Microsoft Corp. MSFT President Brad Smith has declared the company’s commitment to adhering to European laws, a stance that starkly contrasts with the White House’s disapproval of the EU’s recent sanctions on Big Tech.
What Happened: As per a Wednesday blog post on Microsoft’s official blog, Smith confirmed Microsoft’s recognition of the applicability of European laws to its operations in the region. This includes the Digital Markets Act, a significant legislation designed to regulate Big Tech.
Smith detailed Microsoft’s approach to tackling EU concerns over the dominance of U.S. tech firms in cloud computing and data privacy. He pledged that the company would contest any government directive to suspend or shut down its cloud operations in Europe.
“We believe in trans-Atlantic ties that promote mutual economic growth and prosperity,” stated Smith.
The company welcomed the Trump administration and the EU's decision to pause further tariff increases to pursue a reciprocal trade deal, expressing hope that successful negotiations will address tariff concerns and reduce non-tariff barriers, in line with the Draghi report’s recommendations.
Moreover, Smith revealed that Microsoft’s European data center operations would be supervised by a European board of directors, and the company aims to expand its European data center capacity by 40% over the next two years.
Why It Matters: The recent fines of nearly $800 million imposed on Apple AAPL and Meta META by the European Commission marked the first major enforcement of the Digital Markets Act, sparking severe political backlash in Washington and potentially igniting new U.S.-EU trade tensions.
This also comes on the heels of the EU’s threats to impose additional taxes on U.S. tech giants amid ongoing tariff negotiations with the Trump administration.
The Satya Nadella-led Microsoft’s commitment to European laws is noteworthy, especially considering its recent decision to suspend its billion-dollar data center project in Ohio, as part of a trend of withdrawing from data center projects globally.
Notably, in July, the company expressed displeasure over a prior agreement with the European Commission, which prevents it from adopting the same security measures for Windows as Apple does to shield macOS from a CrowdStrike outage.
Benzinga’s Edge Rankings highlight strong momentum and growth rankings for Microsoft in the 43rd and 65th percentiles, respectively. Curious how other stocks stack up? Click here to uncover growth and momentum scores for top stocks.
The stock climbed nearly 5% over the past month, while on a year-to-date basis, it dropped 5.86%.
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