Correcting the Record: State of the Digital Markets Act

The SME Perspective

Brussels, Belgium – Today, the Association for Competitive Technology, a global technology small and medium-sized enterprise (SME) trade association with nearly three decades of experience advocating for pro-growth and pro-innovation policy environments, released ‘State of the DMA: The SME Perspective,’ a new analysis of how the implementation of the Digital Markets Act (DMA) is affecting small technology businesses across the European Union.

After two years of enforcement, there is little evidence of benefits reaching the SME community, and the European Commission’s report on implementation merely deferred to the interests of a small group of large complainants at the expense of the SME developers the DMA was written to help.

‘The second year of the DMA has been more of the same for SMEs’, said Mike Sax, founder and chairperson of the Association for Competitive Technology (ACT). ‘Far from delivering the promised boost to competition and innovation, DMA implementation has increased uncertainty for SMEs that leverage digital marketplaces and has harmed the European Union’s competitiveness writ large. The Commission’s Digital Markets Act Review Report was a missed opportunity to conduct a thorough analysis of the broader impact on the EU digital economy’.

ACT’s analysis identified four major areas of failure:

1. Increased regulatory uncertainty and compliance burden
2. Weakened curation, security, and trust in digital marketplaces
3. Increased costs of doing business
4. Delayed access to frontier technologies

‘The Commission’s “fit for purpose” conclusion is irreconcilable with the experiences of SMEs across Europe’, said Sax. ‘By relying on an analysis that does not reflect the SME community’s experiences and views, the Commission has substituted process metrics in place of outcome metrics, an approach that is bad for SMEs and for the EU economy’.

ACT calls on the Commission to:

• Clearly signal a pause on further extension of the DMA obligations to new services, markets, and technologies, particularly artificial intelligence and cloud computing
• Narrow enforcement to conduct for which there is concrete and demonstrable competitive or consumer harm
• Reopen the ‘fit for purpose’ review to incorporate evidence from SME outcomes
• Broaden and rebalance the weight of third-party evidence in gatekeeper obligations so that decisions reflect the full range of affected businesses including SMEs
• Build structured opportunities for SME and startup input into the regulatory dialogue

Access the full analysis at: https://actonline.org/post/state-of-the-digital-markets-act-the-sme-perspective/

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About the Association for Competitive Technology (ACT)

ACT is a global technology trade association representing startups, scaleups, small and medium-sized enterprises (SME). We work directly with our members worldwide to advocate for a policy environment that takes into account their real-world challenges and supports innovation, access to capital, job creation, and the ability of small technology companies to grow and compete globally.