The Digital Services Act, the Digital Markets Act, and the new competition tool

European initiatives to hobble U.S. tech companies
Competition law Competition regulation Digital platforms International trade Innovation Legislation United States of America European Union

This paper reviews ongoing deliberations surrounding the EU Digital Services Act (DSA) and Digital Markets Act (DMA) and discusses possible implications of upcoming legislation for European innovation, the business models of U.S. companies serving European customers, and global digital services standards.

Currently, it appears that, in lieu of the Digital Services Act, the European Commission will present a package of two legislative proposals: the DSA, intended to strengthen the EU single market and clarify digital services’ responsibilities and liabilities, and the DMA, which will tackle the economic power of large online platforms (LoPs). The DMA will include ex ante obligations (prohibiting and requiring certain behaviours before regulators have evidence of actual harm in the marketplace) for LoPs acting as “gatekeepers,” as well as the New Competition Tool.

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