This bill prevents U.S. courts from enforcing foreign regulatory judgments against critical American companies targeted by foreign digital market rules, granting the President authority to shield them.
Scott Fitzgerald
Representative
WI-5
This bill aims to protect vital U.S. companies from foreign regulations that target American technology leadership, particularly concerning digital market rules. It prevents U.S. courts from enforcing foreign legal judgments against these critical entities based on such regulations. Furthermore, the President is granted authority to shield these companies from adverse foreign actions when deemed in the national interest.
New Act Blocks Foreign Rulings Against U.S. Tech Giants, Grants President Broad Power to Intervene
The newly proposed Protect U.S. Companies from Foreign Regulatory Taxation Act is essentially a defensive shield designed to protect major American tech companies from foreign regulations, most notably the European Union’s Digital Markets Act (DMA).
The Shield for Silicon Valley
This bill starts with a clear goal: to prevent foreign court rulings against U.S. entities deemed “integral to the national interests of the United States” from being enforced here at home (SEC. 3). If a court in, say, France or Germany rules against a U.S. tech company regarding a foreign digital market regulation, that judgment generally can’t be recognized or enforced by any U.S. federal or state court. Think of it like this: if you’re a U.S. company required to comply with a foreign law that forces you to share proprietary algorithms or prohibits you from favoring your own services over rivals (a key part of the DMA, as defined in SEC. 4), and you lose a legal battle over it abroad, this bill tries to make sure that loss doesn’t follow you home.
The Presidential Wildcard
This is where the bill gets interesting—and potentially powerful. Section 3 grants the President the authority to step in and take “any action they think is in the public interest” to shield one of these critical U.S. entities from a negative foreign regulatory action. This is an incredibly broad mandate. When deciding, the President must consider how the foreign action affects U.S. consumers, our economic security, and our international relationships. For example, if a foreign regulator fines a major U.S. cloud provider for non-compliance with data portability rules, the President could potentially use this authority to intervene politically or economically to protect that company. This concentrates significant power in the Executive Branch to manage international trade disputes based on a very vague “public interest” standard.
Who Gets Protected? And From What?
The protection is aimed at “entities integral to the national interests of the United States” (SEC. 4). This includes any U.S.-organized company that contracts with the federal government, provides a “core platform service” (referencing the EU’s DMA definition), and is subject to a foreign digital market regulation. Crucially, the President can also simply designate any company as vital to U.S. national interests, opening the door for protection based on executive discretion rather than specific criteria.
The foreign regulations being targeted are those that force companies to do things like allow interoperability with their operating systems, hand over proprietary information like trade secrets, restrict how they use legally collected data for advertising, or force them to treat rival services better than their own. Essentially, the bill targets the specific competition and data-sharing requirements found in laws like the EU’s DMA, viewing them as a form of “taxation” or unfair regulation aimed at hobbling U.S. digital leadership.
The Real-World Friction
For most people, the immediate impact is indirect, but the long-term implications are significant. The bill is designed to maintain the status quo for large U.S. tech companies operating globally, potentially shielding them from costly compliance or business model changes mandated by foreign governments. On one hand, this is good news for U.S. economic competitiveness and investment in the digital sector, which ultimately supports jobs here. On the other hand, foreign consumers and smaller competitors relying on laws like the DMA for fair market access or better data protection might be left out in the cold. If a U.S. company is protected from mandatory data sharing abroad, that could stifle innovation for smaller foreign rivals who need that access to compete. This bill prioritizes U.S. national economic interest over compliance with foreign regulations aimed at consumer protection or competition, potentially setting up serious international legal battles and challenging the principle of enforcing foreign legal decisions.