The EU’s tech crackdown can’t hide the failure of Europe’s economic model

This article was first published in The Telegraph.

If you can’t beat them, prosecute them. This is the European Union’s mantra when it comes to tech regulation. While the EU has pursued regulatory protectionism in many sectors for decades, this has stepped into overdrive when it comes to the tech sector. With a debate raging around whether Britain should realign with or even rejoin the EU, it is worth looking at how this institution actually behaves today.

The EU has implemented a range of policies designed to limit the market dominance of American tech companies in Europe. It is supporting the development of home-grown alternatives and generating additional tax and regulatory revenue from US tech giants. Whether it was General Data Protection Regulation (GDPR), anti-trust and speech laws like the Digital Services Act, or the AI Act’s governance of frontier technologies, the results have all been poor.

Investment in innovation in Europe has declined. The services available to European users have got worse. GDPR has raised the cost and risk of data protection so much that it has strengthened the market position of US tech firms, as smaller businesses baulk at the costs of compliance and exit the digital market.

So what has the EU decided to do next? It is reaching for more active prosecutions against tech companies it doesn’t like.

But since the pandemic, and certainly since 2024, the EU has taken a more civilisational approach to tech regulation, arguing that censorship, anti-trust enforcement, and banning certain products from the market are essential for the protection of “European values”.

The most prominent example of this has been how the EU and some member states have turned their guns on Elon Musk’s X. In 2024, Thierry Breton, then-EU commissioner for the internal market, threatened to take X offline in Europe entirely. He published an open letter suggesting that it may be sanctioned if “potentially harmful content was amplified” in Musk’s live interview with Donald Trump.

X was issued with massive fines over alleged transparency violations in the way its blue-tick verification system operates. These prosecutions look suspiciously like thinly disguised attempts to control political discussion that the EU does not like. Breton’s intervention ultimately failed. He resigned from the EU commission in September 2024.

However, in 2025, France opened investigations into X and Grok, its AI tool, with a particular focus on how its algorithms worked and whether they were promoting harmful content on the platform. We should be wary of these types of investigations which seem to be fishing for evidence to fit a pre-determined crime committed by a political enemy.

In February, French authorities raided X’s offices in Paris as part of a criminal investigation. But the US department of justice argued it was “politically charged” and was being used to pressure or regulate X’s business activities through criminal prosecution rather than through ordinary regulation.

Stern rhetoric, but understandable considering the political context of this action. While French officials have spoken about the need to protect children from online harms and the importance of data protection, these are retrospective legal justifications for an investigation which is fundamentally political in nature.

It is easy to draw parallels between scrutiny of X and the legal pressures faced by the Right-wing National Rally (RN) whose offices were raided last year. In both cases, X and Jordan Bardella, president of the RN, are threatening the political establishment and have attracted the ire of French and European prosecutors. This has grave implications for the rule of law and sends a chilling message to anyone who wants to challenge the status quo.

This is the regrettable approach many European countries have taken to online regulation. Unfortunately Britain is now following a similar path, with the Online Safety Act 2023 allowing criminal action against tech executives for content posted by users on their platforms.

The Prime Minister threatened to remove X from the internet in the UK unless stronger safeguards were imposed on Grok’s image-generation capabilities. Even so, and notwithstanding new proposals to ban children from social media, Britain has not pursued the same level of regulatory intervention as some European countries across the Channel.

Content moderation should not be a matter of criminal law, especially when it comes to the regulation of social media platforms, which are not publishers but are forums in which individuals from all over the world can engage in discussion.

While Europe tries to find ways to wean itself off its reliance on US tech giants, it should ask itself a few questions. First: what services do tech companies offer which European citizens enjoy using, and should they be prevented from doing so? For example, EU digital regulations have reduced the integration of services such as Google Maps and Google Flights creating a less seamless experience for many users.

Second: why are investors and entrepreneurs wary about building their own tech companies in Europe and wrestling with EU regulations? The EU’s economic model is failing. Mario Draghi, former European Central Bank president wrote a damning report on the EU’s economic competitiveness in 2024, warning that regulatory burdens were contributing to the relocation of businesses away from Europe. To date, the EU has done little to change course.

Third, in a world where concerns about political censorship have become a major point of diplomatic tension, with the US showing a renewed emphasis on defending values such as freedom of expression in allied countries not seen since the Cold War, is the online suppression of contentious or controversial speech worth the political risk?

These questions cut to the heart of the issue: consumer welfare, economic competitiveness and civilisational vitality. This should be a warning to anyone in Britain about the reality of the EU in 2026. One hopes the bloc might wake itself from its regulatory slumber and embrace innovation, free speech and the rule of law, but that seems a long way off.