It is called the “Brussels Effect.” A revolutionary regulation adopted by the European Union spreads around the globe. It happened with General Data Protection Regulation and privacy. It now looks set to happen with the DMA, designed to rein in the world’s largest digital gatekeepers, from Alphabet to Microsoft. In nearly every case, it is just US firms that are impacted.
Governments around the globe are gearing up to impose their own versions of the DMA. Some, like in Japan, are more focused and targeted than in Europe. Others, such as surprisingly the UK, could end up being broader. The US stands out for its reliance on old-fashioned antitrust laws.
The copycats are coming even before Europe’s own law goes into effect — and before its impacts can be measured. Critics have raised serious questions regarding security and quality control.
Here’s a rundown of the most notable initiatives:
- Japan: In contrast to the broad sweep of the UK, Tokyo is targeting a few narrow markets – and principally one, app stores. Legislation scheduled to be sent to parliament this year would empower the Japan Fair Trade Commission to force Apple and Google to allow third-party app stores and payment systems. Details will be worked out this spring.
On search, the proposed legislation could stop Google from giving preferential treatment to their own services, putting its own flight-booking or restaurant reservation tools at the top of search results.
No Japanese company reportedly will come into scope. - United Kingdom: Before Brexit, the UK positioned itself as breaking free from EU digital overregulation. Instead, it has emerged as a tough policeman, threatening to break encryption on messaging apps and engaging in a major expansion of its antitrust authority’s powers to tackle digital market leaders.
Under the Digital Markets Competition and Consumers Bill, expected to become law this year, the largest tech firms determined to have “strategic market status” would be required to open up their data to rival search engines, overhaul their app stores, increase their battle against fake online reviews, and loosen their subscription lock-ins. Like with the DMA, the goal is to reduce the “excessive dominance” that a small number of tech firms hold over consumers and businesses. Companies that fall foul of the new law would face fines of up to 10% of global turnover. The Digital Markets Unit of the UK antitrust enforcer will decide what firms to designate as single market status.
All in all, the new bill looks and sounds like the EU’s DMA — even tougher in some respects. While the DMA excludes certain concentrated markets such as video streaming and certain specific businesses such as Amazon Prime from scrutiny, the UK bill could end up including them.
- South Korea: The Korea Fair Trade Commission announced in December 2023 an act on the “Promotion of Platform competition” modeled on the DMA. In addition to targeting US tech, it included South Korea’s own internet conglomerates such as the search engine Naver and the messaging app Kakao.
Like the DMA, the Fair Trade Commission said the law would designate certain dominant platforms and limit their activities. The proposed act follows a 2022 amendment to Korea’s Telecommunications Business Act to prevent large platforms, especially Apple and Google, from requiring developers to use their in-app payment systems.
However, after backlash from the South Korean industry and the US government, the bill has now been delayed. - Brazil: South America’s largest country is a copycat. Its proposed Bill 2768 mimics the DMA, making companies with “crucial access control power” (i.e. “gatekeepers” in European parlance), subject to loosely defined rules and obligations. At present, the bill awaits an opinion from a parliamentary rapporteur. US tech advocates have expressed strong opposition.
- Mexico: Instead of broad regulation, Mexico is focusing on e-commerce. Its competition authority, issued a preliminary report that singles out two marketplaces, Mercado Libre and Amazon, which hold a combined 85% share of the e-commerce market, The regulator proposes that these platforms separate video streaming from online shopping loyalty programs such as Prime, increase transparency so that sellers better understand how products are selected and ranked in search results, and end the preferences given to products from sellers who use the company’s own logistics services.
- Turkey: A draft revision of the Turkish Competition Act is expected to be passed this year. Like the DMA, it targets “undertakings with significant market power.” Prohibitions include bans on self-preferencing and on tying different digital services together. Messaging services would be required to become interoperable with other apps.
- South Africa: In July 2023, the South African Competition Commission released a report on “online intermediation platforms.” Among other services, it targets Google and Apple’s app stores and demands that consumers be allowed to pay for services outside of the App Store.
- India: The government is contemplating a new DMA-styled regulatory approach to apply to “systemically important digital intermediaries.” But no official announcements have been made.
- Australia: A five-year inquiry into digital platform services will only be finalized in March 2025.
Although the US is almost alone in not moving forward with new regulation, it is unleashing antitrust action against large tech firms, with uncertain results. Europe rejected this course, arguing that antitrust was too slow and ineffective to inject competition into fast-concentrating digital markets. Governments across the globe are following Brussels down this uncertain path. Washington should sit up and take notice.
Bill Echikson is a CEPA non-resident senior fellow and editor of the Bandwidth blog.
Maria Hadjicosta is an intern for CEPA’s Digital Innovation Initiative.
Tech is bracing for a regulatory reckoning. On March 7, the largest online platforms will roll out changes mandated by the Digital Markets Act, the most sweeping tech legislation since the European Union passed the GDPR privacy law in 2018. In this special series, Bandwidth looks at the DMA legislation, its motivation, its implications, and its challenges.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
