Leadership Blog - March 1, 2024

EU’s DMA Unfairly Discriminates Against American Companies 

By Chip Pickering, CEO, INCOMPAS

In the fall of 2023, the European Commission (EC) designated six companies as so-called “gatekeepers,” requiring these businesses to submit plans by March 6, 2024, to comply with the European Union’s (EU) new digital regulatory regime, the Digital Markets Act (DMA). Conspicuously, the list of gatekeepers released by the EC disproportionately targets American companies while excluding European and most other foreign-based companies. 

In the United States, the DMA has been widely criticized by industry experts and lawmakers on both sides of the aisle, including 21 members of Congress who sent a bipartisan letter to President Biden urging his administration to ensure EU policymakers enforce fair digital policies. Inaction, they warn, poses a serious threat to the US economy, national security, and innovation.

According to the Center for Strategic and International Studies, it’s estimated that this particular portion of the EU’s digital agenda will cost American businesses $97 billion, including $45 billion for small businesses, and the DMA threatens products and services that help Americans cut costs. Additionally, aggressive regulatory actions threaten American jobs, and startups fearing overregulation have already voiced concerns that the EU’s digital agenda could have a chilling effect on innovation, hurting competition and consumers. 

With U.S.-based companies restricted in their ability to innovate and operate abroad, our country risks falling behind on the world stage, a fact that has serious potential to damage America’s competitiveness and security interests.

Unfortunately, the DMA’s discriminatory measures are part of a larger trend of foreign governments unfairly singling out U.S.-based businesses, actions that risk far-reaching harm to American consumers, innovation, and global leadership. This worrying pattern should encourage leaders in the Biden administration to strongly push back on international competitors working to disadvantage innovative American companies.