Earlier this month, European Commissioner Thierry Breton announced the European Union would consider levying daily fines on X (formerly Twitter) for extending its blue check verification system to eligible premium users. The change, Breton contended, “deceived users” and infringed the EU’s Digital Services Act (DSA), a 2022 package of regulations concerning illegal content, advertising, and “disinformation.”

Though the scale of the fine — which could total around 6% of the X’s annual global revenue — was unusual, the threat was not; in the last year alone, the EU levied dozens of fines, ranging from hundreds of thousands to billions of euros, on American tech companies for failing to comply with their extensive roster of digital regulations. High level, we could describe the phenomenon as follows: European regulators create vague, ever-shifting rules to govern the conduct of highly productive American tech companies, fine these companies for non-compliance, and then use the money they’ve earned to underwrite Europe’s stagnating economy — and pay their own salaries, of course.

American tech company shareholders ultimately bear the costs of the EU’s growing tariff-in-all-but-name scheme. Additionally, there’s evidence to believe the regulation is designed to extract from companies, rather than protect consumers: as we’ll see, the bloc often imposes massive, clearly premeditated fines immediately after compliance deadlines. And now, with its new DSA and Digital Markets Act (DMA) — which allow for fines of up to 6% and 10% of a company's worldwide yearly revenue — EU regulation threatens to significantly cut the profit margins necessary for R&D, capital expenditures and other strategic investments to maintain incumbency and increase shareholder value.