The EU's Digital Markets Act was supposed to give European citizens more choices. Instead, people get worse technology.
In the name of fairness and competition, Europe has enacted laws that exclude its citizens from access to the most advanced technology globally.
For example, Apple’s newly announced artificial intelligence assistant Siri AI will be available on iPhones and iPads this autumn in London and Toronto but not in Paris or Berlin.
This heavy-handed European tech regulation has resulted in the absence of a European Google, Apple or a competitive European AI rival. Instead, it has only produced the world’s most sophisticated machinery designed to stifle innovation.
Brussels maintains that the decision is solely Apple’s and that nothing within its flagship Digital Markets Act prohibits the launch. While technically accurate, this point is irrelevant.
The law mandates that upon the arrival of Siri AI in Europe any rival AI agent must gain identical access to a user’s messages files and chat history. Apple proposed implementing a software security layer to ensure this safety and suggested a phased rollout to achieve this.
According to Apple, the European Commission rejected the proposal.
The Digital Markets Act (DMA) was intended to open up markets. However, its legal framework emerged during the era of browsers app stores and messaging apps where these components could be easily swapped like batteries. An AI assistant, on the other hand, is deeply integrated into the operating system and accesses sensitive personal data. Security researchers have repeatedly demonstrated that it can be compromised.
Technology evolves rapidly and the DMA is already lagging behind.
Europe’s General Data Protection Regulation (GDPR), the DMA’s predecessor, was marketed as a tool to empower users and penalise tech firms. However, its implementation has been disappointing. Venture investment in European startups declined by about a quarter compared to the US in the year following the GDPR’s 2018 introduction.
Small businesses have been burdened with compliance costs while well-funded American tech giants, bolstered by their legal teams, consolidated their dominance. Even the privacy-compliance software industry, which developed in response to the GDPR, is dominated by American firms.
This situation stems from Europe’s aspiration to become a “regulatory superpower”. The goal was to create a market so large that it would, by virtue of its size, export its regulations to the global stage. However, this strategy has not been successful.
When adapting a product for the European market incurs higher costs than the benefits of access, companies simply omit the feature.
Former European Central Bank head Mario Draghi’s influential report to the European Commission clearly highlighted that Europe’s regulatory burden has become a hindrance to its competitiveness.
While bureaucrats in Brussels acknowledged the report and journalists praised it, no significant changes have been made.
It’s not too late to learn from these mistakes. Europe is wealthy, educated and capable of competing at the technological frontier. Some politicians are gradually realising this. However, it’s crucial for regulators to step aside and allow the market to function effectively
