The Brussels Effect Comes for Big Tech
Although US officials are finally waking up to the need to govern the digital economy, America's laissez-faire approach has left the door wide open for the European Union to step in as the global rule-maker. And with two new landmark regulations, the EU has set its sights squarely on the US tech giants.
NEW YORK – The European Commission has just unveiled landmark regulations for the digital economy, setting yet another global standard. The Digital Services Act (DSA) and the Digital Markets Act (DMA), designed to curtail the power of Big Tech, will have a far-reaching impact on the business practices of Apple, Amazon, Facebook, Google, and other primarily US-based giants. The European Union is expected to designate these companies as the “gatekeepers” of the Internet, justifying a targeted regulatory push to rein in their outsize market power.
The new regulations will complement the EU’s antitrust authority, which has repeatedly been used to extract billions of dollars in fines from US tech giants and to mandate changes to their business practices. Under the DMA, for example, practices such as self-preferencing will be “blacklisted” – presumed illegal without the need for the EU to bring an antitrust challenge to demonstrate harm to competition.
The DSA, for its part, will impose more onerous obligations on Big Tech companies to disclose their algorithms or remove illegal or harmful online content, including hate speech and disinformation. Together, these measures will assert significant new regulatory control over the digital economy both in Europe and beyond.