As U.S. policies continue to evolve under U.S. President Donald Trump, changes in the EU-U.S. digital relationship are likely.
The EU is exploring a softened approach to digital regulation that aligns with U.S. calls for deregulation to support digital innovation. What remains unclear is how the two sides will find common ground to maintain EU-U.S. Data Privacy Framework after U.S. changes potentially impacting independent and impartial reviews of EU individuals' signals intelligence complaints.
European Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection Michael McGrath said during a recent Center for Strategic and International Studies webinar that the Commission is "committed" to continuing the agreement. His comments came as data protection authorities in Denmark, Norway and Sweden provided recent guidance on the EU-U.S. data transfers in light of U.S. political developments.
"It is an objective of the European Union to continue with full implementation and enforcement of the Data Privacy Framework," McGrath said.
Staying the course
The European Commission and the U.S. government agreed to the DPF and subsequent adequacy status in July 2023. For the U.S.'s part, the framework addressed EU consumer redress and determinations of necessity and proportionality associated with U.S. national security checks.
U.S. signals intelligence reviews and potential redress hinged on independence, which is now in question with the dismissal of Privacy and Civil Liberties Oversight Board Democrats and departures from Data Protection Review Court.
McGrath said the EU will continue to monitor the U.S. developments and any DPF complications that may arise. However, he insisted maintaining the transfer agreement remains an obvious goal for the EU and the U.S.
"It is my expectation, because of the mutual benefits that it provides for European companies, for American companies, that there is a willingness on both sides of the Atlantic to continue with this," McGrath said, noting the framework generates more than USD1 trillion annually with its facilitation of trade and investments.
McGrath indicated a recent productive 13 March meeting with U.S. Federal Trade Commission Chair Andrew Ferguson, who reassured McGrath of his support for the DPF.
The future of EU regulation and enforcement
The EU was recently criticized by U.S. Vice President JD Vance for the stringency of its digital rulebook. At France's AI Action Summit in February, Vance said the world has the "extraordinary prospect of a new industrial revolution" through the digital economy, but the opportunity won't be seized "if over-regulation deters innovators from taking the necessary risks."
Vance specifically called out the EU General Data Protection Regulation and the Digital Services Act among the existing deterrents. And European Commission President Ursula von der Leyen used her summit remarks to acknowledge parts of Vance's callouts, noting the EU has to "make it easier" and the bloc must "cut red tape."
The EU has since committed itself to slowing down on additional digital regulations, as it abandoned proposals for the AI Liability Directive and the ePrivacy Regulation.
It was unclear if current regulations would see changes, but McGrath indicated the Commission is exploring modifications. More specifically, he said the GDPR's application to small and medium-sized businesses will soon be considered.
"GDPR will feature in a future omnibus package, particularly around the record keeping for SMEs and other small and medium-sized organizations with less than 500 people," McGrath said. "So we will be examining what ways in which we can ease the burden on smaller organizations in relation to the retention of records while at the same time preserving the underlying core objective of our GDPR regime."
What will not be changing is the Commission's approach to enforcement, particularly actions under the Digital Markets Act.
The DMA designated many U.S. companies, including Apple, Google and Meta, as gatekeepers, which is now drawing criticism from the White House. A February memorandum indicated the White House would impose tariffs on countries that place digital taxes on U.S. companies or fine them for antitrust issues.
The Commission's enforcement is "blind to the origin or nationality of a company," according to McGrath. "It is our digital rulebook, and in the same way that a U.S. administration would expect European companies training within the United States to comply with the rules here, the same applies with the European Union."
The policy differences are becoming more stark, but McGrath sees the U.S. and the European Union facing many of the same consumer protection challenges. That alone makes an ongoing partnership mutually beneficial to EU and U.S. markets.
"Let's engage, let's have dialogue and let's respect each other. And when there are differences, let's seek to iron them out around the table," McGrath said.
Lexie White is a staff writer for the IAPP.
