Why the Trump-Musk Challenge Presents an Opportunity for EU Digital Regulation
A recently published report by the Institute for European Policymaking, written by a multidisciplinary team of researchers at Bocconi University and the Toulouse School of Economics, provides timely insights into these challenges and offers concrete policy recommendations across three critical areas
Elon Musk's recent interference in the German electoral process presents a critical challenge to European democratic institutions. The X (formerly Twitter) owner is using his platform to promote the far-right AfD party.
This isn't just another political endorsement; it's a powerful reminder of how foreign tech platforms can influence elections in the EU, raising fundamental questions about the intersection of technological power and political sovereignty.
From a legal perspective, the European Union possesses several mechanisms to protect itself from such interference – such as the Digital Services Act (DSA). It came into force in November 2022, and it is reaching its full effect in a few weeks: most services had 15 months to comply (until 17 February 2024), while "very large" online platforms like X were required to comply earlier, by August 2023.
The DSA has been created precisely to protect users from illegal content, invasive advertising targeting, and disinformation on digital services. Among other things, the DSA allows the investigation of algorithmic practices that amplify specific political narratives, potentially undermining the electoral process.
In January 2025, the European Commission intensified its investigation of X by demanding detailed documentation about the platform's algorithmic systems. This action expanded an ongoing probe into potential DSA violations. However, critics argued that the Commission's response remains too slow and measured, given the urgency of addressing the recent cases of electoral interference.
The same is happening in the economic sphere. Here the rule of law in Europe is set by a plethora of other regulations – something that the Commission with its recent EU Competitiveness Compass released the last week of January 2025 is finally planning to fix. As we write, the most important of these rules is the Digital Markets Act (DMA) a regulation that poses a series of dos and don'ts for the largest online platforms in their interactions with the businesses operating with and through them.
Many large associations of EU companies involved in the tech sectors have just written to the Commission to request that the DMA rules be enforced against platforms’ infringements, without hesitations and preferential treatments, but simply respecting the law.
But, going back to the close ties to the U.S. President of the tech oligarchs, this relationship seems to complicate the EU's response. While EU regulations allow for substantial penalties - the Digital Markets Act permits fines up to 6% of a platform's global turnover - fears of U.S. retaliation have made Brussels hesitant to act against X or other platforms.
Indeed, just a few weeks ago Mark Zuckerberg expressed frustration over the EU imposing over $30 billion in penalties on U.S. tech companies for legal violations over the past two decades. Meta, his conglomerate, was recently fined €797 million for breaching EU antitrust rules.
Zuckerberg criticized the European Commission's competition enforcement, likening it to a tariff on American tech firms. He also blamed the U.S. government for not defending the sector, arguing that instead of protecting U.S. companies, it led initiatives that allowed the EU to target them without restraint. His comments were made during an appearance on Joe Rogan's podcast.
Yet this crisis presents an opportunity. The EU can demonstrate its commitment to digital sovereignty and the rule of law. By taking decisive action, Brussels would signal that neither tech giants nor foreign governments can override European democratic values. This would also advance the EU's broader strategy of fostering fair digital markets and nurturing its own tech sector.
The political ramifications of the case extend far beyond a single platform or election. The EU must approach this challenge by investing more in advanced technologies and nurturing a tech sector, as well as strategically leveraging and ameliorating its current legislative arsenal. This requires comprehensive utilization of existing instruments like the DSA while simultaneously investing in emerging frameworks such as the EU Hybrid Toolbox and the European Democracy Shield.
The EU must also streamline how its traditional antitrust policy and the new rules under the Digital Markets Act can coexist. While these tools have different legal foundations, they serve complementary purposes: competition law tackles market abuse, while the DMA ensures fairness and contestability in digital markets. Together, they form a powerful framework to reduce Big Tech's dominance and open up digital markets to new players.
A recently published report by the Institute for European Policymaking, written by a multidisciplinary team of researchers at Bocconi University and the Toulouse School of Economics, provides timely insights into these challenges and offers concrete policy recommendations across three critical areas.
The report examines the DMA's relationship with EU antitrust law and its role within the Commission's broader competition policy approach in digital markets. The study analyzes how DMA rules apply to various platform services, including digital advertising, marketplaces, internet search, and social networks.
Without proposing radical changes, it emphasizes the importance of strengthening DMA provisions to ensure business partners can operate in a stable and fair environment conducive to growth and investment.
On merger control, the report addresses the challenges posed by digital market concentrations and their impact on competition. It examines the tension between calls for stronger enforcement at both the Commission and the Member State levels and recent political proposals. Through comparative analysis of economic research and enforcement experiences in the EU and US, the study provides novel policy suggestions to better address the problematic effects of digital mergers on innovation and competition.
Finally, the report explores Web 3.0 platforms as potential drivers of Internet decentralization. It examines how these platforms, leveraging technologies like blockchain, Distributed Ledger Technologies (DLTs), Decentralized Finance (DeFi), and Decentralized Autonomous Organizations (DAOs), offer alternatives to the current centralized Web 2.0 model. The analysis focuses on practical applications and B2B supply-chain finance solutions, emphasizing how reduced fragmentation and enhanced interoperability could improve capital markets and supply-chain efficiency.
The convergence of these three areas – enhanced platform regulation, reformed merger control, and support for decentralized technologies – offers a comprehensive framework for addressing both immediate challenges and long-term structural issues in digital markets. The report indicates that addressing the challenges posed by the power of private corporations requires not only immediate regulatory responses but also longer-term structural changes to the digital economy. By implementing these recommendations, the EU could foster investments and move toward a more competitive and democratic digital environment.
A recently published report by the IEP@BU, written by a multidisciplinary team of researchers at Bocconi University and the Toulouse School of Economics, provides insights into these challenges and offers concrete policy recommendations
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
