Friends reunited? How the US and EU spent the year reconnecting on tech

With a new president, tougher federal regulation of big tech and a desire to draw allies closer in a challenge to China, 2021 was supposed to be the year that the US hit reset on its frosty relationship with Europe.

From the outside, US and European citizens alike have plenty to gain from better cooperation between their respective governments. Better trade agreements mean digital technologies will be more widely available, and more common ground on competition policy has the potential to give consumers a better choice of digital services. Then there's the promise of renewed data and privacy agreements, which will allow data to flow more efficiently across the Atlantic. That may benefit not only consumer services, but also medical research and providing better protections for internet users everywhere.

Eleven months later, not everything the economic superpowers hoped for has come to pass, but there have arguably been some major breakthroughs -- the formation of a new tech council, for one. The US has also been making efforts to claw back credibility following four years of failing to coordinate during the Trump era and delays in agreeing on effective domestic tech policy, which Europe has responded to well.

Bart Gordon, a former congressman and chair of the House Science and Tech Committee, now serves as a director of the Trans-Atlantic Business Council. He said he's seen goodwill on both sides to find common ground throughout 2021. 

"There's been a sea change," he said. "In the previous administration, President Trump was looking for reasons to try to pick a fight, whereas in this administration, they're looking for reasons to try to work together."

New year, new US attitude to diplomacy

2021 certainly got off to an optimistic start. Following Joe Biden's election victory, there was a real excitement in Brussels and other European capitals, said Tyson Barker, head of technology and global affairs at the German Council on Foreign Relations. "They wanted to take advantage of this opportunity to grab this administration as a like-minded partner in tech leadership," he said.

Meanwhile, the US knew it had to make amends if it wanted to get its relationship with the EU back on track. Donald Trump, Biden's predecessor, had made no secret of his disdain of Europe's attempts to bring US tech companies to heel. "They were inheriting four years of real tension with the European Union," Justin Sherman, a fellow at the Atlantic Council, said about the Biden administration. 

Europe is also worried that Trump may run for president again in 2024, added Gordon, meaning that the two powers need to make the most of the next three years in developing confidence in one another. "There is a burden on the United States to really reach out and try to build some of those bridges back," he said.

That's why it was unsurprising when the US extended an olive branch by immediately appointing a lead negotiator to work on reestablishing data flows between the US and EU. This followed a ruling by the EU's top court in 2020 that invalidated Privacy Shield -- the mechanism used to transfer data between the two regions -- due to surveillance fears.

Then in June, the EU and US formed the Trade and Technology Council, or TTC, which will attempt to find common ground on key tech policy issues. And in October, discussions led by the Organisation for Economic Co-operation and Development finally resulted in a long-overdue international agreement that will see big tech companies pay fairer shares of tax in countries around the world.

These were important milestones but don't tell the full story. Even post-Trump, the US isn't enamored of Europe's tech rules, which have left Biden and his team on the back foot coming into discussions. 

There has been a convergence in perspectives between the US and Europe, said Barker, "but it's convergence on terms that have actually been more set in Europe." Europe has repeatedly said it seeks "alignment" with the US on tech rules, but it's unlikely to budge much given how well established the bloc's policies are on tech.

Where Europe leads, will the US follow?

The last time a US administration attempted to work with allies on tech policy was during the Obama era, but it was a very different time for tech. The relationship between government and big tech was on good terms, and the tide had not yet turned to suggest that tech was anything other than a force for good. But during Trump's turn at the helm, the US relationship with Europe soured and the scourge of disinformation and fallout from the Cambridge Analytica scandal sparked suspicion and scrutiny of tech giants.

It's not as though time stood still in Europe during this era. In fact, this period saw major advances in Europe putting rules in place for regulating tech giants and handing out multibillion-dollar antitrust fines to big tech companies. In 2018, Europe's General Data Protection Regulation, a landmark overhaul of the bloc's privacy laws commonly known as GDPR , came into effect. It was part of a decade-long overhaul of digital rules. 

The EU moved even faster in 2021, publishing draft regulation for AI and making major progress on two pieces of legislation , the Digital Markets Act (designed to tackle anti-competitive practices in tech) and the Digital Services Act (which focuses on moderation and illegal content). Both have been years in making.

"The sophistication of Europe's approach has been driven by a decade-plus of debate," Barker said. "Europe says, 'It's great that you guys are here, it's great that there's been convergence on so many areas of tech regulation... but we can't wait.'"

This urgency was further exacerbated by the Jan. 6 attack on the Capitol, a violent act that resulted in five deaths. It spurred countries around the world to more urgently tackle the virality of disinformation and other incendiary content, Barker added. It also cemented the idea among European leaders that regulation holding tech platforms to account was overdue.

The progress that Europe has made over the past four to five years is making it harder for the US to take a leadership role in discussions. And it hasn't helped that Biden's attempt to take the lead on digital policymaking was scuppered earlier this month when the US was forced to postpone the launch of the Alliance for the Future of the Internet following pushback from digital rights groups. The proposal was an attempt to rally a coalition of democracies around shared principles for an open web.

Same room, same page? Not so fast

Joint efforts to bring countries together have been more successful. The first meeting of the TTC went ahead in Pittsburgh in September, with the second slated to take place in Europe in April. 

But gathering people together in one room is just one step. Getting them to see eye to eye is another. "There's still a lot of roadblocks that the US and the EU keep hitting when they try and actually get to agreement," Barker said.

One such roadblock is a differing stance on privacy. Earlier this year, the US trade representative put out a statement naming GDPR as a trade barrier and arguing that it exerts too much control over tech companies. But, in spite of niggles over some mechanisms of GDPR, the legislation is fast approaching its fourth birthday and won't be going away anytime soon.

Sherman said the US is losing out by not having its own comprehensive federal privacy law. Not only is that absence a national security threat, but it hurts consumers and puts the US at a competitive disadvantage as countries around the world, China included, bolster their own privacy safeguards.

The EU wants the US to mirror the privacy protections of GDPR so it can confidently allow the data of European citizens to safely flow across borders. That's unlikely to happen, but a compromise is entirely possible, Sherman said. "It's realistic to say that we should be able to have stronger privacy rules that aren't a copy of GDPR but that boost privacy protections in a way the EU can better work with."

The EU also is hoping to get the US on the same page regarding antitrust. It's been pushing for the US to adopt common terminology for competition cases -- agreeing to use the word "gatekeeper" to describe big tech companies, for example. This is something to watch out for next year, said Barker, as it would mark "a major shift in antitrust philosophy in the United States."

Home and away

In both the US and Europe, there are two very separate conversations happening around tech -- one playing out on home turf and the other taking place on the international stage. Ideally, the latter would reflect the former, but in reality there's often a potentially harmful disconnect between what's going on in the two spheres.

Sherman pointed to an example, namely that the Biden administration's progress in repairing its relationship with Europe may be undermined by Congress' failure to get its act together on privacy, antitrust enforcement and other issues.

Even within the White House there's a "plurality of views on a lot of tech questions" that are rarely represented in the country's engagement with the EU, Barker said. There are areas where the administration could intervene, such as stopping law enforcement from buying citizen data or preventing the use of facial recognition algorithms known to be racist and sexist.

"In practice, the US is losing a lot of ground and credibility by trying to keep leading on technology when there are massive technology abuses domestically," Sherman said. The country's goal of being a global advocate for democratic technology is admirable, he added, but "we need to get our own house in order to do that more effectively."

This plurality of views is hardly unique to the US. Despite the EU's progress on new regulations, individual EU member states often take very different views on tech issues and sometimes will get very involved and disagree with one another. Key figures within the EU also occasionally butt heads. Tensions between European Commissioner for the Internal Market Thierry Breton and Competition Commissioner Margrethe Vestager, who have been working on the DSA and DMA, have been well documented.

These domestic disputes may even take longer to resolve than the high-level discussions happening internationally. Even as domestic privacy legislation discussions rumble on in the US, Gordon believes it wants to come to harmony over Privacy Shield and he's hopeful of an announcement soon.

Given that, domestically, Europe and the US are grappling with many similar issues, there's no reason there shouldn't be even more coordination than we're seeing already, Gordon added. "Quite frankly, I would like to see more discussion between the European Parliament and the United States Congress," he said.

Looking ahead

Just like the dysfunctional family gatherings many of us will attend this holiday season, the US and the EU have brought baggage and differing perspectives as they try to work on key issues. But ultimately, their historic loyalty to one another and desire to get along will likely see them through.

They do have shared interests -- finding common ground on relations with China, for example.

They both have concerns about the economic growth in the Chinese tech sector, the Chinese government's technological reach and its influence over digital rights. The US would be wise not to frame its entire tech agenda around China, Sherman said. It reinforces the idea that US tech policy is purely reactive, rather than proactive. But having a common rival undoubtedly brings Europe and the US together. 

There's plenty of hope among onlookers that 2022 could yield more tangible results than 2021, which has largely involved lots of planning and agenda swapping. Even at the end of the year, things are changing fast. Just last week, Vestager was in Washington meeting with Commerce Secretary Gina Raimondo and Trade Representative Katherine Tai, which Gordon says should help "jumpstart" a better effort in the US to get organized. 

"There is also a real will to try to have some low-hanging-fruit, quick victories, and I think we'll see that hopefully earlier next year, just to demonstrate goodwill on both sides," he said.