Washington puts pressure on Europe over upcoming Big Tech regulation

A senior figure in the United States government has written to one of the key players in the European Parliament to defend the position of major tech companies that could find themselves impacted by upcoming new legislation.

The Financial Times reported that a letter signed by Arun Venkataraman, counselor to US Commerce Secretary Gina Raimondo, to chief European negotiator Andreas Schwab, sets out Washington's concerns surrounding the implementation period for "this complex regulation" called the Digital Markets Act, or DMA.

Writing in the European Parliament magazine in December, Schwab said the DMA "is an opportunity to transfer the rules of the social market economy to the digital space".

"We have learned from the many protracted EU antitrust cases against the largest digital platforms over the last 10-15 years that the current EU competition rules were unable to promptly and appropriately address the issues," Schwab said.

The new rules, he said, would "establish a catalog of proven anticompetitive practices that will automatically be forbidden in future". This would put a burden of proof on Big Tech companies "to prove that they are not behaving in a way that harms the market …with these requirements for gatekeepers, more competition and innovation in digital markets will be possible, to the benefit of SMEs, European digital startups and European consumers".

New rules

European Union member states and the European Commission want the new rules to apply to companies with a market capitalization－a simple calculation of a company's worth－of at least 65 billion euros ($74.2 billion), a category into which many of the most well-known US tech firms would fall under.

Meta, the company that owns Facebook and Instagram, has already threatened to remove the services from Europe because of concerns on how the DMA could affect its business.

Venkataraman's letter requested "the EU use scoping criteria that do not discriminate against US firms in law or in fact, including by ensuring that meaningful European and foreign competitors of covered US firms be brought within the ambit of the DMA". It also raised security concerns.

But in his reply, Schwab suggested that these were a smoke screen. "As policymakers, we have also to make sure that such concerns are not artificially created to hide behind," he wrote.

European Commission President Ursula von der Leyen has long been a fan of reining in the power of Big Tech companies and making them responsible for the editorial content on their platforms, which will be covered by a separate law known as the Digital Services Act.

When US President Joe Biden took office at the start of last year, von der Leyen said: "Europe is coming forward with these standards, but I am convinced that the US will be attentively listening because Joe Biden has always been a politician who was cherishing the rules-based order."