Europe has long been the first mover on significant tech policy, passing far-reaching laws in areas where Congress hasn't advanced past the hearing or markup stage, Ashley reports.

What's happening: With the hype around AI at a fever pitch, Europe is moving ahead with rules as it also implements the next phases of its landmark digital content and competition laws, the Digital Services Act and the Digital Markets Act.

Why it matters: In the U.S., tech companies have avoided major new legislation regarding content or the way they have to treat competitors, and are playing an active role in legislative frameworks for AI.

• But in Europe, the time to weigh in on proposals is close to being over, and compliance is a real, incoming hurdle.
• How companies will adapt to EU rules will show the rest of the world what they're capable of, even as they warn of the dangers of onerous laws.
• The time and expense that will be needed to comply are likely to make companies less open to strict or overlapping rules from the U.S.

Details: The EU AI Act, first introduced in April 2021, is in a part of the EU legislative process called "trilogue," a negotiation among members of the Parliament, Council and Commission.

• Major issues of disagreement that remain include how generative AI should be regulated, the definition of high-risk AI, AI use for biometric surveillance in public, and implementation and enforcement, per Dragoş Tudorache, a member of the European Parliament, speaking at an event hosted by Stanford University last month.

The Digital Markets Act, which governs competitive behavior and requires companies to change how they treat industry rivals, will apply "gatekeeper" status to Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Samsung because of market size and number of users.

• Companies have a chance to respond to those designations now. TikTok has said it meets the criteria, but disputes its inclusion on the list.
• If they are deemed to be official gatekeepers, they'll know by Sept. 6. From then, they've got six months to comply with the DMA.
• "The commission is currently consulting with the public on the compliance report templates and the description of consumer profiling techniques, two key pieces of gatekeepers' compliance requirement," Daniel Zhang, senior manager for policy initiatives at Stanford University's Institute for Human-Centered AI, told Axios.

The Digital Services Act, which governs algorithms, transparency, illegal content and access for researchers, designated its Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) in April.

• They are Alibaba; Amazon Store; Apple App Store; Booking.com; Facebook; Google Play, Maps, Shopping and Search; Instagram; LinkedIn; Pinterest; Snapchat; TikTok; X (formerly Twitter); Wikipedia; YouTube; Zalando; and Bing.

Zoom in: Amazon, for one, is fighting its DSA designation: "The DSA was designed to address systemic risks posed by very large companies with advertising as their primary revenue and that distribute speech and information," a spokesperson told Axios in a statement.

• "If the VLOP designation were to be applied to Amazon and not to other large retailers across the EU, Amazon would be unfairly singled out and forced to meet onerous administrative obligations that don't benefit EU consumers."
• Some U.S. lawmakers think the government should be doing more to fight back against "discriminatory" EU measures like the DMA and DSA, per a June letter to President Biden from dozens of members of Congress.
• "These policies, which almost exclusively target American companies, collectively impose sweeping new regulations, forced technology transfers, compliance costs, hefty taxes, and potentially significant penalties while giving homegrown European rivals a leg up," they write.

After the United Kingdom exited the European Union in 2020, it saw an opportunity on tech issues the EU has historically been aggressive on, like privacy, competition and digital content, Ashley writes.

What's happening: A couple of years post-Brexit, the U.K. is fashioning itself as a leader on technology policy in its own right as the U.S. moves sluggishly and the EU speeds ahead.

Yes, but: Many of these plans are in the beginning phases, and it will take time to see whether the U.K.'s attempts at tech rules will be successful or have a major impact on the global tech policy landscape, given the U.K.'s relatively small size.

What they're saying: "While the U.S. and EU lie further apart on the AI policy spectrum, the U.K. is seemingly carving out ground in between," Joseph Hoefer, vice president for government relations at tech-focused lobbying firm Monument Advocacy, told Axios.

• Industry has been gravitating toward London recently, Hoefer said: "It has somewhat positioned itself as the less volatile, more workable middle and potentially the frontrunner on how AI should be governed globally."

Details: In March, the U.K. government published an AI white paper with proposals for regulating the use of AI.

• It takes a much more hands-off approach than the EU, setting expectations for the development and use of AI and laying out how existing U.K. regulators can treat AI.
• In a similar approach to the U.S., the white paper advises regulators to put out their own guidance about use of AI for the businesses they have jurisdiction over.
• It lays out five principles in a framework, echoing the White House's Blueprint for an AI Bill of Rights: safety and security, transparency and explainability, fairness, accountability and governance, and contestability and redress.

Beyond AI, the U.K.'s competition regulator has played a major role in the fate of Microsoft's attempt to buy gaming giant Activision Blizzard.

• This spring, the U.K. announced a new Digital Markets Unit with the power to impose new rules and fines on Big Tech firms. The U.K.'s Data Protection Act of 2018 continues to be enforced.
• U.K. lawmakers are also finalizing an Online Safety Bill that would impose more content responsibility on online platforms and aim to protect children online.

What's next: The U.K. will hold a global summit on AI this fall with other G7 countries.

• "Our departure from the EU also allows us to act more quickly and agilely in response to this rapidly changing market," a release from the U.K. government about the summit reads.
• "It is clear that the U.K. wants to position itself as a key player in AI, especially with recent announcements of the global AI safety summit and the foundation model task force that also has an AI safety focus," Stanford's Zhang told Axios.

The U.S.' northern neighbor is going it alone on a number of tech policy fronts, bucking international cooperation, Ashley reports.

Driving the news: Canada released a note last week about its Digital Services Tax Act, set to go into effect as soon as January, which would impose a 3% tax on revenue for large tech companies and online marketplaces.

• That would include companies like Walmart, Amazon and Meta.
• Members of Congress have considered similar proposals, while the U.S. is helping lead an international strategy for digital tax.
• Meta also began blocking news in Canada this month in response to a law requiring tech companies to pay news outlets for content.

Why it matters: Canada's zagging is sure to complicate conversations among G7 nations about norms for tech policy, and cause headaches for companies with a presence in the country.

• In July, countries considering digital services taxes agreed to hold off applying them as an international deal is worked out, but Canada moved ahead on its own, per Reuters.

What they're saying: "The importance here of Canada moving forward is it's going to make it harder to get a lateral agreement, period," one tech industry insider told Axios. "It's breaking down one of the largest economic agreements we've ever seen."

• Canada's note "shows that Canada's DST is clearly discriminatory towards U.S. companies and will harm international efforts to come to a global consensus on issues of taxation in the digital economy," National Foreign Trade Council vice president for international tax policy Anne Gordon said in a statement.

The other side: Canada's deputy prime minister Chrystia Freeland said in a statement that Canada supports an international agreement but could not support an extended "standstill" of any multilateral agreement.

What to watch: Canada has also workshopped controversial policies on AI and data, online privacy protections and requirements for social media and streaming companies to carry a certain amount of Canadian content.

• Parliament is currently considering a package that would implement three new laws around data protection and privacy along with AI.