By Asheesh Agarwal

Around the world, countries face a crucial policy choice that could impact millions of consumers, the pace of innovation, and even the global geopolitical balance.  One path follows the United States, which regulates with a light touch and has thus fostered the most dynamic economy in world history; the other follows Europe, whose heavy regulations have led to stagnation and decline.  These choices will determine which countries, and which set of values, build the future.

Earlier this year, Europe implemented the Digital Markets Act, an ex-ante regulatory regime that imposes significant burdens on select “gatekeepers,” almost all American companies. For instance, the DMA constrains “gatekeepers” from integrating their product offerings and requires them to provide their competitors with proprietary information and competitive expertise. 

In contrast, the United States maintains a light-touch system that focuses on consumer welfare and intervenes only afterwards if the evidence shows that a company’s conduct harms consumers, a high standard.  The Unites States allows larger companies to compete in new product markets, invest in start-ups, and grow organically without artificial restrictions. To date, progressives have failed to persuade Congress or any state to change their laws and have met with limited success in the courts.

Now that Europe has sneezed, however, the world is catching cold.  From Brazil to Turkey to India to South Korea, many countries may follow Europe down the DMA road. Their governments seem less driven by protectionism, a key driver of Europe’s law, or by meaningful concerns about the prices or choices available to their consumers online, than by a sense of “Regulatory FOMO,” fear of missing out on a powerful set of new regulatory tools. After all, what policymaker doesn’t want to be seen as “doing something,” particularly with respect to an economic sector that produces enormous growth and touches billions of lives? 

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