9 June 2021

On 15 December 2020, the EU Commission released a proposal for a Regulation on Contestable and Fair Markets in the Digital Sector – referred as the ”Digital Markets Act” (hereinafter ”DMA”). The DMA intends to further materialize the European “techlash” on large U.S. tech companies referred as ”digital gatekeepers”. These digital gatekeepers (i.e., Google, Amazon, Facebook, Apple and Microsoft) allegedly engage in unfair practices and enjoy uncontestable market positions. The DMA ambitions to regulate the digital gatekeepers with stringent obligations and prohibitions. The European Commission justifies the DMA by the need to avoid regulatory fragmentation with Member States’ regulations at the national level.

This policy paper argues that not only does the DMA fail to fulfill its stated objectives, thereby lacking the necessary legal basis, but also that the DMA epitomises the prevalence of precaution over innovation in the digital economy. The DMA’s unintended consequences will result, among others, in a transatlantic divide whereas such partnership becomes urgent.