The European Union has passed the Digital Markets Act and Digital Services Act, a pair of radical antitrust bills that are destined to make it more difficult for tech companies to conduct business in the European Union. Meanwhile, the United States is attempting to pass similar legislation to curb the growth of these companies. American lawmakers should not follow Europe, which treats American tech companies as a piggy bank, as the model for antitrust legislation in the U.S.
The economic practices of the European Union do not represent a model worth replicating. The EU’s anti-free market approach stifles economic growth and puts the union at a disadvantage on the global stage. The per capita income of the European Union is 1.86 times less than the United States in nominal terms and 1.44 times less in PPP terms as well. This trend is not an anomaly. The United States has had a greater GDP/capita than the European Union for over 50 years. Economists also credit the European Union’s stricter regulations on businesses as part of the reason for their greater difficulty in closing the pre-pandemic economic gap compared to the United States.
Instead of learning from the consequences of their regressive economic practices, the European Union has stayed the course by continuing to hamper economic growth. These European Union bills parallel the radical antitrust legislation proposed by Sen. Amy Klobuchar (D-Minn.). In particular, they place stark restrictions on self-preferencing, a practice that would be banned if Congress passes the American Innovation and Online Choice Act. Economists and experts on both sides of the aisle, however, warn that these policies would significantly hamper the American economy. Numerous Obama Administration economic officials have spoken out in opposition of the bill due to its potential to increase inflation. The Wall Street Journal Editorial Board criticized the bill’s vague language that makes it, “hard to predict how regulators would apply the bill’s conduct prohibitions and mandates.” The US Chamber of Commerce and 175 state and local chambers of commerce, the largest organization representing small business interests to oppose S. 2992, wrote a letter condemning the legislation.
These bills, additionally, target companies that are all based in the United States. The Big Tech companies, Apple, Meta, Alphabet and Amazon, are all based and primarily produce jobs within America. This legislation disproportionately affects the US economy, including their workers and consumers, more so than any other country in the world. It is one thing for a foreign country to attempt to restrict the growth of US-based businesses. It is especially problematic, however, when the American government restricts its own businesses from growing.
America should not follow Europe’s lead on antitrust legislation.