Will the United States Adopt Europe’s Digital Markets Act?

Technology Policy Brief #56 | By: JA Angelo | April 3, 2022

Header photo taken from: Electronic Frontier Foundation




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E.U. Takes Aim at Big Tech’s Power With Landmark Digital Act.

Photo taken from: The New York Times

Policy Summary

The European Union continues to lead the way in developing tech policies. In its most recent efforts, the EU passed the Digital Markets Act regulating big tech firms’ efforts to monopolize e-commerce, digital advertising, app stores, and other digital tools we rely on daily to organize our lives. The new law means that Google can no longer send targeted ads without its user’s consent and that Apple would need to offer mobile apps outside of the App Store. Violators of this legislation could be fined up to 20 percent of the company’s global profits. This could result in tens of billions of dollars. European standards are typically adopted around the world.

The Digital Markets Act was passed in large part in response to  Silicon Valley dominating the Information Age. Watchdog groups mentioned the legislative efforts of lobbyists to water down the new law and the Biden administration’s efforts of stating that the Digital Markets Act targets American companies. This European regulation is applicable to those corporations whose market cap is over 75 billion euros, or $83 billion. The list includes Alphabet, the owner of Google and YouTube; Amazon; Apple; Microsoft; and Meta, the parent company of Facebook and Instagram.

Policy Analysis

Although, both sides of the aisle in Congress have held high profile technology policy meetings, neither side has introduced digital media legislation to address tech giants unchecked powers amid the numerous antitrust cases filed against Google and Meta.

The United States has also not, thus far, adopted any European legislation addressing the digital world. This is in part likely due to tech giants lobbying Congress for these tech firms to maintain control over the digital marketplace.After all, these firms answer to their stakeholders. The absence of Congressional regulation  minimizes the marketability of smaller mom and pop companies from profiting in the ever growing digital world.

The only way these smaller businesses have a shot at offering apps and other digital means to consumers is if the United States passes a set of digital regulations similar to those passed by the European Union. This would enable smaller firms to develop digital products at a fraction of the cost the tech giants offer. Well designed federal regulation can eliminate the tech monopolies and increase competition.

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The Digital Markets Act is one of our best tools to resist to information wars.

Photo taken from: EURACTIV, Shutterstock / Twin Design

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However, one could argue that there are too many scams out there and that consumers prefer trusted tech giants. In the end, we as consumers, will likely continue padding C-level (CEO, CFO, COO etc.) executives pockets;  perhaps driving these small firms out of business.

Engagement Resources​

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To advocate for the Digital Markets Act, The Information Technology Industry (ITI) Council, is one trade association that aims to provide fair competition in the digital world. You can find out more or donate to its cause at optics.org

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Critics of the Digital Markets Act include the Chamber of Progress. The CEO of this trade group mentioned that the legislation targets United States businesses and will affect the American workforce. You can find out more about this group or donate to its cause at progresschamber.org.

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