“Reciprocal” Digital Sovereignity

Tech regulation raises some of the thorniest questions of our time — about free speech versus hate speech, copyright versus fair use, truth versus manipulation. Yet these debates are increasingly irrelevant unless states can first establish digital sovereignty. Without the will to enforce laws on multinational corporations, “tech regulation” is a dead letter.

Both the EU and the Commonwealth countries have been trying to use regulation to chart a third path between the “laissez faire” of the US and the explicit state control of authoritarian regimes like China. But the shakedowns occasioned by Trump’s unilateral “reciprocal” tariffs demonstrates the pointlessness of these laws without the will to enforce them.

The Canadians were forced to give up a Digital Services Tax. Earlier and somehow still ongoing negotiations with the UK involve a similar tax. EU negotiations may hinge on the enforcement of the Digital Markets Act. In all cases, trade with the US increasingly requires the trading partner to cede their digital sovereignty. The federal US government even tried to impose this standard on states, with a clause banning them from regulating AI in Trump’s recent omnibus bill. The removal of the clause seems to have been driven by pushback from Republican state governors.

There is growing evidence of an outright alliance between Big Tech and the American federal government. The connection between the millions donated by tech titans to Trump’s inauguration and the current tariff favoritism might seem like a standard instance of protectionist lobbying. “Laiseez faire” is a myth; this is crony capitalism. But what makes this case unique is the ability of these tech companies to directly influence political outcomes, both domestically and abroad.

Foreign tech regulation seeks to limit this influence (or at least to skim a bit off the top), but the US state appears to be following China’s lead in attempting to wield platform influence. The digital sword of Damocles hangs over every democratic election; as long as the California-ideological veneer of free speech lasted, we could be deluded into thinking that social media was a value-neutral vector of communication. The explicit rightward turn towards state power by Silicon Valley makes this illusion untenable. Tech companies should be considered as part of the military-industrial complex — not just Palantir, but all of the consumer-facing ones as well.

The plan to roll out American power through the internet began in the 90s, in what I have called the Palo Alto Consensus. Ideologically, the internet seemed to be the antidote to authoritarianism, and the democracy-spreading mission of neoliberalism sought to make the internet economically essential and thus to undermine the information control sustaining authoritarian regimes. As the internet developed, it became clear that “free speech” means something very different online, and that we have largely replaced the information control of governments with that of platforms. The latter control is far subtler, less totalitarian — but still sufficient to cripple democratic institutions.

The American state has embraced the use of hard power against allies in a way that once seemed unthinkable. It is no longer possible to ignore the risk of anti-democratic action by American Big Tech as part of state-aligned business strategy. Many observers are rightly leery of the proliferation of Huawei hardware and Bytedance software as a potential vector for state influence; we should think of OpenAI, Meta and Google in the same way. X, a clown car hijacked by a madman, should be straightforwardly banned while there appears to be some daylight between Musk and Trump. Instead, the FT recently reported that “the European Commission has stalled one of its investigations into Elon Musk’s X for breaking the bloc’s digital transparency rules, while it seeks to conclude trade talks with the US.”

Perhaps these countries will emerge from “Liberation Day” with their digital sovereignty intact; enforcement of existing tech regulation must be strengthened if so. But the longer term solution will require the development of domestic platforms that will be more amenable to democratic oversight. Europe must now do for its digital future what it began doing for its environmental one: build local capacity, enforce its rules, and cultivate the collective awareness that the status quo is intolerable.