US Congress: "EU Digital Markets Act, Pinpoint Regulation to Check US Companies"

21 Bipartisan US Congress Members
Send Protest Letter to Biden Administration
"Harming US Economic Security Interests"

The European Union (EU) has implemented the 'Digital Markets Act (DMA)' to prevent market monopolies by big tech companies. However, bipartisan U.S. lawmakers have sent a letter of protest to the Biden administration, arguing that the act essentially serves as a targeted regulation to curb American companies.

[Image source=Reuters Yonhap News]

According to major foreign media on the 18th (local time), a bipartisan group of 21 House members gathered and sent a letter to the Biden administration stating that "the EU's Digital Markets Act harms the economic and security interests of the United States."

The bipartisan lawmakers expressed concerns that "the EU's legislation could weaken our global leadership in the digital domain and potentially jeopardize consumer security." They further urged, "The Biden administration must secure assurances from the EU that the Digital Markets Act will be enforced fairly."

The Digital Markets Act is a law designed to regulate certain large-scale big tech companies by designating them as 'gatekeepers' to prevent abuse of market dominance. The law is scheduled to take effect in March next year, targeting companies with at least 45 million active users per month, annual revenues of 7.5 billion euros (approximately 10.7 trillion KRW) over the past three fiscal years, and a market capitalization exceeding 75 billion euros.

Companies designated as gatekeepers will be prohibited from combining customers' personal information with advertising and other services without user consent. Failure to comply may result in fines amounting to 10% of global revenue, which can increase up to 20% for repeated violations. In September, the EU Commission designated seven companies as gatekeepers: Alphabet (Google's parent company), Amazon, Apple, ByteDance, Meta, Microsoft (MS), and Samsung. Samsung Electronics, which was considered a strong candidate, was ultimately excluded from the final list.

Within U.S. political circles, there are concerns that the law could be used to specifically target American companies. This is because, except for ByteDance, the parent company of TikTok, all gatekeepers are American companies.

In response to such concerns, the U.S. National Security Council (NSC) warned the EU in 2020, when the DMA draft was announced, that "limiting regulatory targets solely to American companies could weaken cooperative functions between the EU and the U.S."

Through this letter, bipartisan lawmakers also raised suspicions that the EU has explicitly designated only American companies as regulatory targets. They stated that it is unacceptable that Chinese companies such as Alibaba, Huawei, and Tencent are not classified as gatekeepers, and that the EU has been avoiding investigations into these companies.

Additionally, the lawmakers criticized the EU for not designating any domestic companies as gatekeepers. In the letter, they said, "It is difficult to explain why no retailer, platform, or telecommunications company within the EU has been designated," and added, "The Biden administration must demonstrate leadership regarding the DMA for the sake of our companies and American workers."