The European flag and logos of mobile apps are displayed in this illustration picture taken December 3, 2019.

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The European Union renews its offensive against US technology firms

Gary Clyde Hufbauer (PIIE) and Megan Hogan (PIIE)

Policy Briefs 22-2
Photo Credit: REUTERS/Regis Duvignau

Revised February 22, 2022, to correct errors in table 1 on the status of five firms: Deutsche Telekom, Yahoo, Vivendi, Zalando, and Zoom.

Some of the companies cited in this Policy Brief are past or present contributors to the Peterson Institute for International Economics, including Google, Amazon, and Facebook. They had no role in funding or approving this paper for publication.

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The European Union's proposed Digital Markets Act (DMA) contemplates extensive regulation of "gatekeeper" digital platforms—firms that perform a "core platform service" in the European Union (defined as online intermediation, online search, social networking, video sharing, electronic communication, cloud services, or online advertising), have a significant impact on the EU internal market, serve as an important gateway between business users and end-users, and enjoy an entrenched and durable position.

Although at least one European firm could qualify as a gatekeeper, Hufbauer and Hogan say, the DMA discriminates against American technology firms by singling them out for the label of "gatekeepers." The European Commission’s proposed DMA targets both US tech giants such as Google, Amazon, Facebook, Apple, and Microsoft and smaller (albeit huge) US tech firms such as Airbnb and PayPal. The authors say the EU goal is to confer competitive advantage on European digital firms, breaching the EU commitment to national treatment of foreign firms, violating their intellectual property rights, and imposing high expenses on the "gatekeepers." At the same time, France is planning to enact its own steep barriers against US and other foreign cloud services.

Data Disclosure:

The data and sources in table 1 in this analysis are available here.

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