The European Union has announced a list of six “gatekeepers” that are on six-month notice to comply with the onerous Digital Markets Act, a law designed to cripple American companies and boost their smaller European rivals.
Make no mistake about it – this is a brazen attempt to fleece innovative American companies to the tune of tens of billions of dollars. Instead of innovating up to our level, the EU wants to drag American companies down to their level of stagnation.
The EU Competition Council designated Apple, Amazon, Google, Meta, and Microsoft as “gatekeepers.” Only one non-American company, the Chinese-owned Bytedance, made the cut.
The DMA is nothing but a thinly veiled attempt to stifle innovation, hamper consumer choice, and punish successful American companies that have created millions of jobs and billions of dollars in value for the global economy. The DMA is based on the false premise that these companies are “gatekeepers” that abuse their market power and harm competitors and consumers. In reality, these companies are constantly innovating, competing, and delivering value to their users.
The DMA will force these companies to comply with a set of onerous new regulations that may threaten their ability to operate. For example, the DMA will prohibit them from ranking their own products or services higher than those of others, pre-installing certain apps or software, or requiring users to install their web browsers by default. The DMA will also mandate them to ensure interoperability of their instant messaging services, give access to their data to competitors, and inform the European Commission of their acquisitions and mergers.
If these companies fail to comply with the DMA within six months, they will face staggering fines of up to 10% of their global revenue. If a bureaucrat determines that a company has repeatedly violated their regulations, they will face fines of up to 20% of global revenue or even structural remedies such as divestiture or break-up.
The DMA is the legislative culmination of a coordinated effort by the EU and its allies to undermine American leadership and dominance in the digital sector. The EU has already imposed hefty fines and taxes on American tech companies, such as Google, Apple, Amazon, and Facebook, for alleged antitrust violations. The EU has also launched spurious investigations into Microsoft and Meta for similar reasons.
The EU is not acting alone – it is colluding with Lina Khan, the chairwoman of the Federal Trade Commission (FTC), who is an outspoken critic of American tech companies and a proponent of the DMA. Khan sent staff to the EU to help implement the DMA. Khan has also been pushing for similar legislation in the US that would allow federal mutilation of platform companies.
Crippling regulations like the DMA are the reason that no innovative companies flourish in Europe anymore. Instead of deregulating to try and catch up with American tech leadership, the EU is trying to double down and export their failures.