The Lawfare Podcast – Scaling Laws: Contrasting and Conflicting Efforts to Regulate Big Tech: EU v. U.S.

Release Date: September 5, 2025
Host: Kevin Frazier (AI Innovation and Law Fellow, University of Texas School of Law; Senior Editor at Lawfare)
Guests:

• Anu Bradford (Professor, Columbia Law School; author of "The Brussels Effect")
• Kate Klonick (Associate Professor, St. John’s University School of Law; Senior Editor at Lawfare)

Episode Overview

This episode explores the increasingly divergent regulatory approaches to Big Tech and artificial intelligence (AI) in the EU and the U.S., focusing on the so-called ‘Brussels Effect’—the EU’s outsize influence on global tech policy—and the rising policy tensions under a second Trump administration. The discussion covers the extraterritorial impact of EU digital laws on U.S. firms, the shifting rhetoric and policy moves in Washington, the emergence of ‘digital sovereignty’ as a guiding principle on both continents, and the growing role of China in shaping the global tech landscape.

Key Discussion Points and Insights

1. The Differing Regulatory Philosophies of the EU and U.S.

(02:20–05:47)

• Both the EU and U.S. claim to want AI leadership, but define and pursue “leadership” in fundamentally different ways.
• EU’s approach: Values-based, rights-focused regulation (e.g., AI Act, Digital Services Act, Digital Markets Act).
• U.S. approach: Market-driven with more focus on innovation and less on blanket regulation. Under the Trump administration, there's a clear preference for protecting domestic industry and opposing what is seen as hostile European regulation.

Quote:
"AI only works if society lets it work.” – Alan Rosenstein [02:32]

2. U.S. Political Response to EU Regulation and Protectionism

(05:47–09:20)

• President Trump’s incendiary rhetoric frames EU tech regulations as “discriminatory” attacks on American companies, threatening tariffs and even linking digital regulation to security cooperation (e.g., NATO support).
• The underlying U.S. stance is that European rules are designed to “harm or discriminate” against American tech firms.

Quote:
"President Trump made very clear... the Europeans should back off and respect the American regulatory sovereignty… he has threatened the Europeans with his favorite weapon, which is tariffs.” – Anu Bradford [05:47]

3. The ‘Brussels Effect’ in the AI Age

(09:20–13:30)

• The “Brussels Effect” refers to the EU’s ability to set de facto global standards, as firms harmonize their products to comply with Europe’s stringent laws.
• For AI, EU’s market clout and early regulation mean U.S. companies often must comply with EU standards globally for reasons of scale, regulatory preemption, and consumer trust.

Quote:
"AI doesn’t respect the national borders... The US companies that are willing to stay active in the European market are bound by those rules, but then they face this question: whether they actually want to make those changes globally." – Anu Bradford [10:17]

4. U.S. Legislative and Executive Pushback

(13:30–19:58)

• Congressional Republicans, led by figures like Jim Jordan and J.D. Vance, are framing EU regulations as attacks on American free speech and innovation.
• Distinction is made between Trump’s focus on U.S. corporate interests and the congressional narrative about censorship and personal freedoms.
• Tech firms have lobbied hard but previously received less support from Democratic administrations.

Quote:
"They're using this as a specter of censorship as a political pretext for whatever it is that they want to do and whoever it is that has paid them the most money to serve them." – Kate Klonick [14:39]

5. Internal and External Pressures on the European Union

(19:58–25:36)

• EU faces external pressure from the U.S. and internal pressures over the economic impact and enforceability of its regulations.
• Despite broad political support for tech regulation within the EU, the continent’s need for military and technological autonomy in a destabilized global order collides with maintaining open, competitive markets.
• Key argument: Europe’s lag in tech innovation isn’t primarily due to regulation, but deeper systemic issues—venture capital fragmentation, risk aversion, bureaucracy, and a lack of talent.

Quote:
"Even if the Europeans decide to scrap the entire AI Act today, I tell you, all these AI companies would not be emanating from Europe five or even ten years from now.” – Anu Bradford [21:12]

6. Digital Sovereignty and the Rise of Industrial Policy

(27:05–33:04)

• “Digital sovereignty” is now central to both U.S. and EU strategies.
• Recent U.S. moves—including a 10% government equity stake in Intel and talk of investments in defense contractors—signal a shift toward direct government involvement in the tech stack (“state-driven model”), moving closer to Chinese industrial policy.
• Increasingly, both regions must resolve the tension between security, innovation, and open global markets. Tech firms are caught in a web of overlapping interests—hardware, software, supply chains, and markets.

Quote:
"This is like a classic kind of mob story, right? Well, it's 15% now and then it's 20%, and then it's like, oh, do you also want protection from China?" – Kate Klonick [28:26]

7. The China Factor

(33:04–38:08)

• China’s rapid progress in AI is the main catalyst for U.S. and EU regulatory and industrial strategies.
• U.S. is at risk of undercutting its main advantage (attracting global AI talent) through restrictive immigration and competitive policies.
• Both the U.S. and EU risk converging toward a protectionist, state-driven model in their effort to compete with China.

Quote:
"In many ways, I think... the US is giving up on the very advantages that have served the US tech economy over the years." – Anu Bradford [34:00]

8. The Challenges and Realities of Tech "Balkanization"

(38:08–48:30)

• Supply chains and innovation are inseparable from globalization: companies like Apple rely on complex international supply chains, making full “repatriation” largely impossible.
• U.S. immigration and H1B policy is pushing critical talent to countries like Canada and, increasingly, Europe.
• For Europe, the biggest hurdles remain national regulatory fragmentation, underdeveloped capital markets, risk-averse bankruptcy laws, and slow administrative processes.

Quotes:
"They're sending their workers to Canada to work remotely. I'm not joking." – Kate Klonick [39:21]
"If you really were to repatriate all of that supply chain to the United States, the price of that iPhone would be $3500. It just doesn't work.” – Anu Bradford [44:13]

9. Conclusion: Culture, Policy, and Future Stakes

(48:30–49:12)

• The “Balkanization” of tech is hitting up against economic and geopolitical reality—neither the U.S. nor the EU nor China can fully ‘go it alone.’
• The crucial question ahead: Which bloc can maintain a culture of innovation and risk-taking amidst rising strategic controls and fragmented governance?

Quote:
"The predominant factor that we're going to have to watch is who has the leading innovation culture and who can sustain a culture of risk taking and betting on some of these massive new technologies." – Kevin Frazier [48:30]

Memorable Moments & Notable Quotes

• "President Trump has... tied this entire conversation of European regulations into the United States’ willingness to extend the military support to Europeans and to Ukraine. So that really elevates the stakes."
  — Anu Bradford [05:47]
• "You cannot Balkanize that... AI doesn’t respect national borders."
  — Anu Bradford [10:17]
• "There is truly a new moment in which we are having a lot of pressure put on tech companies from Europe. And now we have this new administration that’s willing to go to bat for them."
  — Kate Klonick [14:39]
• "Europe's lagging in innovation isn’t due to regulations like GDPR or the AI Act. There are much more fundamental pillars of the tech ecosystem that need to be rebuilt in Europe."
  — Anu Bradford [21:12]
• "This is like a classic kind of mob story, right? Well, it's 15% now and then it's 20%, and then it's like, oh, do you also want protection from China?"
  — Kate Klonick [28:26]
• "In many ways, I think what I fear is that the U.S. is giving up on the very advantages that have served the U.S. tech economy over the years."
  — Anu Bradford [34:00]
• "They're sending their workers to Canada to work remotely. I'm not joking."
  — Kate Klonick [39:21]
• "If you really were to repatriate all of that supply chain to the United States, the price of that iPhone would be $3,500. It just doesn't work."
  — Anu Bradford [44:13]

Key Segment Timeline

• 02:20–05:47: Framing of the regulatory divide, Trump’s rhetoric, and the broader trade-tech war
• 09:20–13:30: Brussels Effect and its impact on global AI
• 13:30–19:58: U.S. legislative and executive countermeasures; the role of Congress and tech lobbying
• 19:58–25:36: EU’s internal and external pressures; continued support for regulation versus innovation
• 27:05–33:04: The push for digital sovereignty, U.S. government equity stakes, industrial policy rise
• 33:04–38:08: The China factor in shaping Western regulatory strategy
• 38:08–48:30: Globalization versus balkanization in tech talent, supply chains, and innovation culture
• 48:30–49:12: Conclusion: What to watch for in future global tech governance battles

For those who haven’t listened:

This episode provides a rich, clear look at the complex network of policy, economics, and geopolitics driving AI and digital platform regulation in the EU and the U.S., and grapples thoughtfully with the real-world constraints and competitive pressures posed by China and global supply chains. The debate underscores that regulation can shape technology—but building cultures of risk and innovation, and navigating the practicalities of globalization, can matter even more.