“Fashion brands could face major digital fragmentation and operating headaches as EU and UK laws require platforms to implement region-specific content moderation and privacy controls,” says Lauren Madonia, Lvlup Legal business and intellectual property attorney.
These controls directly affect marketing plans, as the tech platforms that brands and advertisers rely upon to sell their products may have to operate completely differently in each market to satisfy conflicting regulations. A luxury brand’s Instagram campaign could face different content standards, targeting options, tracking and measurement, depending on where users are located, Madonia flags.
“This added complexity could undermine retargeting campaigns that typically drive repeat purchases,” she says. This could force fashion brands to diversify their advertising approaches and explore alternative customer acquisition methods in markets like Europe that could face more limited platform functionality.
Increased fragmentation could also see brands using Meta Business Manager or Google Analytics for global tracking ending up with scattered data that’s harder to compare; customer service through Whatsapp Business could work differently depending on local encryption rules; and customer data could become trickier to manage across borders. “Shoppers travelling from New York to London could lose the personalised recommendations that brands have worked so hard to provide,” Madonia says.
As brands race to invest in AI tools that promise to fix online shopping’s discovery and personalisation pain points, increased regulatory fragmentation poses a fundamental threat to the way these AI models work, too. They typically process customer data across borders, but brands could be forced to run separate systems for US versus EU customers. “This would reduce accuracy and could devastate companies whose entire business depends on AI-powered recommendations,” says Madonia.
And in the unlikely case that Europe did cave to Trump and weaken its regulation of US tech platforms, this could offer larger brands that handle more data more benefits than smaller brands. But these benefits would likely be short lived.
“Companies that fail to self-regulate and navigate the balance themselves risk damaging their hard-won credibility with European consumers.”
Venesa Rugova, senior analyst at geopolitical intelligence firm Minerva Technology Futures
“It would be much easier to target audiences effectively, which could also accelerate the development and deployment of AI tools across design, trend forecasting, inventory management and personalised marketing,” says Venesa Rugova, senior analyst at geopolitical intelligence firm Minerva Technology Futures. “But companies that fail to self-regulate and navigate the balance themselves risk damaging their hard-won credibility with European consumers, which could push them back towards traditional, in-person shopping channels.”