Middle Powers Digital Antitrust Efforts in the Age of Trump

In a speech at the February Paris AI Action Summit, US Vice President JD Vance laid out a blueprint for American tech policy over the next four years: deregulation at home and abroad. His remarks in front of European leaders, stating that the Trump administration is “troubled by reports that some foreign governments are considering tightening the screws on US tech companies with international footprints” and that Washington “cannot and will not accept that,” demonstrated the administration’s commitment to prioritizing American tech interests, even at the cost of deepening the wedge between the US and European regulatory frameworks. This position mirrors earlier statements from American Big Tech leaders, such as Meta founder and CEO Mark Zuckerberg, who likened European competition rules to tariffs.

Building on these intentions, the administration has recently taken concrete action. Last month, the White House issued a memorandum defending American tech, outlining actions, including tariffs, to counter “regulations imposed on United States companies by foreign governments that could inhibit the growth or intended operation of United States companies.” The administration also released a follow-up fact sheet specifically warning the European Union (EU) that “regulations that dictate how American companies interact with consumers in the European Union, like the Digital Markets Act (DMA) and the Digital Services Act (DSA), will face scrutiny from the Administration.” And in Congress, the US House Judiciary Committee Chair Jim Jordan (R-OH) asked Teresa Ribera, Executive Vice-President for a Clean, Just, and Competitive Transition at the European Commission for a briefing on DMA enforcement, cases against American firms, and Europe’s plans to subsidize its own tech sector. The implications could not be clearer: Washington is pressuring Brussels on digital regulation as it reassesses its economic and political relationship with Europe.

Amid these growing transatlantic tensions, middle powers are taking note. Caught between the competing influences of the Brussels Effect and the Trump Effect, countries influenced by the EU and seeking to adopt regulatory frameworks must now navigate the risks of US retaliation, including potential tariffs. In this context, what factors could influence their policy directions in regulating their digital markets?

Shifting US Regulatory Landscape From Biden To Trump

The Trump administration is not the first to raise concerns about the DMA and the DSA. Early in the Biden administration, former Secretary of Commerce Gina Raimondo voiced “serious concerns” about the regulations, noting they were “disproportionately impacting US-based tech firms” and hampering their ability to serve European consumers. The US Trade Representative (USTR) also identified the DMA as a digital trade barrier in its National Trade Estimate reports in 2021, 2022, and 2023.

However, this perspective was challenged by Senator Elizabeth Warren (D-MA), an influential voice within the Democratic Party on this issue, contending that Raimondo’s comments undermined the Biden administration’s broader agenda on promoting competition and antitrust enforcement. Most notably, in 2024, the USTR’s National Trade Estimate Report omitted the DMA as a barrier, marking a significant change in its position. Former USTR Katherine Tai, speaking at a SXSW fireside chat last year, commented that the DMA is a “really really good example” of addressing powerful platforms that control opportunities for smaller players. She emphasized the need to challenge traditional instincts like asking, “What’s the nationality of your company?” but instead consider, “What’s the pro-democracy, pro-competition, pro-worker angle?” This shift also aligned with a US court ruling, in a case pushed by Biden's Department of Justice, last summer that found Google guilty of violating antitrust laws by maintaining a monopoly in the search and advertising markets.

Now, under President Trump, while the future direction of antitrust enforcement at home remains uncertain, it is clear that foreign penalties against US platforms are being explicitly framed as discriminatory trade barriers that deserve retaliation. While the new FTC Chairman Andrew Ferguson has emphasized using antitrust laws to curb monopoly power to promote innovation, new US Trade Representative Jamieson Greer has pledged not to tolerate foreign regulations that would discriminate against American tech. This shift, along with the global spread of DMA-inspired regulations, raises the stakes in international antitrust enforcement, viewing foreign penalties as unfair trade practices against US tech companies.

Digital Antitrust Efforts By Middle Powers

A few middle powers have advanced their legislative efforts on digital competition regulations at different stages and with varying levels of risk exposure. Japan has enacted and begun enforcing its Act on Promotion of Competition for Specified Smartphone Software, adopting a strategically narrow approach. By focusing exclusively on mobile ecosystems—Search, iOS, and App Stores—rather than comprehensive platform regulation, it aims to minimize potential conflicts with the US over digital trade. The UK’s Digital Markets, Competition, and Consumer Bill, implemented in 2024, adopts a collaborative regulatory approach with tailored “conduct requirements,” starting with an investigation into Apple’s mobile ecosystem.

Yet, other countries are at different stages of the regulatory process, facing greater exposure to US scrutiny. In South Korea, the Korea Fair Trade Commission (KFTC) proposed the Platform Competition Promotion Act (PCPA) in December 2023, modeled after the DMA, but faced strong opposition from the nation’s own tech industry and US policymakers. Among the critics were former US National Security Advisor Robert O’Brien and USTR Greer, both of whom strongly criticized the PCPA, which aimed to adopt an ex-ante regulatory approach. As a result, the KFTC abandoned the PCPA in September 2024, opting instead to amend the existing Monopoly Regulation and Fair-Trade Act with an ex-post presumption regulation scheme.

Similarly, Australia, after five years of market inquiries across various digital sectors, proposed its digital competition regime in December 2024. It is currently awaiting public consultation results. However, the proposal carries heightened risks as a result of the Trump administration’s tougher stance on foreign regulations in the context of trade. Meanwhile, countries like Brazil, India, and Thailand have initiated their regulatory processes, which will likely undergo additional developments, all while US rhetoric on digital competition intensifies.

Key Factors Shaping The Future Of Middle Powers Regulatory Approaches

The EU can leverage its market size and purchasing power to withstand US pressure, but for middle powers, the policy landscape is more complex. While they share the policy objective of an open and fair digital market, they also face structural challenges, including limited market leverage against and dependency on US Big Tech and heightened vulnerability to trade pressures. Navigating these challenges requires balancing government and industry interests, with civil societies playing a pivotal role in shaping the debate. For example, in the US and EU, companies like Epic Games and Spotify actively engage in litigation and policy discussions, generating momentum that smaller jurisdictions and their courts may struggle to replicate, given their limited resources and influence.

Against this backdrop, the unique challenge for middle powers lies in the presence and competitiveness of their national tech companies, whose interests may either align with or contradict those of US Big Tech. In South Korea, platforms like Naver in search and Kakao in messaging and ride-hailing could face constraints similar to, or even more stringent than, those imposed on US tech companies, depending on the scope of what defines “gatekeepers,” which could lead to stronger domestic pushback. There are also other examples of local tech, such as LINE, a messaging app equally owned by Korean and Japanese companies, which dominates in Japan, Taiwan, and Thailand. In Australia, one of the Digital Platform Services Inquiry reports on online retail marketplaces identifies the e-commerce sector as highly competitive with no dominant player. Similarly, strong local e-commerce platforms, such as Rakuten in Japan, Coupang in South Korea, Takealot in South Africa, Tokopedia in Indonesia, Shopee in Southeast Asia, and Argentina’s MercadoLibre in Latin America highlight the strength of homegrown competitors in their respective markets.

Another emerging pattern in the debate, particularly in e-commerce, is the potential advantage Chinese platforms may gain from increased regulation. Middle powers must navigate the benefits of greater investment and competition against risks associated with these platforms, including concerns over data protection and privacy, all while managing their relationships with both China and the US. Although much attention has been given to TikTok, e-commerce platforms like Lazada under Alibaba, Temu, and Shein have also been expanding rapidly worldwide in recent years. Commentaries highlight these Chinese platforms’ growing market share and the rivalry they pose to US and local counterparts in the e-commerce market.

Domestic political dynamics further complicate regulatory efforts. In South Korea, growing political divisions, intensified by President Yoon Suk Yeol’s martial law declaration in December 2024, have caused legislative progress on digital regulations to lose momentum. In Brazil, political transitions have halted initial DMA-inspired digital platform bills, and a report by the Ministry of Finance in October 2024 proposed competition law reforms, signaling a shift in regulatory approach. These cases illustrate how political environments and elections can either accelerate or derail regulatory progress, especially when political parties are divided on the issue.

These factors underscore the growing challenges and widening gap in digital antitrust policies, which may result in more fragmented approaches across tech sectors rather than a full convergence on a single model. The challenge is to craft non-discriminatory yet justifiably targeted regulations that foster innovation, address domestic priorities, and minimize the risk of US retaliation. As the future of global antitrust regulation for digital platforms remains contested, middle powers are playing an increasingly crucial role in shaping the landscape. The coming years will test whether middle powers can develop a distinct regulatory path or will be compelled to follow the lead of larger players.