Lassoing Digital Gatekeepers: A Bad Idea

Aurelien Portuese September 23, 2021
September 23, 2021

In a quest to cut “big tech” down to size, progressives in the United States want to copy Europe’s proposed Digital Markets Act (DMA). A sweeping antitrust package now under consideration in the U.S. House mimics Europe’s antitrust ideas. This is a misguided approach. 

As Aurelien Portuese writes in CEPAEurope’s DMA will impose a raft of onerous obligations on superstar firms in order to favor their digital competitors at the expense of innovation. Instead of adopting an EU-inspired antitrust framework, U.S. policymakers should press Brussels to limit their proposal’s worst and most discriminatory aspects. Both the European and American plans would create a two-level playing field: Competition would be regulated differently depending on whether or not companies are part of a narrowly defined category, dubbed “gatekeepers” in Europe and “critical trading partners” in the U.S.. 

The DMA and the House bills will ultimately create unfair competition, despite the goal to create "fair" competition. And both of the plans prioritize regulation over innovation, prohibiting practices that would generate innovation. The end result will harm the U.S. digital ecosystems, app developers, U.S. tech workers, and ultimately consumers. It will impede tech companies’ ability to continue disrupting markets and producing new innovations that improve user experiences and our daily lives. 

Policymakers in the U.S. should reject the House’s anti-innovation, European-inspired legislative package and instead adopt sensible antitrust reforms consistent with American values of economic growth, consumer welfare, and innovation.