Digital Sovereignty in Tension: U.S. Pushback Against the EU’s Digital Services Act

As Europe tightens its grip with the Digital Services Act, U.S. tech giants find themselves caught in a transatlantic tug-of-war over data, power, and digital sovereignty.

Introduction

On August 21, 2025, the U.S. Federal Trade Commission (FTC) issued a stern warning to major tech firms—including Google, Meta, Amazon, Microsoft, and Apple—not to comply with the European Union’s Digital Services Act (DSA) if it compromises American values like free speech or encryption integrity. FTC Chair Andrew Ferguson cited First Amendment concerns and Section 5 of the FTC Act, asserting U.S. law should prevail in cases of regulatory conflict.

1. DSA vs. U.S. Constitutional Norms

The DSA, enforced across the EU, mandates proactive content moderation and transparency for digital platforms, especially Very Large Online Platforms (VLOPs) like YouTube, TikTok, and X  . Unlike the U.S., where platforms benefit from broad legal immunity—under Section 230—the DSA imposes far-reaching obligations on removing illegal content, responding to user complaints, and avoiding systemic risks.

Meanwhile, U.S. regulators—led by the FTC and supported by FCC Chair Brendan Carr—have raised alarms that DSA compliance could undermine U.S. constitutional rights such as free speech and data privacy. This legal friction reflects a broader ideological divergence between EU’s duties-driven regulation and the U.S.’s emphasis on individual liberties and due process.

2. Global Implications and Geo-Strategic Risks

America’s resistance to the DSA extends beyond regulation—political backlash is mounting. The Trump administration is considering sanctions and export restrictions targeting EU officials responsible for DSA enforcement. In response, EU officials such as competition chief Teresa Ribera have urged Brussels to stand firm and not yield to external pressures.

This standoff is symptomatic of a larger trend: the Brussels Effect, where EU laws, by virtue of their market power and enforcement framework, influence global corporate practices—even in places where they’re not legally binding. U.S. firms, caught between conflicting legal regimes, may be forced to adopt one-size-fits-all moderation policies that misalign with American legal norms.

3. Policy Recommendations

To reconcile regulatory divergence and safeguard both values and innovation, the Cyber Institute should advocate for:

• Transatlantic Regulatory Dialogues: Establish forums where U.S. and EU regulators collaborate, compare policy goals, and align expectations around encryption, moderation, and platform accountability.

  
  

• Regulatory Safe Harbors for Platforms: Encourage frameworks allowing tech companies to meet baseline global standards while preserving constitutional protections—e.g., geofenced content moderation or adherence to U.S.-specific content rules where required.

  
  

• Impact Assessments & Transparency Reporting: Promote mandatory transparency regarding how platforms manage dual regulatory demands—especially how they navigate EU vs. U.S. norms.

Conclusion

As global digital governance enters a new era, the clash over the DSA illustrates the fragility of regulatory harmony between the world’s two largest tech jurisdictions. Now more than ever, digital sovereignty and innovation require collaborative and adaptive governance models. The Cyber Institute is well placed to convene policymakers, industry leaders, and civil society to create paths forward that protect rights, foster trust, and enable digital resilience.