriminatory digital policies.
However, if the EU continues to unfairly target U.S. tech companies, the United States has the legal authority supported by precedent to act. In fact, just last month, the USTR opened a Section 301 investigation into Brazil’s digital trade practices, which, much like Europe’s, are structured to affect U.S. firms disproportionately. The same tool can and should be used to hold European governments accountable.
The administration has not only the right but also the obligation to use all necessary tools at its disposal, including Section 301, to stop digital discrimination and bring international digital markets into balance.
Ashley Baker is the executive director of The Committee for Justice, a nonprofit organization that advocates for the rule of law and constitutionally limited government. She is an expert on antitrust, administrative law, technology policy, and the Supreme Court.