The European Commission (EC) announced yesterday that it is imposing fines against several leading American technology companies under the Digital Markets Act (DMA). While these fines are framed as a push for fairness in digital markets, the idea of bringing European-style regulations into the United States has been applauded by some American policymakers. If they did similar style enforcement like this, after enacting similar regulation, it would risk undermining the digital products and services that millions of consumers around the world love and rely on every day.
Unfortunately, some U.S. lawmakers have eyed these European competition policies as a model for American regulations. That is a serious cause for concern. Importing a regulatory framework that emphasizes punitive measures over innovation could stifle U.S. competitiveness and slow progress in artificial intelligence and other emerging technologies.
Additionally, privacy and cybersecurity experts in the U.S. have warned that legislation introduced in Congress modeled after Europe’s competition framework presents concerns for consumers. These proposals target popular products that are integral to privacy, security, and productivity for American consumers. The forced changes required by these bills – for example, mandated interoperability requirements – may have unintended consequences for consumers that go far beyond competition policy.
Fortunately, most policymakers in the U.S. recognize the risks of copying Europe’s approach. The White House, for example, has pushed back on EU-style policies that would hurt American innovation and consumers. The better path forward is one that protects consumer welfare, fosters innovation, and ensures that American tech companies can continue to lead on the global stage. Rather than adopting restrictive frameworks from abroad, U.S. lawmakers should focus on forward-looking policies that encourage competition without dismantling what works.