In the Trump-Europe trade wars, the battle so far has been focused on goods: Trump’s tariffs on German cars and French champagne have been met with tit-for-tat threats to boost levies on all-American booze and motor vehicles, from Kentucky bourbon to Harley Davidson motorcycles. Services, of the sort Netflix, Facebook, Google, Apple or X — not to mention Disney, Warner Bros. or Comcast — provide to hundreds of millions of European citizens, have been off the table.
But that could change as Trump ratchets up the pressure on Europe to negotiate new trade deals and Europe pushes back with threats of countermeasures that could hit Hollywood (and Silicon Valley) hard.
The European Union fired a shot across the bow on April 23, issuing a combined $800 million (€700 million) in fines against Apple and Meta for violations of its new antitrust legislation, the Digital Markets Act (DMA), which came into force in late 2023. The fines, which the companies are appealing, were actually lower than expected, and a fraction of the billions European courts have ordered Google to pay for abusing its market dominance — Europe’s court of justice in September ruled Google must pay a $2.7 billion (€2.4B) fine for violating E.U. antitrust law, and the company is facing a separate $4.9 billion (€4.3 billion) penalty, which Google is appealing.
There is more to come. European Union regulators are preparing major penalties against Elon Musk’s X, for breaking a landmark law, the Digital Services Act (DSA), regulating disinformation and hate speech online. The move, targeting one of Trump’s key advisors, is certain to further heighten tensions between Brussels and Washington.
“I don’t think it’s a coincidence that the European Commission has said they are looking to fine X right now,” says Rowan Wilkinson, an analyst specializing in digital society at international affairs think tank Chatham House in London. “I think that they’re trying to position themselves as willing to, retaliate as the rhetoric out of the U.S. administration is becoming more obviously anti-European.”
U.S. Vice President JD Vance took a decidedly anti-European stance in his Feb. 14 speech to the Munich Security Conference, where he framed the E.U.’s regulation of hate speech and disinformation online as a “threat from within” more dangerous than any menace emanating from Russia, or China. Musk has directly meddled in European politics, accusing UK Prime Minister Keir Starmer of being an ‘accomplice’ to child grooming gangs, and speaking via video link, at a party rally for the AfD, a German far-right, anti-immigrant party. Musk’s fellow broligarchs — Meta CEO Mark Zuckerberg, Amazon founder Jeff Bezos, Google CEO Sundar Pichai — have, since Trump’s inauguration, dropped any criticism of the President and are actively lobbying for Washington to fight EU regulation.
“Part of the agenda seems to be: We are going to break Europe’s liberal democracy,” says Johnny Ryan, director of Enforce, a digital rights advocacy group based in Dublin. “The big story is this assault on Europe’s liberal democracy. And Europe has a big problem because all of its media, all of the platforms for its media debate are controlled by American oligarchs who now report to the president.”
“For European regulators, looking at the current trajectory that big tech is on, it looks like it’s now or never,” to reign in U.S. tech overreach, says Wilkinson. “We’re at a real turning point where these [tech] companies are no longer pretending that they align with democratic values, and they are deciding consciously to sit on the other side, going directly against what the European Union stands for.”
Ursula von der Leyen, the European Commission president and Europe’s chief trade negotiator, has made it clear she’s ready to fight back, and to extend the battleground in the transatlantic trade war to services. On April 10, von der Leyen pulled out the big guns, saying the E.U. could deploy the anti-coercion instrument, or ACI, the so-called “trade bazooka.” The ACI is a mechanism, introduced to prevent foreign countries from using trade policy to interfere with European democracy, that gives the EU broad powers to retaliate against international companies, and could be used to restrict or block U.S. media companies access to European markets, including exploiting their IP rights here.
“Von der Leyen is staking out the most extreme position, showing how far the E.U. is willing to go,” says Ronan Murphy, head of tech policy at the Center for European Policy Analysis, a Washington-based think tank. “It’s sending a signal across the Atlantic to those at the White House and those [in the tech sector] who are advocating for change within Europe, that they have these weapons are are willing to use them, that they will defend themselves.”
Given the importance of the European market for U.S. media companies, the ACI is potentially a very big stick for the E.U. to wield in the transatlantic trade wars. While Trump likes to frame trade with the E.U. in terms of goods, where Europe has a large trade surplus — America bought about $176 billion more in goods from Europe in 2023 than Europe bought from the U.S. — with services, the direction of trade is mostly in the other director. Europe ran a $118 billion deficit with the U.S. on services in 2023, according to data from the European Commission.
If that trade is disrupted, U.S. media companies have a lot to lose. 2024 figures from the European Audiovisual Observatory, a data analysis group, found three American-owned companies — Netflix, Prime Video and Disney+ —accounted for 85 percent of viewing time on European streaming services (Netflix alone accounts for more than half). A majority of European box office receipts go to U.S. studio releases. Nearly a fourth of European private TV channels are owned by U.S.-based companies, primarily Warner Bros. Discovery, Paramount, and Comcast. For most U.S. media groups, Europe is the second-largest market, behind North America. According to their own figures, Meta generated $38 billion, close to a quarter of their total global revenue, in Europe last year. Netflix earned $12.4 billion in Europe last year, compared to $17.4 billion in North America. (Netflix’s European figures include the much smaller markets in the Middle East and Africa.)
“Europe has very strong levers, in the form of legislation, that allows it to do real damage, to really retaliate [against U.S. tech companies],” says Johnny Ryan, director of Enforce, a digital rights advocacy group based in Dublin. “It has this Damocles’ sword if it wants to drop it. It could detonate a bomb under big tech, to protect its own democracy.”
This story first appeared in the May 7 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.