Digital Markets Act: Is the European Union Taking the Lead?

The European Commission published on December 15 its Digital Markets Act, a new text aiming at regulating the digital economy and limiting the gatekeeping power of large digital players. Institut Montaigne launches today a series of articles to analyze the stakes behind the new regulation. In this first article, Gilles Babinet, Advisor on Digital Issues at Institut Montaigne, and Dr. Alina Polyakova, President and CEO of the Center for European Policy Analysis (CEPA), share their views on new digital regulations, from both a European and American perspective.  

What is the European Union’s approach to the dominant position of large digital platforms? 

Gilles Babinet: This is a broad question that must be answered first by referring to the different opinions that may be expressed within different parts of the European Commission. There are several schools of thought. On the one hand, there are those who think that platforms structurally include biases (competition, hate speech, taxation, etc.) that should be dealt with in depth. On the other hand, there are those, more interventionist, who think that the dynamism of European technological players will be insufficient to catch up with the advance taken by large American meta-platforms, and that it is therefore necessary to create the conditions enabling European players to fill the gap. The latter are highly supportive of very bold industrial policies and, of course, they are carried by today’s general attitude towards foreign technology companies. 

The change in the US administration, however, creates a zero-gravity moment, whereby it becomes difficult to choose between either of these approaches. If the United States sends signals that point in the direction of lowered trade conflicts and closer cooperation with Europe, it is likely that those who advocate for a reduction in competition from outside Europe through regulation will be outvoted. If not, in the context of a recovery which is proving to be laborious, it is possible that the EU will look to confine American technological players. Overall, the European remain realistic: they know that they are not in a position to impose unilateral regulations on technology, much less to demand the dismantling of American platforms. Things would probably have been different if Europe had not fallen so far behind on these issues - and had built its own meta-platforms.