EU crackdown on big tech companies is leading to a transfer of power to China, US Congress members say

In a letter to Biden, lawmakers argue that EU legislation unfairly targets U.S. companies while ignoring competitors from China and Europe. Photo: EVELYN HOCKSTEIN/REUTERS

U.S. policymakers say the European Union's crackdown on tech companies is not aimed at Chinese tech giants while they unfairly scrutinize Silicon Valley rivals.

Lawmakers said concerns in a letter to Joe Biden as they called on the president to push back against EU monitors to protect US interests.

The European Commission has designated Apple, Amazon, Google, Meta and Microsoft as so-called digital gatekeepers under the bloc's Digital Markets Act, meaning they will be forced to follow strict new competition rules.

However, a letter from a group of 21 House members argues that EU legislation unfairly targets US companies while ignoring competitors from China and Europe.

They said: “Designation of leading US companies as gatekeepers threaten upend the U.S. economy, diminish our global digital leadership, and jeopardize consumer safety.»

Lawmakers accused the EU of introducing “a more favorable set of rules for European countries.” and other foreign firms, including Russian and Chinese firms.”

Congressmen have questioned why Chinese tech giants such as Amazon rival Alibaba, telecoms company Huawei and games maker Tencent are exempt from the rules.

EU rules stipulate that a gatekeeper must have more than 45 million active users within the bloc to be subject to the regime.

The congressmen added: «The EU has inexplicably failed to designate any European retailers, content sharing platforms, payment companies and telecommunications companies.»

New rules set by Brussels and coming into force in March as part of the Act on digital markets could lead to billions of euros in fines for tech companies.

Under the legislation, companies will be prohibited from sharing data between different platforms and will not be able to provide favorable coverage of their products in online search results.

A European Commission spokesman declined to comment. on the letter.

The letter comes after Google agreed on Monday to pay $700 million (£550 million) over claims its Play Store stifles competition and overcharges consumers.

p>The tech giant struck a deal with 50 US states after they brought legal proceedings in the case on behalf of more than 100 million people.

As part of the settlement, Google will pay $630 million to a consumer relief fund, and the remaining $70 million will be divided among the 50 states.

Developers of apps downloaded through Play. Stores on Android devices typically have to give Google 30% of the money they receive from consumers, which in turn results in higher fees for smartphone users.

These fees have led app developers to file lawsuits against Apple and Google, which develop software for the iPhone and Android smartphones, respectively.

Phil Weiser, Colorado's attorney general, said: “We brought this lawsuit because using monopoly power to raise prices and limit consumer choice is illegal.”

Wilson White, Google's vice president of government affairs, said: “We are pleased to resolve our case with with the help of the states and move forward with the settlement.”