Bipartisan congressional representatives have sent a letter to President Joe Biden, demanding action over what they claim is the unfair targeting of US tech companies by the European Union’s Digital Markets Act (DMA).
The letter [PDF], signed by 22 congresscritters, complains that, out of six gatekeepers designated earlier this year under the DMA, five are based in the US and none in the EU.
“The EU has the right to regulate the digital economy,” the group concedes, “but the EU’s ‘digital sovereignty’ agenda has repeatedly applied one set of rules to American companies and a different, more favorable set of rules to European and other foreign firms, including Russian and Chinese firms.”
The DMA, one half of the EU’s new dynamic tech enforcement duo with the Digital Services Act (DSA), regulates technology companies that do business in the bloc that have the size to limit the ability of third parties, be they smaller businesses or consumers, to do business online through the reach of their technology.
Gatekeepers, per the European Commission, are companies that “provide an important gateway between businesses and consumers in relation to core platform services.” In September, the EC designated six companies with wide-reaching services as gatekeepers: Google parent company Alphabet, Amazon, Apple, Meta, Microsoft, and Chinese TikTok parent ByteDance, the only non-US tech company to be labeled a gatekeeper.
The representatives also took umbrage that large Chinese tech companies like Tencent, Alibaba, and Huawei weren’t included as gatekeepers, “despite the fact that they are competing aggressively with US firms in the EU and other markets.” This, however, belies a misunderstanding of how DMA gatekeeper status is awarded.
Under the DMA, gatekeepers have to achieve a certain annual turnover in the European Economic Area, or provide its core platform services to at least 45 million monthly active users and more than 10,000 yearly active businesses during the last three years. Tencent, Alibaba, or Huawei are unlikely to meet that threshold in the EU.
The Commission declined to comment but did say, “all companies active in the EU are subject to EU rules, irrespective of their place of establishment.”
Apple, Meta, and ByteDance have all contested their inclusion as gatekeepers under the act.
- Big Tech revenues under threat from EU law proposals
- Microsoft seeks EU Digital Market Acts exemption for underdog apps like Edge
- In quest to defeat Euro red-tape, Apple said it had three Safari browsers – not one
- Europe’s tough new rules for Big Tech start today. Is anyone ready?
“The EU inexplicably failed to designate any European retailers, content-sharing platforms, payment firms, and telcos as ‘gatekeepers’ even though many have a greater national segment of the European market than the US firms,” the US representatives said in their letter.
Another sticking point is the fact that Samsung and its Internet Browser installed on Samsung Galaxy devices wasn’t designated as a gatekeeper despite meeting the threshold. The EC said in September that Samsung Internet Browser, as well as Gmail and Outlook.com, weren’t designated as core platform services because “Alphabet, Microsoft and Samsung provided sufficiently justified arguments showing that these services do not qualify.”
Samsung, having no other skin in the game, wasn’t otherwise included, while Alphabet and Microsoft’s other core platform services meant they stayed on the gatekeeper list.
“The DMA as currently implemented unfairly discriminates against US companies, fails to protect consumers or to increase competition, and ultimately makes America less globally competitive and less secure,” the representatives said.
“We strongly urge you to advocate for American companies and workers by insisting that EU policymakers administer and enforce their digital policies fairly,” the representatives asked of Biden, seemingly oblivious to the fact that, of the ten largest tech companies in the world, six of them are headquartered in the United States.
The representatives asked Biden to investigate how the EU’s digital sovereignty agenda “may damage American economic and security interests,” secure commitments from EU leaders that the bloc “will cease developing or implementing measures that discriminate against American companies,” and encourage DOJ and FTC officials in the EU to demand that the DMA doesn’t “inequitably discriminate against American companies.”
The White House didn’t immediately respond to questions for this story. ®
