The search for a suitable negotiation strategy for the EU in the trade conflict with the US is producing strange results. In view of what is rightly considered to be an ineffective exchange of blanket tariff and counter-tariff threats, attention has turned to the supposed Achilles heel of the US export economy: the surplus in the services balance, which is mainly generated by Big Tech.

From an economist's point of view, this could be used to set up a targeted threat scenario. This is because the so-called hyperscalers in the cloud business, Microsoft, Amazon and Alphabet, in particular, generate high double-digit billion revenues in the EU each year with these services. For Apple, the EU accounts for around a quarter of its 100 billion dollar services division, while Meta also generates revenues of just under 50 billion dollars here, mainly from digital advertising.

The billions in revenue that US technology giants generate in Europe show that the EU's negotiating position is by no means so weak that it needs to make far-reaching concessions at this point. Big Tech has few alternatives anyway. The gigantic Chinese growth market is virtually completely closed to US software giants, both for private and corporate customers. Other emerging markets in Asia, Africa or Latin America do not have the economic strength to compensate for major losses in the European single market.

In this respect, there is also no reason to partially waive the platform regulation laid down in the Digital Markets Act (DMA), which imposes stricter competition rules on Big Tech in particular and has therefore been opposed by corporations from the outset. The European digital economy rightly points out that relaxing the DMA, which came into force only two years ago, would undermine confidence in the enforceability of European legislation and the reliability of the internal market as a stable legal area. Not to mention that the much-vaunted creation of European tech champions cannot progress at all without fair and transparent regulation of digital markets, given the oppressive market power of Big Tech. Meanwhile, the US tech giants can be involved in discussions on the further development of the DMA without any harm, as the Commission intends, but there is no need for the EU to bow down in any way.

However, it is also doubtful whether the EU is in a comfortable position to turn the tables, as initial tactical considerations suggested. This is because any tangible obstruction of Big Tech's business in the EU would also directly affect customers. Microsoft, Amazon and Google have a combined market share of more than 70% in the European cloud market. This means they dictate the technological standards and also define the economic framework conditions. Even though the debate about the so-called sovereign cloud, in which providers should be European and data centres located in Europe, has gained considerable momentum in recent years due to the political shift in the US from partner to adversary, in the end hardly any companies have been willing to forego the advantages of Big Tech's technologically leading and highly efficient services in favour of domestic providers. European cloud projects are a history of failures. A new start is on the horizon, but it will be laborious and time-consuming. Weaning private customers off the duopoly of the App and Play stores or the Meta social media family is even less promising.

Restrictions on the purchase or consumption of digital services from the US are therefore a rather blunt weapon in the negotiating battle. Nevertheless, the dependence is at least mutual to the extent that the EU is well advised and well equipped to rule out substantial interventions in the DMA from the negotiations.