European Technology Faces Growing Political Influence and Challenges

**European Technology Faces Growing Political Influence and Challenges**

As 2025 unfolds, Europe’s digital landscape is undergoing a...

As 2025 unfolds, Europe’s digital landscape is undergoing a profound transformation, shaped by intensifying geopolitical rivalries, rising concerns over sovereignty, and the growing political influence of both state and corporate actors. What was once seen as a primarily economic and regulatory issue has now become a central battleground for power, values, and the future of democracy.

The European Union, long regarded as a regulatory powerhouse...

The European Union, long regarded as a regulatory powerhouse in digital policy, is now grappling with the reality that technology is no longer just a tool for economic growth—it is a key determinant of geopolitical influence and national security. The escalating confrontation between the United States and China over technological dominance has forced Europe to re-evaluate its position. No longer content to be a passive mediator, the EU is increasingly focused on asserting its digital sovereignty, seeking to reduce its dependence on foreign tech giants and to shape its own technological destiny.

### The Sovereignty Debate Reshapes EU Politics

The push for digital sovereignty has reordered the internal...

The push for digital sovereignty has reordered the internal balance of power within the EU. Traditionally, smaller member states championed open markets and free trade, but the current climate has led even digital frontrunners like France and Germany to advocate for cloud sovereignty and “Buy European” provisions. This shift has strengthened the influence of Paris and Berlin, as they lead efforts to attract investments from tech giants promising to build sovereign cloud infrastructure on European soil.

However, this new dynamic has also exposed fractures within...

However, this new dynamic has also exposed fractures within the EU. While most member states agree on the need to reduce dependencies, their policy interests do not always align. Smaller countries, eager to attract investment and foster innovation, find themselves competing for the attention of tech giants, often at the expense of broader European cohesion. The absence of sufficient EU funding means that digital frontrunners must rely on private capital, giving them an edge in adopting new technologies and attracting startups. Yet, this also means that the benefits of digital transformation are unevenly distributed, with smaller states struggling to keep pace.

### The Geopolitical Stakes

The stakes are high. Europe’s digital infrastructure is incr...

The stakes are high. Europe’s digital infrastructure is increasingly seen as a battleground in the larger struggle for technological and industrial supremacy between the US and China. Both powers view the European market as critical to their global ambitions, and their competition has spilled over into nearly every aspect of technology policy, from 5G networks to artificial intelligence.

This rivalry has made clear that Europe’s lack of significan...

This rivalry has made clear that Europe’s lack of significant digital corporations with global influence is a major disadvantage. Despite its advanced digital capabilities, the EU has no equivalent to Google or Tencent. Past efforts to create European tech champions have often faltered, leaving the continent vulnerable to external pressures and unable to shape global standards in line with its values.

### The Democratic Challenge

As technology becomes more central to political life, concer...

As technology becomes more central to political life, concerns about its impact on democracy have grown. The business models of major social media platforms—relying on data harvesting and targeted advertising—have been linked to increased political polarization, erosion of trust in institutions, and the spread of misinformation. The EU’s regulatory approach, focused on reining in powerful tech companies and reestablishing public authorities’ leverage, has gained broad support. However, critics argue that this focus on tech sovereignty risks sidelining the role of democracy in the digital sphere.

There is a growing consensus that stronger and more tailored...

There is a growing consensus that stronger and more tailored democratic measures are needed to ensure that technology serves the public interest. As tech companies assume greater political relevance and technologies impinge on citizens’ rights, there is a pressing need for active political agency. Citizens must have a say over how technology is developed and deployed, and safeguards must be put in place to prevent states from using public-interest technology initiatives for illiberal purposes.

### The Road Ahead

The path forward is fraught with challenges. Completing the...

The path forward is fraught with challenges. Completing the digital single market and reforming capital markets are essential for small states to compete, but these reforms will take years to implement—if they can be agreed upon at all. In the meantime, the digital frontrunners must bet on interoperable and open-source solutions, aiming to stitch together a European supply chain that can rival the global giants.

The EU’s ambition to become a global player in technology wi...

The EU’s ambition to become a global player in technology will require not only regulatory muscle but also a robust digital diplomacy strategy. By learning to play global technology politics, the EU can better defend its values, enhance its security, and foster digital markets at home and worldwide.

As Europe navigates this complex landscape, the question of...

As Europe navigates this complex landscape, the question of digital sovereignty is no longer just about control over technology—it is about the future of democracy, security, and the very fabric of European society. The choices made in the coming years will shape the continent’s role in the world for decades to come.