BRUSSELS—In response to the European Commission unveiling the Digital Services Act (DSA) and the Digital Markets Act (DMA), the Center for Data Innovation released the following statement from Senior Policy Analyst Eline Chivot:
The EU’s attempts at digital policy too often undermine its efforts to become a leader in the digital economy. By focusing on regulation instead of innovation, today’s announcement doubles down on this failed track record. The proposals would codify two dangerous ideas: That foreign firms threaten European values and that large online platforms undermine competition. Neither is true.
Singling out the biggest and most successful companies risks disincentivizing European start-ups seeking to expand their market share. Prohibiting practices such as self-preferencing by platforms will undermine existing business models, leading some companies to reduce their offerings in Europe and damaging the quality and convenience of popular products and services for businesses and consumers.
Restrictions based on arbitrarily defined criteria that disproportionately target large U.S. tech companies may undercut efforts to restore transatlantic relations and to cooperate in countering Chinese dominance in the digital economy.
The objectives of the DSA and the DMA are salutary, harmonizing rules across the digital single market and modernizing liability rules that are nearly two decades old. But the proposed interventions are radical and disruptive, and they will likely have far-reaching, unintended, and unpredictable consequences.
Without substantial revisions in these two legislative proposals, the EU will have only succeeded in shooting itself in both feet.