MNI: EU To Dilute Digital Act Despite Tough Words-Officials

The European Commission is likely to continue with its strategy of trying to calm U.S. concerns over the Digital Markets and Digital Services Act, despite vocal calls for a tougher approach from Commission Executive Vice President Teresa Ribera, officials told MNI.

Ribera’s comments this week accusing the U.S. of “blackmail” by saying that it would not lower tariffs on steel and aluminium unless the EU eased the implementation of its digital rules have irritated some of her colleagues, with officials telling MNI that they were a distraction from Commission President Ursula Von der Leyen’s default approach of appeasing Washington by soft-pedalling enforcement.

Ribera's comments were aimed at shoring up her support base within the Socialist bloc in the European Parliament, one official said, adding that the EU’s move to simplify the digital rules should hopefully ease a lot of concerns over the regulation, which seeks to limit illegal online speech and which U.S. tech firms say amounts to censorship with potential fines of up to 6% of annual global turnover.

"The EU should aim for a halfway house,” the source said, suggesting that the Commission could offer to cut fines under the regulation by perhaps 30%. However, the U.S. could insist that already-ongoing investigations under the Act, such as into TikTok and Meta, are dropped, he noted. "If the U.S. digs in and wants actual cases dropped then we'll see. The situation is not very good at the moment." 

Ribera and her French ally Vice President for Industry Stephane Sejourne, a strong advocate for EU strategic autonomy, are part of a minority on the issue within the Commission, but the Socialists to which the Spaniard has strong links are a significant force in the parliament.

"You should actually do some diplomacy here and avoid resort to the megaphone,” said another EU source who was critical of Ribera. (See MNI: Rare Earths Deadlock As EU Elevates China Economic Risk )

TRADE DEAL IMPLEMENTATION

Meanwhile, the European Parliament is broadly on track to finalise legislation next month implementing the EU-U.S. trade deal, paving the way for zero EU tariffs on US exports, officials said.

"The parliament is facing huge pressure from EU industry to get it done," the source said. 

EU industry is also keen to see promised safeguard measures put in place to protect against “serious injury” should tariff adjustments result in damaging import surges.

Washington is refusing to discuss any exemptions for EU goods like wines, spirits and pasta until the EU has implemented zero tariffs on U.S. exports to the bloc. One official said he does not see the U.S. entering into further negotiations on tariff reductions on steel either until zero tariffs on U.S. goods are actually applied. 

EU Trade Commissioner Maros Sefcovic said earlier this week that a team of EU negotiators would head to the U.S. in the coming weeks to take forward a "number of work streams".