In March, European legislators agreed to a framework for the Digital Markets Act (DMA), which would regulate “gatekeepers”—such as Amazon, Apple, Google, Meta, and Microsoft—in the digital economy to prevent them from engaging in practices that could produce anticompetitive harms. In a new insight, Director of Technology and Innovation Policy Jeff Westling breaks down the reported deal and its potential impact on American businesses, and warns U.S. lawmakers against imposing similar restrictions.

Key points:

• Business practices that produce anticompetitive harms in the digital marketplace could justify antitrust scrutiny, but the opaque process and goals of the DMA suggest that European regulators have dismissed concerns over this legislation in favor of simply targeting companies that, they argue, have grown too large.
• The DMA will have significant implications for the welfare of consumers as well as the cybersecurity of devices and services in Europe and across the globe.
• U.S. lawmakers should work with their European counterparts to address these concerns in the final text of the legislation and be wary of attempts in the United States to impose similar restrictions without a careful balancing of the costs and benefits.

Read the analysis