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Illustration: Rae Cook/Axios

Tech giants are facing increasingly hostile foreign governments that are taxing their profits, attempting to halt their acquisitions, labeling them as monopolies and passing laws to limit their powers.

Why it matters: Big Tech's international policy challenges mean companies are positioning themselves for regulatory fights overseas while the U.S. is still struggling to figure out what it wants to do.

  • "There is a sort of a tricky issue where we don't have a consensus at home of what we want to see, and at the same time, we're seeing other markets really race ahead," especially in the European Union, said Steven Feldstein, a fellow at the Carnegie Endowment for International Peace.
  • "I've been trying to understand why the European Union is taking such an apparently bold and innovative approach to this subject and we are so slow to respond," said Sen. Dick Durbin (D-Ill.) at a hearing on algorithms Tuesday.

Driving the news: International antitrust enforcers have been trying to rein in American tech giants, taking actions against Amazon, Google and Apple. Various countries are passing new laws about content and moderation practices, and in some cases walling off their own internet access.

  • The Biden administration has said the U.S. needs to act. "We’re going to bring our friends and partners together to shape behavior around emerging technologies and establish guardrails against misuse," Secretary of State Anthony Blinken said in March.
  • U.S. Trade Representative Katherine Tai recently cited foreign digital policies that impact U.S. companies as a major barrier to trade in 2021.

The details: The biggest issues facing U.S. tech companies abroad, restricting both trade and free flow of content, include:

  • Taxes: Individual countries are imposing taxes on U.S. companies, such as France, while a global solution is worked out at the OECD. Meanwhile, some U.S. states are getting ideas from Europe.
  • Consumer privacy: The EU's data privacy law, the General Data Protection Regulation (GDPR), went into effect almost three years ago, while the U.S. still doesn't have its own. U.S. states have taken the lead. Meanwhile, U.S. companies are subject to GDPR rules.
  • Antitrust: While cases slowly advance in the U.S., Europe is forging ahead with its own investigations and introduced the Digital Markets Act. It would define American companies as "gatekeepers," or services that are vital for businesses to reach customers and act as bottlenecks.
  • Content moderation: Europe has proposed the Digital Services Act, which focuses on content moderation and taking posts down, while U.S. lawmakers and agencies grapple with the future of Section 230 of the Communications Decency Act, which largely shields tech companies from liability for what users post.
  • Artificial intelligence: The EU just introduced a sweeping proposal for how AI should be governed, and experts say the U.S. must now work with the EU on a regulatory framework before non-democratic countries take the lead.

What they're saying: "When the United States is acting as if it is the democratic force for how to regulate technology to counter techno-authoritarianism, that's kind of a ridiculous statement when there's very little technology regulation and there's no federal privacy law," Justin Sherman, a fellow at the Atlantic Council, told Axios.

  • China and India's moves to cut off access to U.S. companies and balkanize their Internet entirely are especially troublesome, experts warn, underscoring the need for the EU and U.S. to cooperate.

Leaders of major U.S. tech companies have been warning about the consequences of this fragmented approach to tech policy across the world and asking the U.S. to step up.

  • "It's the multiplication of divergent, often inconsistent national policies that makes it become very challenging to operate global platforms in a world of increasing fragmentation from a regulatory perspective," Google's Karan Bhatia, head of global policy, said in an interview.
  • "The EU and the US really need to try and get their act together, and I think the Biden administration, thankfully, is making real overtures to the EU to try and find common cause on some of the new regulatory ideas that the EU have put forward," Facebook's Nick Clegg said at an MIT event last week.

What to watch: Whether the Biden administration makes strong moves to work with other democratic countries on tech policy regulation to stave off moves by China and India — and whether the future of tech policy in the U.S. becomes any more clear.

Go deeper

Congress drags algorithms out of the shadows

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Tech platforms have built the heart of their businesses around secretive computer algorithms, and lawmakers and regulators now want to know just what's inside those black boxes.

Why it matters: Algorithms, formulas for computer-based decision making, are responsible for what we get shown on Facebook, Twitter and YouTube — and, increasingly, for choices companies make about who gets a loan or parole or a spot at a college.

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Big Tech had a record 2020. The party might not be over.

What's new: Alphabet just reported record first-quarter sales.

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Internet industry braces for new privacy rules

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The days of unwieldy internet user tracking by advertisers are coming to an end, sending the web's largest publishers scrambling.

Why it matters: The new online privacy changes are a massive pivot from the decades-long practice of selling hyper-targeted ads to users based on their web history. Many big web publishers rely on targeted ads to support their businesses.