The Information Technology and Innovation Foundation has published a detailed case for using Section 301 of the Trade Act of 1974 to investigate and potentially retaliate against the European Union's Digital Markets Act, calling it a "discriminatory, extractive regulatory regime aimed at America's biggest technology companies." The report, released June 10, 2026, argues that while the U.S. should favor negotiated solutions, the DMA's targeted impact on American tech firms gives Washington a strong legal basis to act if diplomatic efforts fail.

The numbers paint a stark picture of discrimination. Five of the seven designated "gatekeepers" under the DMA are U.S. firms—Alphabet, Amazon, Apple, Meta, and Microsoft—accounting for 21 of the 23 regulated core platform services. The report documents that annual DMA compliance costs for each American gatekeeper run approximately $200 million, with Meta alone spending over 590,000 working hours on compliance by March 2024 and Google assigning 3,000 full-time employees for two years to comply with just one provision. The EU has already imposed €700 million in fines on U.S. companies under the DMA—€500 million against Apple and €200 million against Meta. One study cited estimates the five American gatekeepers face annual revenue losses between $8.2 billion and $18.1 billion from the DMA's conduct requirements, with total revenue growth losses potentially reaching $500 billion to $800 billion in 2030 alone. The digital economy represents 10 to 18 percent of U.S. GDP, and in 2022 the United States exported over $191 billion in digitally deliverable services to the EU, resulting in a $104 billion trade surplus.

The report finds that the DMA meets Section 301's legal threshold for "unreasonable" and "discriminatory" practices that burden U.S. commerce. According to the authors, legislative history confirms the law's thresholds were intentionally set to target U.S. platforms—Andreas Schwab, the DMA's rapporteur, "expressly confirmed that the law should focus on 'the top five' companies rather than include any European firm just to 'appease the U.S.'" The report states that "high aggregate revenue and user thresholds, as well as fines based on global revenues, were set to target and penalize American tech multinationals while exempting smaller, more local European digital players that may enjoy dominant positions." The authors warn the DMA is spawning copycat regulations worldwide—the "Brussels Effect"—with similar laws enacted or proposed in the United Kingdom, Japan, South Korea, Australia, and Brazil, multiplying potential damage to U.S. firms.

The report's analysis centers on why Section 301 offers a better path than broad tariff wars. Unlike revenue-focused trade measures, Section 301 permits targeted retaliation designed to pressure trading partners into removing discriminatory practices through formal investigation, evidence-building, and stakeholder input. USTR General Counsel Jennifer Thornton is quoted saying Section 301's "goal is not revenue generation but really leverage." The authors argue this matters strategically because U.S. tech companies undergird America's competitive position against China—according to ITIF's Hamilton Index, "U.S. strength in IT services masks a real, structural weakness in advanced manufacturing." The report notes European dependence on American technology is profound: Europe relies on U.S. firms for roughly 90 percent of its cloud infrastructure, and in 2024 U.S. institutions produced 40 notable AI models compared to Europe's three. Yet European officials have declared the DMA a "settled legal reality" not open to negotiation, with Competition Commissioner Teresa Ribera stating it's not a "bargaining chip" and calling U.S. pressure "blackmail."

The report recommends the U.S. use the threat of Section 301 investigation as leverage for diplomatic negotiations, not as a trigger for trade war escalation, noting "the preferred outcome is a negotiated solution that preserves the broader U.S.-EU relationship while correcting the DMA's discriminatory effects." If Europe continues resisting substantive talks, the authors call for filing a formal petition to investigate the DMA's fines, restrictions, product redesign demands, data sharing obligations, and forced technology transfers. The bottom line: America's largest tech companies face discriminatory treatment that erodes both their global competitiveness and U.S. national power, and Washington has both the legal authority and strategic imperative to push back.