President Joe Biden’s administration has refrained from pressing the European Union (EU) about its new law weighing heavily and disproportionately on American tech companies, The Washington Post reported on Thursday.
The EU’s Digital Markets Act (DMA) officially came into effect Thursday and imposes penalties of up to 20% of a company’s yearly revenue for repeated violations. The DMA is antitrust regulation primarily targeting dominant platforms in the EU, mostly American companies like Alphabet, Apple, Amazon, Meta and Microsoft; but the Biden administration did not firmly challenge the EU to mitigate potential detrimental impacts of the legislation on U.S. firms, according to the Post. (RELATED: The EU’s New Tech Law Could Threaten Americans’ Speech Online)
Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft.
These large, systemic online platforms were designated as gatekeepers under the Digital Markets Act, our solution to ensure fair and open digital markets.
From midnight, they must abide by our rules ↓#DMA #DigitalEU
— European Commission (@EU_Commission) March 7, 2024
Industry groups sent a letter to the White House warning about the law, asserting “the DMA’s regulatory cudgel is pointed squarely at five leading American companies.” The Biden administration reportedly sent two letters to the EU expressing worries but it did not take a tough stance against it, individuals familiar with the situation told the Post.
The DMA targets “gatekeepers,” which are platforms that “provide an important gateway between businesses and consumers in relation to core platform services,” according to the European Commission. The DMA prohibits companies from operating in the EU in a way that gives their products and services special advantages, such as in app stores, search engines and web browsers. For instance, the DMA makes it illegal to compel companies to use a platform’s payment system to be on its app store, according to the EC.
“The Biden administration has made an intentional decision, and concerted effort, to work with the European Union,” Jorn Fleck, Europe Center senior director at the Atlantic Council, told the Post. “Not just ‘Europe’ writ large, not just through NATO which is the traditional go-to, not just through the bilateral relationships with key countries in Europe, but specifically also with the E.U.”
One letter notes the Biden administration’s opposition to the law targeting American companies, but does not contain warnings about it, based on the contents reported by Politico.
“We oppose efforts specifically designed to target only U.S. companies,” it states.
The Biden administration prioritized collaborating with the EU on the war in Ukraine over safeguarding American tech companies, according to the Post.
“The Ukraine situation has sucked the oxygen out of the room,” a U.S. industry executive told the Post. “The Biden administration has worked very hard to get the Europeans and the U.S. on the same page when it comes to national security type issues.”
Democratic lawmakers advocated for the president to enable the EU to enforce the DMA on American companies because it aligns with the Biden administration’s antitrust agenda, according to a December letter.
“The framework of the DMA is designed to target only companies that have a significant impact on the EU internal market, that operate as an important gateway for business users to reach end users and that have – or will have in the near future – an entrenched and durable position for their core platform services,” an EC spokesperson told the Daily Caller News Foundation.
The White House did not respond to the DCNF’s request for comment.
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