Earlier in the month, the House Judiciary Antitrust Subcommittee addressed the spreading epidemic of foreign competition laws and their impact on U.S. technology markets. The hearing underscored how digital regulation models developed abroad are spreading globally and imposing real costs on innovation, security, and small businesses.
The hearing, “Anti-American Antitrust: How Foreign Governments Target U.S. Businesses,” focused heavily on the European Union’s Digital Markets Act (DMA), but made clear that the DMA is no longer confined to Europe. It has become a regulatory template that other governments are copying, with immediate consequences for small businesses that rely on stable, secure, curated online marketplaces (COMs) to reach customers.
From Brussels to Seoul, One Regulatory Model Keeps Reappearing
The DMA was introduced in the EU as a narrow competition law aimed at a handful of large platforms, but it has evolved into a far broader regulatory model that reshapes how digital products and services are distributed globally. That reality came into focus during a recent trip by a congressional delegation to Brussels, referenced by Chairman Jim Jordan (OH-4) during the hearing, where Members of Congress met with companies, including ACT members, navigating DMA compliance. Our member companies delivered a consistent message of their experiences with shifting obligations, unclear standards, and mandates that interfere with core platform functions. When COM rules become unstable and unpredictable, small businesses face real operational challenges in launching products, protecting consumers, and reaching global markets. The end result: cost increases and quality decreases.
That same pattern is now emerging beyond Europe. South Korea’s proposed Fairness Act illustrates how DMA-style regulation is being repackaged elsewhere. While the Fairness Act is not described as purely ex-ante regulation, its structure tells a familiar story. Like the DMA, it relies on broad presumptions of wrongdoing, vague enforcement standards, and expansive regulatory discretion over COMs.
In some respects, Korea’s proposal could prove even more disruptive. Unlike transparency-focused approaches such as the EU’s Platform-to-Business regulation, the Fairness Act blends presumptive prohibitions with open-ended enforcement authority. That combination invites uncertainty, politicizes decision-making, and encourages behind-the-scenes bargaining. Small businesses lack the resources to navigate that environment, let alone influence it.
As Rep. Darrell Issa (CA-48) observed during the hearing, digital competition operates in global markets, and when governments attempt to regulate those markets, the effects are not confined to national borders. Those decisions shape outcomes for companies, workers, and consumers worldwide, including in the United States.
Congress Has Seen This Model Before
Several Members drew a direct connection between the DMA and past U.S. legislative proposals. Rep. Becca Balint (VT-AL) noted that the DMA closely resembles previously introduced legislation in Congress, such as the American Innovation and Choice Online Act (AICOA), which Congress ultimately rejected after hearing from small businesses across the country.
That comparison is accurate. Both frameworks rely on broad conduct bans untethered from demonstrated harm. Both restrict platform services that small developers depend on for secure distribution, consumer trust, and global reach.
ACT has said it plainly before. For small businesses, AICOA was DMA by another name. The hearing reinforced why that lesson still matters. Policymakers around the world are recycling the same regulatory template, despite mounting evidence that it raises costs, slows innovation, and entrenches uncertainty.
Rep. Lou Correa (CA-46) captured the broader dynamic succinctly during the hearing when he remarked that the U.S. innovates, China imitates, and the EU regulates. That line echoed what Members of Congress heard directly from ACT member companies during meetings in Brussels earlier this year.
The Costs to Small Businesses Are Real
When governments impose region-specific mandates on global platforms, distribution becomes more complex, security standards weaken, and compliance costs crowd out investment in new products. Over time, that fragmentation erodes the very innovation these laws claim to protect.
The impact of these policies is measurable. ACT’s survey of EU, UK, and U.S. companies shows that ex-ante digital regulation is already delaying access to advanced AI tools, forcing feature downgrades, and postponing product launches. Many small firms report six-figure annual losses tied directly to regulatory delay and uncertainty.
Regional analyses, including SEAPPI’s work on digital platform regulation across APEC economies, reach the same conclusion. Rigid COM mandates reduce flexibility, raise barriers to entry, and disproportionately disadvantage startups and small and midsize businesses.
U.S. antitrust and consumer protection laws already provide strong, flexible mechanisms to protect competition and consumers. Replacing those tools with sweeping mandates risks doing more harm than good, particularly for the small businesses these policies purport to help.