Contents

Introduction. 2

Question 6. The Current List of Core Platform Services 2

Question 7. The Designation Process 2

Question 8. The Current List of Obligations 3

Question 9. DMA obligations 3

Question 10. Tools Available to the Commission. 3

Question 11. Enforcement 4

Question 12. Procedural Framework 4

Question 13. The Implementing Regulation. 5

Question 14. Demonstrating Their Effective Compliance With the DMA. 5

Question 15. Positive and Negative Effects for Your Organization. 5

Question 16. Impact and Effectiveness 6

Question 17. Further Comments or Observations 6

Endnotes 7

Introduction

On July 3, 2025, the European Commission (Commission) launched a public consultation on the first review of the Digital Markets Act (DMA) to assess the “effectiveness of the legislation.”[1] The purported rationale for enacting the DMA was to ensure fair and contestable digital markets within the European Union (EU) by regulating the conduct of large online platforms designated as gatekeepers, as well as safeguarding the ability of business users—particularly small- and medium-sized enterprises (SMEs)—to compete.[2]

The Information Technology and Innovation Foundation (ITIF), the world’s top-ranked science and technology policy think tank, greatly appreciates the opportunity to respond to this important public consultation. As its responses to the Commission’s questions attest, ITIF does not believe that the DMA is an effective tool of competition policy. On the contrary, the DMA has resulted in demonstrable consumer welfare losses, chilled procompetitive behavior, and even harmed small businesses. What’s more, it has done so by imposing obligations and penalties that inexcusably target America’s leading technology companies, thereby straining the critical transatlantic bonds that are essential to ensuring Western techno-economic leadership in the 21st century amid the threat posed by China.

Question 6. The Current List of Core Platform Services

Do you have any comments or observations on the current list of core platform services?

With important exceptions and qualifications, the current list of core platform services generally encompasses services that are in some way related to those markets that have been subject to antitrust investigations and/or enforcement by the Commission and/or EU member states over the past several decades. But both the relatively more established—albeit nonetheless highly dynamic—nature of these markets, as well as claims that traditional competition law enforcement proved unable to adequately police anticompetitive conduct in these industries, do not exist as grounds to justify the application of the DMA to the AI foundation model and cloud markets that are empowering the next wave of digital innovation. As ITIF has explained, these markets are not only highly competitive and growing rapidly, but they do not demonstrate signs of market failure or an inability for regular competition law to address any anticompetitive behavior that may arise.[3]

Question 7. The Designation Process

Do you have any comments or observations on the designation process (e.g. quantitative and qualitative designations, and rebuttals) as outlined in the DMA, including on the applicable thresholds?

ITIF understands that the Commission’s motive in enacting the DMA was to further its longstanding competition policy objectives, including the flawed ordoliberal model that has contributed to the innovation-driven productivity gap with the United States.[4] Regardless, both the intent behind and effects of the DMA are demonstrably discriminatory against America’s leading technology companies.[5] Specifically, while even SMEs in terms of revenue can enjoy substantial digital market power, the DMA’s revenue thresholds for designating gatekeepers are, as MEP Andreas Schwab made clear, designed to limit its scope to the top five American technology companies: Alphabet, Amazon, Apple, Meta, and Microsoft. Indeed, of the more than twenty CPSs designated under the Act, only two involve non-American companies. And of course, the actual enforcement of the DMA only confirms its discriminatory and anti-American intent, as all of the investigations and fines that have been announced under the DMA so far have been against American gatekeepers. This targeting of U.S. firms has not been well received by the Trump administration, who named the DMA in a memorandum warning against the unfair exploitation of American companies.[6]

Question 8. The Current List of Obligations

Do you have any comments or observations on the current list of obligations (notably Articles 5 to 7, 11, 14 and 15 DMA) that gatekeepers have to respect?

The per se bans put forward by the DMA are chilling procompetitive behavior without providing any clear and offsetting benefits in terms of limiting false negatives that ex post enforcement tools are unable to address. The most striking example involves the application of Article 6(5)’s ban on self-preferencing, which, for instance, limits Google’s ability to integrate its search and maps services efficiently. As ITIF has highlighted, a recent consumer survey confirmed not only that 35 percent of respondents believe Google’s maps service has degraded, but that approximately 60 percent have found that Google search has worsened due to an increased number of clicks required to access the desired content, with 33 percent of respondents also finding less relevant results.[7] Moreover, as a result of Article 6(5), search traffic has been directed to Google’s large intermediary competitors often at the expense of the small businesses (e.g., restaurants and hotels) that EU competition policy is ostensibly designed to protect—potentially resulting in as much as a 50 percent reduction in their online traffic and millions of euros in revenues.[8]

Question 9. DMA obligations

Do you have any other comments in relation to the DMA obligations?

Troublingly, certain DMA obligations are being enforced in ways that exceed the scope of the Commission’s already broad competition policy goals. For example, the DMA’s prohibition in Article 5(2), which prevents gatekeepers from combining user data across services without consent, served as the basis for a €200 million fine against Meta’s “consent or pay” model, despite no pretext of harm to competition. Rather, the Commission decided to use the DMA as de facto privacy regulation and attack practices that have not even been found to violate the General Data Protection Regulation (GDPR).[9] As studies have found, this sort of privacy regulation that reduces ad effectiveness is likely to result in negative consumer welfare effects vis-à-vis reduced investments in advertising, higher product prices, and even greater market concentration.[10] Indeed, less efficient advertising is not just likely to harm advertisers—many of whom are small businesses—but also users, with research finding that 80 percent of EU consumers prefer fewer but more targeted ads as opposed to those that more frequent and more random.[11]

Question 10. Tools Available to the Commission

Do you have any comments or observations on the tools available to the Commission for enforcing the DMA (for example, whether they are suitable and effective)?

As a regime focused on prohibiting exclusionary conduct, the Commission’s power under Article 18 to impose structural remedies is wholly unnecessary. In fact, not only will behavioral remedies almost always be adequate to address anticompetitive behavior, but structural relief is likely to impose costs that far outweigh any remedial benefits. Second, heavy-handed fines issued under Article 30(1)(a) that are punitively designed to deter future violations, such as those the Commission has already imposed upon Apple and Meta, should not be considered appropriate as the DMA is an ex ante regime that gives the Commission the ongoing power to essentially approve or sanction a gatekeeper’s business practices. Moreover, punitive fines are also ill-advised given that, in view of what studies have called the “opaque and administratively complex” procedural framework put forward by the DMA, it may be difficult for a gatekeeper to even know whether or not it is in compliance, let alone deliberately engage in illegal practices.[12] Indeed, reports suggest that Apple made a series of good faith remedial proposals to the Commission over a period of many months without receiving any feedback, which is thoroughly inconsistent with the Commission issuing punitive fines against the company.[13]

Question 11. Enforcement

Do you have any comments in relation to the enforcement of the DMA?

While the DMA is intended to prohibit anticompetitive conduct and thus could be deemed a form of “light touch” regulation, it is unfortunately being implemented in a way consistent with far more intrusive public utility regulation that seeks to dictate market outcomes. For example, in enforcing the effective interoperability obligation under Article 6(7), the Commission is not just forcing the Apple to comply with a non-discrimination regime that micromanages its product design decisions without any attempt to focus on protecting as efficient competitors, but is imposing a series of measures that will harm consumers and developers—many of whom are SMEs—through increased privacy and security risks.[14] Similar concerns about reduced privacy also exist with the DMA’s data portability requirements under Article 6(9)), with commentators noting research finding that over 75 percent of applicants are outside the EU, where privacy policies are often more lax.[15] Innovation has also suffered: not only was Apple forced to delay the rollout of Apple Intelligence, but the release of new features for AirPods Pro3 have similarly been withheld in Europe.[16]

Question 12. Procedural Framework

Do you have any comments or observations on the DMA’s procedural framework (for instance, protection of confidential information, procedure for access to file)?

The DMA is imposing heavy and overly burdensome compliance costs on gatekeepers. Overall, industry estimates suggest that the annual cost for an American gatekeeper to comply with the DMA is approximately $200 million.[17] At bottom, that is $1 billion in resources American gatekeepers are allocating to Europe each year for compliance with the DMA that could be used to productively invest in Europe’s economy, including in European startups who significantly rely on foreign investments especially for late stage funding.[18] For context, Meta had already reportedly spent over 590,000 working hours on compliance as of the March 2024 deadline.[19] Moreover, in addition to also spending hundreds of thousands of hours on compliance, not only is Apple, as a result of connected device interoperability requirements, being required to effectively white-label new features by providing them to connected device competitors at the same time it makes them available to its own integrated products, but it is also being tasked to create and maintain a database of its over 250,000 APIs—a significant and wholly disproportionate compliance burden on the company.[20]

Question 13. The Implementing Regulation

Do you have any comments in relation to the Implementing Regulation and other DMA procedures?

National implementing efforts risk undermining the DMA’s goal of providing a uniform competition enforcement regime for digital markets across the EU. As ITIF stated in its submission to the Italian Competition Authority on its draft harmonization regulation, the proposed approach would have granted the its competition agency investigatory powers beyond those envisioned by the DMA, created a substantial risk of parallel enforcement and a violation of the ne bis in idem principle, and contributed to regulatory fragmentation.[21] Indeed, the landmark Draghi Report itself highlighted how Europe’s position in innovative sectors can be hindered by regulatory fragmentation and a broader “rising weight of regulation.”[22]

Question 14. Demonstrating Effective Compliance With the DMA

Do you have any comments or observations on how the gatekeepers are demonstrating their effective compliance with the DMA, notably via the explanations provided in their compliance reports (for example, quality, detail, length), their dedicated websites, their other communication channels and during DMA compliance workshops?

As documented in their extensive compliance reports, American gatekeepers have been and continue to be heavily engaged in substantial good faith efforts to comply with the DMA. For example, Google has implemented myriad changes across its search and Android platforms, including over 20 modifications to its search service to benefit comparison sites, additional choice screens on Android, and new user consents when data is shared across services.[23] Furthermore, along with the interoperability measures noted above, Apple has reconfigured its mobile platform to enable alternative app distribution and allow for alternative payment processors—all while doing its best to mitigate the increased risks to security and privacy.[24] Moreover, Meta both substantially lowered the price of its subscription option and introduced an entirely new “Less Personalized Ads (LPA)” business model that allows European consumers to enjoy its products for free while using significantly less data for purposes of personalized advertising.[25] Similarly, Amazon implemented new user consents for data sharing, increased third-party access to consumer and seller data, and enhanced prior antitrust commitments to the Commission regarding its own use of seller data.[26] Finally, Microsoft has also made substantial changes to comply with the DMA, including allowing users to uninstall Edge and Bing using the standard Windows uninstall process, increasing platform access for third-party web search applications and developers, along with implementing new practices to limit the use of third-party data and ensure user consent.[27]

Question 15. Positive and Negative Effects for Your Organization

Do you have any concrete examples on how the DMA has positively and/or negatively affected you/your organisation?

As a non-profit dedicated to supporting evidence-based policies to drive innovation and Western techno-economic leadership, ITIF is particularly concerned that the DMA will not just continue to have adverse consequences for innovation and consumer welfare, but—through its intentional targeting of America’s leading technology companies—will also place undue strains on a transatlantic alliance that is essential to countering China’s quest for global techno-economic dominance. As ITIF has explained, for Europe:

[D]eeply aligning with the United States (creating a “G2”), is the only course that will be effective in countering China. This means the United States and the EU dialing back recent protectionist actions, including U.S. steel tariffs (for which both the Trump and Biden administrations have been completely in the wrong on) and EU “digital sovereignty” actions that discriminate against U.S. firms. The two regions should however go much further and resurrect and pass a Transatlantic Trade and Investment Partnership that would eliminate all tariffs on products traded between nations and eliminate most if not all regulatory barriers to trade and investment. On top of this, both regions should establish much closer cooperation in areas of science and technology, foreign development assistance, and commercial counterintelligence against China. And most importantly the two regions should create a “demand alliance” focused on advanced technologies or inputs which would insulate markets from unfairly produced Chinese goods.[28]

Question 16. Impact and Effectiveness

Do you have any comments in relation to the impact and effectiveness of the DMA?

While the DMA remains in its infancy, early evidence concerning its impact and effectiveness suggests that it is already doing substantial damage to the European economy. For example, one report from LAMA Economic Research found that the DMA could result in revenue losses of up to €114 billion, or 0.64 percent of the total turnover of the regulated sectors.[29] This finding is consistent with, as ITIF has noted, the observations of “leading European economists, legal scholars, and consumer advocates warn[ing] that [the DMA] is degrading user experience, stifling innovation, and placing new burdens on smaller firms, all while jeopardizing Europe’s global competitiveness and straining ties with the United States.”[30] Indeed, these observations include admissions by leading advocates of digital antitrust regulation that the DMA’s purported benefits of limiting the power of gatekeepers are few, if any, with one leading voice stating that the DMA is “not a real challenge to the platforms’ core status” and promotes “mostly competition on the platform, not competition to the platform.”[31] At bottom, while resulting in myriad harms to the European economy, concrete evidence of the supposed benefits of the DMA remains lacking.

Question 17. Further Comments or Observations

Do you have any further comments or observations or concrete examples on how the DMA has positively and/or negatively affected you/your organisation?

Unfortunately, but consistent with Europe’s soft power—and in particular with respect to shaping competition policy standards around the world—a “Brussels Effect” has resulted in the DMA becoming a global model for digital antitrust regulation.[32] As such, the European Commission may be said to have a special responsibility to ensure that its competition policy, especially in the digital sphere, is both conducive to the continued development of the digital economy worldwide and does not serve as a justification for the global targeting of Western technology companies to the benefit of China, whose own digital champions are increasingly the primary beneficiaries of digital antitrust regulation.

Thank you for your consideration.

Endnotes