In 2024, the European Union (EU) implemented its new digital regime – the Digital Markets Act (DMA) – and sold it to the world as a well-meaning attempt to promote competition online. In reality, it’s turning into a regulatory bludgeon aimed squarely at a handful of successful American technology companies. The DMA has not encouraged competition. Instead, it has become a weapon wielded by regulators in Brussels that they have used to disincentivize innovation and punish success.
Since the DMA took effect, the European Commission (EC) has wasted no time launching investigations targeting leading U.S. companies named as so-called “gatekeepers” and threatening eye-popping fines. These “gatekeepers” are almost exclusively American companies, targeted not because of anticompetitive conduct, but because they are successful.
Despite being singled out by unfair regulations, American tech companies targeted by the DMA released their compliance plans to meet the law’s requirements. While the EC reviewed the plans, U.S. companies made every attempt to comply. They made changes to their products and services, and they allowed competitors more access to platforms. However, a handful of businesses competing with the companies singled out by the DMA complained that they wanted more. They wanted access to private consumer data and sensitive intellectual property.
The European Commission neither approved the plans nor rejected them. For months, the EC let them sit. Then, with the compliance deadlines passed and no formal guidance issued, the Commission turned around and announced investigations accusing companies of failing to comply with rules that had never been clearly disclosed in the first place.
So while the DMA is supposed to support competition, its selective and punitive enforcement make it clear that the EC is attempting to engineer the digital economy according to Brussels' vision, regardless of what consumers actually want. In Europe, the market is being restructured by bureaucrats with little understanding of how digital ecosystems function.
Rather than fostering innovation, the DMA risks setting a precedent that innovation is something to be punished. It’s no coincidence that Europe’s own tech sector has struggled to thrive, and there is a reason that European startups are having a difficult time finding funding. It’s an issue that even some European officials have identified. A 2024 report commissioned by the EC discussing the EU’s stagnant economy found that “innovation is blocked by inconsistent and restrictive regulations.”
American regulators recognize the threat posed by Europe’s regulatory environment. Federal Trade Commission Chair Andrew Ferguson commented recently that Europe’s “heavy regulatory hand will only squelch innovation.” He’s right.
Thankfully, White House officials are working to push back on the DMA and protect American jobs, innovation, and technological leadership. If the EU wants to regulate digital markets fairly, it should start by offering clarity and transparency with the companies it regulates. Until then, American policymakers should continue to push back against this direct threat to U.S. economic interests.
