The thing about the free market is that it works, for all the laissez faire flag-waving, only when a fair and transparent regulatory framework is in place. And nowhere is this more apparent than in the internet-driven contemporary world. On 25 March, Europe twigged.

The governing bodies of the European Union (EU) on that date reached an agreement on oversight of dominant internet platforms such as Apple, Meta (Facebook), Alphabet (Google), Amazon, and Microsoft. The impact of the Digital Markets Act (DMA) will be global and not limited to EU member states given the interconnected nature of the internet.

The law is set for formal adoption in October and will take effect in 2digital marklets023. America, where the internet was invented and which is home to these platform companies, failed to address the policy issues associated with the internet. This has now cost the world’s most powerful nation its claim to international policy leadership; experts agree that Washington’s failure to develop rules for the most powerful and pervasive platforms in the history of the planet left the field wide open for others while simultaneously costing it a meaningful voice in decision-making.

The forthcoming EU legislation will have massive consequences for American digital platform companies which have been fighting domestic regulation on the pretext of free speech and the free market. They will now have to deal with rules, even if protectionist, made by other nations. But they have only themselves to blame.

The companies have been raking it in by riding on a ubiquitous internet that allowed them to ‘make it once and sell it everywhere’… now, the same network that created the economic miracle has become the network whose ubiquity imposes rules even if the companies operate outside of the EU, technology and governance expert Tom Wheeler wrote recently analysing the impact of the DMA. Make no mistake, the new European law addresses the real problems with an unregulated internet.

For one, it is targeted at gatekeepers, or companies that operate a core platform which is utilised by others and are dominant in their space. The DMA prohibits these companies from using their gatekeeper power to limit the ability of others to compete. This would include severe restrictions on self-preferencing, so Amazon would not be allowed to use the information it sees about third party transactions for services and products it offers; similarly, Google would not be able to prefer its own shopping service in search results.

Further, Apple’s iOS and Google’s Android would be required to allow consumers to uninstall preloaded apps, including app stores, and app developers would no longer be forced to use the Apple or Google payment systems and identity functions (that come with an extortionate fee). Messaging apps such as WhatsApp would have to accept interoperability, which is to say allow interconnection.