WASHINGTON, DC – Today, Congressman Scott Fitzgerald (WI-05) introduced two pieces of legislation aimed at declaring U.S. companies independent from burdensome foreign regulations, particularly targeting the European Union’s (EU) Digital Markets Act (DMA) and Corporate Sustainability Due Diligence Directive (CSDDD).
Protect U.S. Companies from Foreign Regulatory Taxation Act
Congressman Scott Fitzgerald introduced the Protect U.S. Companies from Foreign Regulatory Taxation Act, a bill to shield American companies from having to comply with certain foreign digital market regulations, including the EU’s Digital Markets Act.
“Foreign countries have tried to take advantage of U.S. businesses by implementing tariff-like regulations, such as the EU’s Digital Markets Act, to appropriate the U.S. tax base for their own benefit. This threatens American innovation, weakens the U.S economy, and harms consumers worldwide,” said Congressman Scott Fitzgerald. “Congress and the Trump Administration should resoundingly condemn these regulations and support U.S. companies against these discriminatory acts by the EU and other foreign countries who seek to replicate their model.”
“Addressing the negative effects of the Digital Markets Act (DMA) on small businesses has been a priority for the App Association,” said Morgan Reed, President of ACT | The App Association. “We are grateful for Chairman Fitzgerald and Congress’ willingness to take action and their support for the U.S. Trade Representative’s actions to address the anti-competitive DMA and any future digital regulations through ongoing trade negotiations. The DMA is hamstringing small tech companies in the U.S. and EU. In taking aim at big tech, it is causing untold collateral damage on App Association members and other small tech companies that rely on the global reach of curated online marketplaces.”
Background: Under the Digital Markets Act, “gatekeeper” companies, as designated by the European Commission, must comply with certain requirements or face fines as high as 10% of global annual revenue, or 20% for repeat violations. According to the European Commission, the main objective of this regulation is to regulate the behavior of the so-called “Big Tech” firms within the European Market. But the DMA appears to unfairly target only American companies.
The severe fines serve as a de facto tax on American companies, resulting in decreased innovation and fewer American jobs. According to one recent report, this tax could lead to a loss of $325 billion in R&D investments across the largest U.S. tech companies. In addition to the European Union, countries like South Korea, Brazil, Australia, and the United Kingdom have begun enacting proposals to regulate conduct by U.S. tech companies.
Read the bill text here.
Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025 (PROTECT USA Act of 2025)
Congressman Scott Fitzgerald introduced the Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025 (PROTECT USA Act of 2025), legislation that would shield U.S. companies from the EU’s harmful extraterritorial regulations specifically by prohibiting certain U.S. companies from complying with the EU’s Corporate Sustainability Due Diligence Directive.
“The EU’s Corporate Sustainability Due Diligence Directive is a direct threat to U.S. companies and their workers,” said Congressman Scott Fitzgerald. “These extraterritorial regulations burden American businesses with foreign mandates they didn’t vote for and can’t challenge. My bill protects U.S. companies from becoming collateral damage in the EU’s ESG agenda.”
“The European Union is effectively trying to export its failed energy policies by imposing the CSDDD on American businesses, including oil and natural gas producers,” said API Executive Vice President and Chief Advocacy Officer Amanda Eversole. “We thank Rep. Fitzgerald for introducing legislation to protect American interests from extra-territorial regulations that threaten U.S. competitiveness, hurt consumers and put American businesses at a disadvantage in the global market.”
Background: In May 2024, the EU adopted CSDDD, which converts a range of international conventions into binding laws enforceable on American companies. This directive would capture a large number of U.S.-based companies, particularly those in “high-impact sectors”, including, but not limited to, textiles, agriculture, fuels, and chemicals. Companies operating within these industries would be subject to the rule if their EU revenues reach a threshold of €450 million among other factors.
CSDDD not only requires disclosure but also mandates the identification, mitigation, and resolution of adverse environmental and social impacts as well as requires U.S. companies to implement “net zero” carbon emissions targets and a Paris-aligned climate transition plan. This places U.S. companies in a position where they must force their U.S.-based suppliers and customers to reduce greenhouse gas emissions, irrespective of the economic consequences. In addition to imposing severe financial penalties for violations, the rule indirectly harms small and medium-sized businesses by requiring large companies to police their suppliers for compliance with ESG standards.
Senator Bill Hagerty (R-TN) introduced a companion bill in the Senate.
Read the bill text here.
