Coinbase CEO says EU is profiting from fines tied to over-regulation

Concerns Over Regulatory Overreach and Economic Impact

Coinbase CEO Brian Armstrong has voiced strong criticism against the European Union, accusing the bloc of undermining its technology, crypto, and artificial intelligence economy through substantial fines imposed on US tech firms. Armstrong expressed his sentiments on X, responding to claims that the EU now earns more from regulatory actions than from corporate taxes paid by public European tech companies. He stated, "At some point, with enough regulation producing fines, it borders on looting. You can have more fines from over-regulation, or you can have a growing economy, but you can’t have both."

Armstrong's remarks were prompted by a post from David Fant, founder of the Agentic web platform Godmode AI. Fant highlighted that in 2024, the EU imposed €3.8 billion (approximately $4.4 billion) in fines on American companies, while public European internet firms contributed only €3.2 billion (approximately $3.7 billion) in corporate taxes. These penalties encompass €400 million under the bloc’s data protection laws and €3.4 billion under antitrust, Digital Markets Act, and Digital Services Act rules targeting major tech companies such as Apple, Google, Meta, X, and TikTok.

X Fined by EU, Sparking Criticism from Musk and US Officials

US business leaders have expressed significant dissatisfaction with what they perceive as the EU turning its digital rulebook into a revenue-generating mechanism that prioritizes fines over taxes. The EU's regulatory framework includes the General Data Protection Regulation (GDPR), the Digital Markets Act (DMA), the Digital Services Act (DSA), and the AI Act, all of which dictate how companies handle data. Critics argue that the expansion of these regulations and the bloc's strict enforcement have fostered an environment of apprehension among technology firms operating within its jurisdiction.

The most recent point of contention arose from a fine levied against Elon Musk's X (formerly Twitter) for approximately €120 million. The penalty was imposed due to an allegedly "deceptive" blue checkmark system and failures in its advertising transparency. Musk reacted strongly to the fine, posting on X, "The EU should be abolished and sovereignty returned to individual countries, so that governments can better represent their people."

Nikita Bier, head of product at X, sarcastically commented on the situation, mimicking an EU official: "Hello, I am Jürgen from Bruxelles. I have a masters in social business welfare studies. I demand 10% of your global revenue for violation of cookie popups."

Several American policymakers have publicly condemned the EU's actions. Secretary of State Marco Rubio described the penalty against X as an "attack on all American tech platforms and the American people by foreign governments." The US ambassador to the EU, Andrew Puzder, characterized the "excessive €120M fine" as a clear indication of regulatory overreach intended to stifle American innovation. He emphasized that Washington expects "fair, open, reciprocal trade and nothing less."

Puzder further elaborated in an interview with Bloomberg, noting that the largest penalties issued under Europe’s digital rulebook have consistently been imposed on US platforms. He questioned, "So at some point, if you’re an American company, you’ve gotta sit back and say, ‘Look, am I being targeted here?’ Or is this an effort to try and advantage European competitors over US companies?"

Vice President JD Vance suggested that the EU's crackdown on X was motivated by the platform's refusal to engage in censorship. He stated on X, "Rumors are swirling that the EU commission will fine X hundreds of millions of dollars for not engaging in censorship." Musk responded to Vance's post, expressing his appreciation for the support.

EU Lawmakers Defend Regulations and Enforcement

Despite ongoing criticism from the United States, European officials have defended the bloc's regulatory strategy, asserting that stringent rules are both necessary and justified. Bas Eickhout, co-chair of the Greens in the European Parliament, told POLITICO that the Commission must enforce digital laws "with an iron fist," regardless of protests from US officials.

Eickhout stated, "They should just implement the law, which means they need to be tougher." He also expressed confidence in the EU's regulatory leadership, adding that the bloc is "the only one fighting American Big Tech." The ruling against X marks the first formal noncompliance decision issued under the Digital Services Act, a law that came into effect shortly after Musk's acquisition of Twitter in 2022.