The Framework

The European Union’s Digital Markets Act (DMA) mandates that large digital platforms, designated as “gatekeepers,” ensure interoperability across their services.[1] This includes messaging services, operating systems, and virtual assistants, requiring companies like Meta and Apple to allow cross-platform communication and third-party integration. The DMA aims to prevent dominant platforms from locking users into their ecosystems and foster a more open, competitive digital marketplace by imposing ex-ante obligations rather than relying on traditional antitrust enforcement.

Implications for U.S. Technology Companies

The DMA’s interoperability requirements impose significant costs on U.S. tech companies, which dominate the global digital market. Compliance forces them to share proprietary technology and data with competitors, eroding their competitive advantage. It also increases operational costs, diverting resources away from innovation and investment. The regulation further limits self-preferencing, restricting these companies’ ability to integrate services in ways that improve user experience. Unlike traditional ex-post antitrust enforcement, which assesses market harm after the fact, the DMA’s rigid ex-ante prohibitions preemptively ban certain business practices without fully considering their economic benefits. These broad restrictions may stifle legitimate pro-innovation strategies and reduce incentives for long-term investment. Nearly all of the companies targeted by the DMA are American, placing U.S. firms at a disadvantage while European and Chinese competitors remain largely unaffected.

How China Benefits

The restrictions imposed by the DMA create opportunities for Chinese tech companies to expand their influence in Europe and beyond. U.S. firms are now constrained from leveraging their ecosystems, while companies like Tencent, Alibaba, and ByteDance face no comparable regulatory burdens. Chinese firms can offer fully integrated services that American platforms are no longer allowed to provide, giving them a competitive advantage. By weakening U.S. companies’ ability to operate efficiently, the DMA indirectly strengthens China’s technology sector and diminishes American leadership in global digital markets. With U.S. firms constrained, China gains a strategic foothold in Europe at a time when technological dominance is becoming increasingly tied to global power dynamics.

Endnotes