Last July, millions of consumers found their lives disrupted after CrowdStrike, a cybersecurity company, pushed a faulty update onto millions of Windows computers globally, creating the largest IT outage in history. The incident forced major airlines to ground planes, caused TV broadcasters to go offline, and disrupted courtrooms and doctor’s offices nationwide. This crisis underscores the vital link between technology and national sovereignty — when our digital infrastructure is compromised, so is our economy, security and position as a global leader.
The failure was catastrophic, and the effects rippled across the broader economy. Leading Fortune 500 companies lost $5.4 billion. Delta Air Lines, the airline most affected by the outage, was forced to cancel more than 6,000 flights and announced a staggering $550 million in losses. The global economic cost of the outage — including the effect on small businesses and startups — was estimated to be $15 billion. Yet, insurers committed to covering up to only 10 percent of the losses, leaving many small-business owners to bear the financial burden.
This incident highlights how regulatory policies can influence cybersecurity preparedness and technological resilience. Poor European policymaking has put American companies at a disadvantage, endangering consumers and economic stability. Unfortunately, some U.S. lawmakers and regulators have attempted to replicate these flawed policies. However, President Trump will have an opportunity to reject these misguided approaches and reinforce American digital sovereignty.
For over a decade, European lawmakers have pushed for anti-business, anti-consumer policy goals supposedly meant to promote competition. In 2009, European officials forced Microsoft to give other companies unprecedented access to and power over its Windows systems. However, instead of fostering innovation, this “mandated interoperability” between Microsoft systems and third-party vendors amplified the effects of cybersecurity failures, as demonstrated by the CrowdStrike outage, where a single error had devastating effects.
More recently, the European Union passed the Digital Market Act (DMA), targeting American businesses labeled as “gatekeepers” and forcing them to share their proprietary products with third parties. This regulatory overreach not only stifles innovation but also creates significant privacy vulnerabilities and cybersecurity risks. The DMA’s mandate for app store sideloading allows unsafe backchannels that bypass stringent cybersecurity standards, exposing consumers to malware and other cybersecurity threats.
EU Competition Commissioner Margrethe Vestager has downplayed these risks, stating that “security is not something that the DMA addresses.”
However, consumer watchdog groups, think tanks and other policy experts have made it clear that these changes pose a real risk to consumers. CrowdStrike executive Adam Meyers acknowledged in a congressional hearing that tighter security controls might have prevented the disastrous outage.
While the U.S. debates flawed regulatory models, China is rapidly advancing in critical technology sectors, particularly in open-source artificial intelligence. Chinese tech firms, with strong state backing, are leading the charge in AI development, outpacing the United States in areas such as natural language processing, facial recognition and generative AI. Open-source AI models, which are critical to economic and military applications, are increasingly developed under Chinese influence, raising concerns about data privacy, national security and America’s competitive edge.
Rather than adopting flawed European policies, the United States should pursue a proactive agenda focused on strengthening national cybersecurity and technological leadership by:
—Prioritizing Digital Sovereignty: Treating cybersecurity as a cornerstone of national security to ensure American control over critical digital infrastructure.
—Encouraging Innovation-Friendly Policies: Promoting regulatory frameworks that balance competition with security, enabling American companies to lead in AI and other emerging technologies.
—Strengthening Public-Private Partnerships: Collaborating with the private sector to develop resilient cybersecurity measures and maintain leadership in AI.
—Investing in Secure Open-Source Development: Ensuring American leadership in open-source AI development to counterbalance China’s growing influence.
America’s future as a digital superpower depends on policies that put cybersecurity and innovation first. Failure to act decisively could leave the nation vulnerable to economic and security threats from adversaries and regulatory overreach.
