Assessing Europe's Digital Markets Act One Year In

Audio of this conversation is available via your favorite podcast service.

A year ago, Europe’s Digital Markets Act—the DMA—had its first compliance deadline. The European Commission says the purpose of the regulation is to make “digital markets in the EU more contestable and fairer.” In particular, the DMA regulates gatekeepers, the large digital platforms whose position gives them greater leverage over the digital economy. One year in, how has the DMA performed? Do Europeans enjoy more choice and competition? And what are the new politics of the DMA as European regulations are contested by the Trump administration and its supporters in US industry?

To answer these questions and more, Tech Policy Press contributing editor Dean Jackson spoke to a set of experts following a conference hosted by the Knight Georgetown Institute titled “DMA and Beyond.” His guests include:

• Alissa Cooper, Executive Director of the Knight-Georgetown Institute (KGI)
• Anu Bradford, Henry L. Moses Professor of Law and International Organization at Columbia Law School
• Haeyoon Kim, a Non-Resident Fellow at the Korea Economic Institute (KEI), and
• Gunn Jiravuttipong, a JSD Candidate and Miller Fellow at Berkeley Law School.

What follows is a lightly edited transcript of the discussion.

Dean Jackson:

I'm Dean Jackson, a contributing editor with Tech Policy Press. On February 6 and 7, I attended a conference at the Knight-Georgetown Institute on Europe's Digital Markets Act, an important piece of antitrust regulation. Today, we bring you three segments featuring guests from North America, Europe, and other parts of the world to talk about approaches to antitrust in the tech sector, the implementation of the DMA to date, and the unexpected geopolitical headwinds facing Europe's digital regulations. Our first guest, Alissa Cooper, is the Knight-Georgetown Institute's executive director. Alissa, we're about a week out from what I thought was a really enriching set of conversations on the Digital Markets Act, which you hosted in DC. And I wanted to ask you, first to introduce yourself to the audience, but then second, to tell us what inspired you to organize that conference. Why is the DMA important? And if you could just talk a little bit at a high level about what you thought were some of the most interesting takeaways from the conference that you think people should know about.

Alissa Cooper:

Yeah, for sure. And thank you so much for having me. I'm Alissa Cooper. I'm the executive director of the Knight-Georgetown Institute, KGI, which is a new center at Georgetown University dedicated to connecting independent research with technology policy and design with a focus on the online information environment. I came to KGI last year to get it off the ground, and I was really motivated to come in part to work specifically on the concentration of corporate power over the means of information production and distribution. That's been a motivating factor for me in a lot of my work. And I think what we see now more so every day is how the struggle for that control is really at the center of this current political moment. It's really a time of tremendous upheaval as everyone can see and sense themselves. And when we were thinking about this conference and really the whole line of work on competition policy at KGI, we have two main objectives for that work.

One is to try to relate what we can learn from regimes abroad that are focused on competition policy and enforcement to the work of antitrust in the United States. The other one is to try to broaden the diversity of perspectives of disciplines and of expertise that are involved in conversations about competition policy and about corporate power over information ecosystems more broadly. I think we all see that these large platforms and the flow of online information is central to every aspect of everyone's lives now. And so, to really drill deep and understand how these, in some cases, novel regulatory regimes and instruments are affecting those information flows, how they're affecting the markets, how they're affecting the business arrangements that underlie the access that people have to information and online. That's what drives KGI's work on competition policy overall, and it's what led us to host this conference.

We're coming up on the one-year anniversary of the DMA, the Digital Markets Act coming into force, and so we thought it would be a good time to take stock to figure out what have we learned so far in the first year, and to get that perspective from multiple different audiences. So from academics who are doing academic research, from independent researchers in the industry and elsewhere, from European perspectives and from US perspectives and from international perspectives. So we really tried to bring all those different folks together into a brew, into a room and see what understanding we could carry forward from that about the information environment and the impact of the DMA. When I think about my takeaways from the event, I think, first of all it's always useful to hear directly from the source, directly from Andreas Schwab who was the driving force behind the DMA in the European Parliament and from others who we had at the conference, just what the DMA is trying to achieve.

And one of those things is, it's really trying to sort of sum up 15 years of learning from antitrust enforcement in the tech sector into a broader-based regulation that applies across the industry as a whole and as we've seen to many different gatekeepers operating different services. And when we do that, when we look at it as a mechanism to take what we've learned and sort of broaden it out into a regulatory framework, that started to reveal a little bit where the places where we could use more rigorous definition and also where more independent analysis could be helpful. So, just to take a few examples from the conference, we had some great talks about self-preferencing, some talks about Amazon in particular and a little bit about Google. And what you start to realize is even the definition of what does it mean to self-preference is not entirely settled, and you could put more rigor around what does it look like to be a platform that is engaged in self-preferencing.

The difficulty is that some of what you see in terms of search ranking and results isn't necessarily the result of the platform purposefully attempting to give itself an advantage. Sometimes people buy more Amazon products, right? It's very, very hard to disentangle the dynamics when there's multiple different feedback loops and different reasons why you end up with rankings in a certain order. Obviously, the entire thing is controlled by the platform, but getting more transparency into that and trying to intuit why a certain set of results comes up has been a major endeavor of the DMA thus far.

Dean Jackson:

I thought some of the early technical papers of the day from an economic point of view were really interesting. Because if you ask a lay person on the street, does Google have monopoly on search? I think first off, they'd have to remember what monopoly on search might mean. And then they would say, "Obviously." And then if you ask them if that was a problem, let say, "Well, I quite like people." But then when you go in and try to prove it, the papers found it, as you said, quite complicated and it's not clear how you would regulate them to get a better result or how you would explain to the average consumer what the harm is.

Alissa Cooper:

I think it's easy to get lost in the weeds a little bit, especially as you get into the bowels of enforcement of the regulation or looking back in the history of antitrust enforcement through litigation. But I do think the basics of the DMA speak pretty clearly to the things that consumers care about, right? So the DMA is all about promoting contestability and fairness. They use words that are familiar with people like gatekeeper, right? So just because a gatekeeper basically serves as a bottleneck or has control over an underlying platform or service, doesn't mean that it should be able to control what happens on top of that platform. And that's just like the central animating feature of the DMA. So you can see that with the app stores that the mobile handset vendors, Google and Apple are prevented in the DMA from having too much control over which apps get to be on your phone, which apps get to be set as the default for your search or your browser.

You see that as well with some of the interoperability provisions. Just because Apple sells you the phone, does that mean they're the only app store that should exist on that phone? Wouldn't it be nice if you could have alternative app stores? So, a lot of the DMA is about giving consumers more choices and about ensuring that the other competitors who are trying to enter into those markets or trying to compete with the platform who also has an offering in that market can compete on a level playing field. And it's pretty simple when you think about that from a consumer perspective.

Dean Jackson:

But then proving that there's been a violation pretty complicated, right? So how has implementation dealt with that issue of saying, "No, these products aren't at the top because we're preferencing, it's because consumers like them."

Alissa Cooper:

I think in some of the cases you're already starting to see some of the pieces of this contestability and fairness puzzle come into view, and the assessment of compliance is actually pretty straightforward. So, we are starting to see that there are new app stores that are available in the European Union. We're starting to see consumers being offered a choice of browser, a choice of search engine. They're being given options to have their data be siloed between different services that are offered by the same gatekeeper so that they're not automatically opted into all of this data sharing. So there's actually a lot that's already visible to the consumer in the European Union. When they're using their phone, when they get a new phone, they're starting to see some of these options that are there. And those are all, I think, great signs for the future of the DMA that you saw the gatekeepers take some steps towards implementation in compliance.

I think another really positive sign is that, and that we spoke about at length at the conference was about how influential this model is starting to be across the world. So we see regulation in other jurisdictions which has similar elements or is drawing some inspiration from the DMA, and that includes, we heard from the UK, from Australia, India, Thailand, variety of other places. So I think those are all really interesting and good signs, and in part because these platforms are global, they operate everywhere, and so the experiences from one market to the next aren't all that different necessarily, when we think about what consumers and competing businesses really need in these markets. We're also I think starting to see where the gaps are. And there's maybe one more from a process perspective and one more from an implementation perspective that I would point out. On the implementation side, the commission has opened non-compliance investigations into several of the gatekeepers.

I think focusing on some of their higher priority areas of focus within the regulation. And I'm very much looking forward to seeing the results of those investigations, which should be coming out in the month of March if all goes to plan. And that's very important as well in terms of showing that DMA enforcement has teeth and that when we see what appear to be gaps or just outright non-compliance, that the commission has the tools that it needs to bring those gatekeepers into compliance. I think the other place where we're seeing a gap that we spoke about at the conference was just the need for really better mechanisms to obtain input into the enforcement conversation from third parties of all kinds, from competing companies, from researchers, from civil society organizations. There's a lot of other people who have perspectives on how this implementation process is going, aside from the gatekeepers and the commission and the national regulatory authorities.

And I think it's really important to try to build some more robust means for those parties to provide their input. We spoke at the conference quite a bit about the risks to competing companies of retaliation for engaging with the commission to try to seek some of this relief. That's a real problem that requires sort of nuanced solution, but that's another area where I just think as the regulation matures and as all the parties involved get accustomed to what it means for it to be enforced, those are some mechanisms that can be built in. The last one, I'll say, is this more a personal interest of mine, but I'm really looking forward to seeing deployments of interoperable messaging under Article VII of the DMA. It's not a part of the DMA that people talk about too much, but there is a provision in the DMA that requires for now, WhatsApp and Facebook Messenger to interoperate with third-party messaging services or to make an offer of interoperability that third-party services can take advantage of. We haven't seen any deployments of that yet, but I'm hopeful that we will see some this year.

Dean Jackson:

So would Android users finally get a blue bubble on that iMessage app?

Alissa Cooper:

It is indeed. In a way it is targeted at the canonical green bubble, blue bubble problem. Apple has not been designated as a gatekeeper for the purposes of messaging yet. Could be in the future potentially. So, it won't actually address the green bubble blue bubble problem. WhatsApp and Facebook Messenger are extremely popular in Europe, and it could potentially give European users more choice as to which messaging client they want to use, even if they don't want to be connected to any of Meta's messaging products.

Dean Jackson:

Alissa, thanks again for organizing the conference and thanks for joining us today.

Alissa Cooper:

Thanks a lot.

Dean Jackson:

One of the panelists at the Knight-Georgetown Institute Conference was Anu Bradford, Director of the European Legal Study Center at Columbia University. I spoke with Anu about what we might expect for the DMA and similar legislation when Brussels and Washington go to the trade negotiating table. Anu, thanks for joining us.

Anu Bradford:

Thank you so much for having me here, Dean. So my name is Anu Bradford, I teach at Columbia Law School in New York, and my research focus is on digital regulation, the European Union and International Trade Law. My recent books have been part of the conversation that we talked about as well. So the Digital Empires: The Global Battle to Regulate Technology was a book that I published in 2023 that is comparing the European and American and Chinese approaches to digital governance. And before that I published a book called The Brussels Effect: How the European Union Rules the World. So that was the book to describe why the European Union is often having an external influence with its regulation. So simply by regulating the single market, the EU is often able to exert global regulatory influence.

Dean Jackson:

Well, I imagine after the last couple of months you probably are already thinking about your next book, which might detail some of the ways the landscape has changed. So, let's unpack a little bit of the changing landscape and the cast of characters involved in it. In just the past couple of weeks, President Trump, US Tech CEOs like Elon Musk and Mark Zuckerberg, Vice President JD Vance, congressional leaders, they've all taken aim at the Digital Services Act and the Digital Markets Act. What do they have to gain from challenging these laws?

Anu Bradford:

So, the digital regulations emanating from Brussels are frankly rather costly for these tech companies. So, the Europeans have imposed high fines on US tech giants. So Google alone has paid 10 billion in fines across different cases where the Europeans have challenged the abuse of the dominant position. But you now have these really significant legislative acts, the Digital Services Act, and Digital Markets Act that really force these companies to change the way they do business. And of course they don't like that. So it's not just costly in terms of they can pay a fine and they can continue, then the business as usual, but they're really expected to change the very nature of the products and services that they are offering. So this is something that they are obviously rather resentful about, but they have struggled to respond to the European regulators.

And they tried to push back. They tried to lobby against these laws, yet these laws did come into effect. And now when it's time to implement these laws, these costs are really real. And these tech companies now realize that there is a moment that they have now with a sympathetic administration that shares their resentment towards this regulation that can be described as censorship, limiting free speech or unfairly targeting the American tech giants. So there's been now an attempt to co-opt the Trump administration and get the US government to advocate on behalf of these tech companies. And obviously, the way this government seems to advocate is that they rope everything into this product trade war. So, even Meta's Mark Zuckerberg was describing the fines that his company has paid to the Europeans as tariffs in an attempt to then get the American government to respond and say that, "Look, if the Europeans are imposing these tariffs on American tech companies, it is then a national interest of the US to respond."

So this is what I see as going on but there is this alignment now between the tech companies. And the government obviously, it has a very strong America first agenda where everything is seen in terms of fairness or the absence of such fairness. And President Trump has never made it a secret that he was not happy with the way that the Europeans were exerting greater influence and the Europeans got to have a say on how American companies ought to be running their businesses in Europe, but also in many other parts of the world.

Dean Jackson:

I was having a conversation with prominent technology scholar recently, and they said to me that in a way, these laws are a form of tax or tariff on US companies in a sector where Europe doesn't have many of its own domestically based competitors.

Anu Bradford:

It is tempting to view this as acts of protectionism that the Europeans have embarked on this envy-driven, zealous attempt to level the playing field and restrain the American companies so that they could give a leg up for any European companies trying to enter this space. But I think it's very hard to separate whether this is an anti-American policy stand or whether the Europeans are simply going after the biggest companies that are capable of causing the greatest harm on the marketplace and they happen to be American. So, I think there is very little evidence to suggest that the DMA and the DSA would be emanating from protectionist motives. So the Europeans are genuinely concerned about the abusive practices of these tech giants, the way that these tech companies have abused their dominant position and making it impossible for the smaller companies, other players to offer their products and services and hence, bring more choice to the marketplace.

The Europeans are also deeply uncomfortable with this surveillance capitalist business model where these companies are extracting the personal data of the Europeans and monetizing that in ways that compromises the fundamental right to privacy. And the Europeans are also upset with the way they often fail to moderate content. So that leaves the Europeans surrounded by hate speech and disinformation. So I think there are genuine, well-documented concerns that are driving these regulations in Europe. But I do recognize that we now entered the kind of geopolitical reality whereby every jurisdiction is pursuing creative technological sovereignty. We see a lot of subsidies and we see the rise of industrial policy. So, the most recent attempts to try to defend the European technological sovereignty, obviously bring more techno nationalist impulses into the decision making. But I think it's very hard to suggest that the Europeans would simply be going after these tech companies, for instance, using the DMA in order to protect some European companies.

There's no European search engine that they're trying to protect. There is no European competitor to the Facebook that is driving these cases. So if you look at some of these long-held battles in the antitrust domain, for instance, they've often been other American companies that have complained to the European Commission. Sorry, so there are American companies often on both sides of the dispute, and it's hard to really describe the marketplace of consisting of European companies versus the American companies. There are companies like whether it's Yelp or Epic or others that are American, and that are very concerned about the way these US tech giants have been behaving.

Dean Jackson:

I want to turn then to that European market itself since the release of the Draghi report. The report by former Italian Prime Minister Mario Draghi commissioned by the European Union. It seems like even though you've just laid out a really strong rationale for regulation and a lot of reasons that stakeholders were so keen on it that now many European policymakers are souring on the regulatory approach. The argument being that it's held back Europe from developing its own tax sector that might compete with these American Behemoths. What does the report actually say about Europe's tech regulation? Do you think that it's fair to say that regulations like the DMA and the DSA are holding back Europe's tech ambitions?

Anu Bradford:

So let me, first of all, say that I very much welcome and endorse most of the findings of the Draghi report. I appreciate the content, I appreciate the tone. In particular, I'm grateful that he stresses the sense of urgency that Europe must radically change. I think the competitiveness angle of this is paramount. The Europeans for a good reason need to worry about its tech sector lacking behind the Americans and they need to ask the hard questions, why that is. Where I probably depart from Draghi to some extent is that I am not as skeptical of the tech regulations themselves being an important culprit. They don't explain that much in my view why the Europeans have such an innovation gap, if you like, with the Americans. There are many reasons that Draghi, right, correctly highlights. So he talks about the absence of the digital single market.

He talks about the need to create a capital markets union. I 100% endorse those proposals. I also think that the Europeans need to take a hard look at the foundations for risk-taking. So Europeans have very stringent bankruptcy laws that make it very hard for entrepreneurs to take risks. And because if they fail, they often don't get a second chance. There are some issues that Draghi doesn't highlight, including then the Europeans inability to recruit global talent the same way Americans have been able to recruit for the benefit of the tech industry. But to really go to the question that you put out there is that, the report in general sends the message that the Europeans have been too focused on regulating technologies at the expense of generating technologies. And in many ways that is true. The Europeans should not just be the referee. They need to get on the field, they need to play the game, they need to play offense and defense, and they need to do that ambitiously and well.

But if you think about the DSAs and DMAs, the DMA barely targets Europeans. So it's very hard to say that the DMA somehow would be holding the European companies back in part because it's really the American tech giants that meet the thresholds. And I think the few of us now looking at the power these companies have would say that the Europeans have really successfully managed to curtail their innovative potential and their ability to grow and exert power. So, I think there's rather a concern whether even the DMA will be effective enough to sort of unlock the competition in the marketplace. The DSA apply to large and smaller companies. So there's a broader set of companies, including European companies that fall under the umbrella of the DSA. And I think it's always right to ask questions whether those regulations impose some burdens that would hold back the European growth.

The same question we can ask about the AI Act, we can ask about the GDPR. I think the GDPR is known for disproportionately burdening the smaller companies that don't have the same resources to comply with the regulation. So, I am more critical of the GDPR than I am of the DMA and DSA because DMA and DSA are by nature asymmetric. They're imposing greater obligations for the companies that are larger, that are more capable of generating more harm, but that also have greater resources to comply with the demands of the regulation. So in that sense, I think the regulatory approach there is correct, and it would be hard for me to say that too much of the European competitiveness concerns could be traced to regulations like the DSA and DMA. The Europeans have much more foundational deficiencies in the tech ecosystem. So, DMA and DSA are brand new regulations. And at the time when companies like Facebook and Google were founded it, there was very little regulation in the digital space in Europe.

Yet those companies, they're founded in the US and not in Europe. I hope we don't get distracted by this excessive focus on the current ambitious digital regulatory agenda. And somehow assume that if the Europeans were to dial back, let's say, that we just don't implement the DSA as vigorously or we decide to water down the AI Act, that somehow there would be a bunch of AI companies that would emanate from Europe five years from now. I don't think that's the main issue. The main issue is really that we address these other aspects, the source of capital, the fragmentation of the digital single market, the talent deficit that we have, and I think those are the real foundations for European competitiveness.

Dean Jackson:

That brings me to my final question for you, which is what will you be watching for as EU Commission President Ursula von der Leyen responds to these dynamic challenges? What might signal whether or not she's going to implement these laws with vigor or if she's going to hold back in order to gain concessions from Washington?

Anu Bradford:

First of all, I take a lot of comfort that she's in charge. I think she's competent, she's experienced, she's hardworking. I don't envy her, though. This is a really difficult political moment. I think the geopolitical pressures that the European Union is facing are real. They are in many ways unprecedented. She's by her nature a strong transatlanticist. She's used to working closely with the United States, but also relying on the assumption that we share values. The European Union and the United States are natural partners, and now suddenly that assumption no longer holds. So, she really needs to reorient. I think it will be very difficult geopolitically in addition to, obviously, navigating aggressive Russia and now the alignment between the United States and President Putin. What I hope though is that she's not prepared to politicize the digital agenda. The commission is the guardian of the European treaties. These are binding laws, and the commission is entrusted with the task of enforcing these laws.

They enjoy political support in Europe among the citizens in the parliament. I think the political backlash would be fierce if the commission under her leadership would be just willing to trade away many of those protections that are absolutely key to how the EU views itself and its role in the world. How the EU has always been prepared to defend fundamental rights and democracy. And I think in many ways I hope that she almost stumbles down, because right now we really rely on the Europeans to defend those values when America seems to be moving away from its defense of democracy and the fundamental rights and pursuing this very techno-libertarian agenda where the regulatory capture is at the unprecedented level. So in many ways, I hope that she feels the weight of responsibility for the Europeans to exercise that voice, and I hope she will be working closely with other allies who still share those values.

So work with the Koreans, with the Japanese, with the Australians, with the Brazilians who are very committed to digital regulation. There's a lot of will there outside the United States. And then, also to remind her that the United States is still not... Even though it seems like we are moving towards a form of more authoritarian centralized control, it's still a federal state. There are many states including California, New York, others that are continuing to be committed to digital regulation, and that would be wanting to see the Europeans are not back away from that agenda.

So in many ways, I think it is just not a feasible path for her to, for instance, instruct her commission that lets drop the investigation on acts so that we can send off the tariffs from the United States. Because if you start bargaining with the US like that and you let the bullies get their way, they come with the next demand the next day. Next day you need to drop the investigations on Apple and so forth. So this is the dynamic that she must know it's not sustainable. It's not sustainable externally, it's not sustainable internally because ultimately, I think there is so much to lose and very little to gain from that. So in many ways, I hope that she will hold firm, she will be true to the values that are driving the European digital agenda. And ultimately, there are many issues she's forced to politicize, but the digital agenda shouldn't be among those.

Dean Jackson:

What if von der Leyen were to instead of say, dropping the investigation into X, were to slow walk it and water down penalties and slow the pace at which the commission pursued new investigations. Would that be a less dramatic sign of capitulation one, which might avoid domestic backlash while appeasing Washington? Could you see them taking that approach?

Anu Bradford:

Yeah, so in many ways, I think you're right that we are less likely to see the commission altogether drop the investigations. But it is a fine line to walk, because if you are seen as watering down the penalties or slowing down the pace of the investigations, and you are seen as capitulating to the Americans. And there are audience cost to that, there are political costs in Europe if she is seen as, basically, walking back what would be the optimal enforcement because she's yielding to the pressure. Europeans do have very big vulnerabilities and dependencies. The Europeans are too dependent on American technology. They are too dependent on American presence in Ukraine, and it's very difficult path to navigate when everything is roped into this bigger geopolitical trade battle. So you need to be pragmatic. And I think the way she's messaging on what the Europeans are doing, that's where she needs to be particularly savvy.

So, she probably shouldn't be highlighting how they are doing these investigations in order to show no sensitivity to the concerns to the Americans. And it's not just the Americans, it's also the rest of the world because the Europeans have had tremendous influence. I've written about the Brussels effect, how many countries have been emulating what the Europeans are doing. So if they now see that the Europeans are wavering, that the Europeans are losing confidence in their own regulatory agenda. It sends a message that will be seen and heard in third countries as well.

When we may see the Koreans backing away from the enforcement, the Japanese thinking that if the Europeans can't do that, maybe we can't do that either. There's a positive effect that when the Europeans are seen as confident and powerful and enacting these regulations, the rest of the world is following and they are emulating many of them. But if the Europeans are walking back, the rest of the world may do the same. So in many ways, I think the stakes are very high for Europe, but the President of the Commission also needs to know that what she does is also watched and potentially reneged in other parts of the world.

Dean Jackson:

Really appreciate you bringing your expertise to this podcast and for sharing your time with us.

Anu Bradford:

Oh, thank you so much. The pleasure was mine, Dean.

Dean Jackson:

As Anu mentioned, the rest of the world isn't sitting idly by as this transatlantic drama unfolds. To tell us how countries are grappling with these issues and how their approaches are similar to and different from Europe's, and whether or not they, too might face pressure to act down. I'm joined by two experts, Haeyoon Kim at the Korea Economic Institute of America and Gunn Jiravuttipong from UC Berkeley Law School. I want to start by giving you each a chance to introduce yourselves. Haeyoon, maybe you could go first.

Haeyoon Kim:

Sure. Thank you so much for the opportunity. This is really exciting. My name is Haeyoon Kim. I'm currently affiliated with the Korea Economic Institute of America. It's a think tank based here in Washington DC. I work there as a non-resident fellow, and I mostly cover tech and trade. And this issue of antitrust and digital regulation has been one of the issues that I've been closely monitoring, with a special focus on Korea and Korea-US Alliance, and I'm really excited to be here today. Thank you.

Gunn Jiravuttipong:

Hello, everyone. I'm glad to be here. My name is Gunn Jiravuttipong. I'm a JSD candidate at UC Berkeley School of Law. I'm originally from Thailand, but I'm being spending a couple of years in Berkeley right now. My research interest is focusing on the diffusion of digital regulations, focusing on antitrust laws. So, I'm interested in how these laws spread around the world and how is countries adopting and adapting it to their local context.

Dean Jackson:

Haeyoon, I wanted to start with you. South Korea, of course, has its own rich tech ecosystem with indigenous companies and many tech players that are dominant in its own jurisdiction. It also has tricky dependencies on the United States, which in some ways makes it an interesting parallel for Europe's situation, but in other ways it's quite unique. And so I wondered if you could describe Seoul's approach to digital antitrust issues, and how it's navigating what's become maybe unexpectedly a geopolitical question.

Haeyoon Kim:

I think, Dean, your question is really spot on because I personally believe that South Korea's case in this conversation is unique in a way that, yes, we talk about antitrust and digital regulation, but also it touches upon the unique relationship that South Korea has held with Washington and very ill-timed domestic political turmoil that South Korea is currently going through. And also, where South Korea geopolitically stands on the global stage. So if I can just briefly give you a wrap up of what happened in South Korea on this issue. So in December of 2023, KFTC announced that it's going to newly enact PCPA. PCPA stands for Platform Competition Promotion Act. So basically, it was something very similar to EU's DMA approach in terms of regulation. It was heavily influenced by and modeled after EU's DMA in a sense that it was preemptive antitrust, it was ex-ante regulation, and it was definitely a designation scheme.

So just like EU DMA's gatekeepers, were going to pre-designate which ones are dominant, right? But what really brought my attention at the time was, yes, it was near Brussels effect almost right after EU DMA KFTC came up with something like this, which was surprising, but also the fact that how this PCPA idea was being received by many, both at home and abroad, mostly here in Washington DC by major policymakers who also happens to be or used to be involved in the Trump administration. So, for example, the National Security Advisor under Trump's first term, Robert O'Brien issued an op-ed, and so did the newly appointed USTR, Jamieson Greer, shared his opposition to this idea through an op-ed. US Chamber of Commerce laid out statements opposing this view. And also, there was a bill introduced by Republican Congresswoman Carol Miller. And the title of the bill was US-Korea Digital Trade Enforcement Act.

So all these opposing voices were basically arguing two things, A, that South Korea's online platform regulation is protectionist measure and B, that this is in favor of China. But I thought that a really important part of the conversation is missing, which really drove me to write my first piece for KEI was the uniqueness of the South Korean digital market. So unlike the EU, I think this is what makes the case of South Korea so unique is that there are domestic homegrown tech companies that are just successful in South Korean digital market. And the greatest examples of these are Naver and Kakao. So if I may give you some more concrete examples, in the online search market, Naver, which is a Korean tech company, takes up about 60% of the Korean market when Google only takes about 30. And this is not something that you see elsewhere. In the messenger app service Kakao talk, which is run by Kakao, is used by 49 million users out of 50 million in South Korean population, right?

You can even pay your taxes, the government taxes through Kakao talk. Like that's how much Korean population are dependent on this domestic platform. In the ride-hailing service, it's not the Uber or the Lyft that we go to, it's Kakao Taxi, which accounts for over 90% of the ride-hailing services market. So in other words, as of today, I cannot possibly predict the future, but today, the South Korean platform ecosystem remains predominantly influenced by Korean and American tech companies rather than Chinese. And the real concern at the time in Korea among the industry officials was that whether Korean government or the Korean regulators could put Korean and American big tech companies on the same scale when regulating, and this is again because of the unique relationship that Korea has with Washington, Korea, and the United States are allies. And on the trade front, we have a free trade agreement with the United States that we're committed to.

On the security front, we have US troops based in South Korea to deter North Korea's nuclear programs, right? So, oftentimes, it is very obvious that Seoul is hesitant to upset Washington, especially when it comes to regulation or targeting American tech companies. So due to such diplomatic and political considerations, at the end of the day, the Korean tech's concern was that, okay, it is likely going to be just us being targeted the most, which is unfair at our disadvantage, and therefore we're against it. And I think when it comes to their concerns, the domestic concerns can be highlighted through a real-life example that's recently gaining traction in South Korea, which is over YouTube. So in South Korea, if you purchase YouTube's premium subscription to skip ads, you get YouTube music for free. So basically, if you get a subscription for you to premium, you're getting a free Spotify, right? And this has become an issue because KFTC said, they're going to take a look into it.

This is a classic case of possible bundling or tying sales, which is against antitrust rules. It's been two years, but no action has been taken. And in the meantime when nothing was happening, the market, the music streaming service market which used to be dominated by Korean players including Melon or Genie, now by the number of users, YouTube music is the number one app that everybody go to for their music. So against these pushbacks from home and abroad, basically KFTC pivoted. They announced a new plan in September 2024 in saying that, "Okay, we're not going to do PCPA, no longer PCPA, but instead we're going to propose amendments to the existing competition law, which is MRFTA, stands for Monopoly Regulation and Fair Trade Act." The biggest difference from its initial approach is that it's ex post regulation including presumption scheme, not a designation scheme when it comes to assessing the dominance or anti-competitiveness, right?

And regulators will assess basically based on the threshold, if they meet certain thresholds that the platforms are going to be considered or decided dominant or not after. Not before, but after its anticompetitive practices and behaviors occur. And since that announcement, as of today, nearly two dozen bills, I believe... Yeah, around 17 or 18 bills have been introduced that are related to the platform regulation at the National Assembly. But President Yoon of South Korea declared martial law in December of 2024. And since then on, basically, all legislative efforts on this front has been put on hold.

Dean Jackson:

Gunn, I now want to turn to you having heard one case study of antitrust policy outside of the United States or Europe, South Korea. What can you tell us about the diffusion of similar approaches across the many other countries that you've studied? What's driving this diffusion?

Gunn Jiravuttipong:

Yeah, thank you so much for the question. And I really liked the discussion that we had earlier about how Korea has tried to investigate it and tried to pass the law. I think that sets up what the world is thinking. So, I'll start here first. Almost every country in the world has antitrust or competition law. And usually, this is generally called an ex post approach. So, you have a case and then you initiate an investigation, and then you go to into litigation and then you provide remedies. Now, in a certain point of time, countries were trying to use this tool to tackle this digital platform concerns. The tools are, you can make the law more clear by passing out guidelines, doing more market studies, announcing investigations. But then if that's not enough, then you go to the next step that you said, "Okay, we need to change the law making amendments changing."

So in antitrust law terms, it's thinking about market definition, thinking about theory of harm, thinking about burden shifting. But then at a certain point, these approaches or this ex-poste approach is not enough, and it is very clear from the statements that agencies have made that these traditional tools is too slow. So now, they're looking forward to new laws to do it or new ways to do it, which a points to the digital market at the EU new law, which is broadly called the ex-ante approach. So for this approach, you have a set of platforms that you are interested in regulate. You have a list of obligations that you wanted to regulate, and then it speeds up the process a bit. Now, this is the setting. Right now, I think there's a lot of countries that has already passed laws on this. For example, the UK has passed the Digital Market Competition and Consumer Act or the DMCC bill, and then the Japan has a law called the Act on Promotion of Competition of Specific Smartphone Software, or we call it shortly the Smartphone Act.

And then we have Australians that is also putting out a draft law for public consultation. And this is similar in India, Brazil, they have these laws put on. Now, I would say, that looking at a very big picture, there's a convergence or there's a shift that countries want to jump to this new approach, which is the ex ante approach, but there are also customizations within the laws to make it work for their local context. Just to wrap up, I think, just to focus on one part of your question, what is the factor that is driving this diffusion? I put it in three boxes. So the first box is the objectives. So the objective of the DMA is to create a fair and contestability digital market, a fair and open market, someone would say. And I think this is a broad policy objectives and it aligns with the local context.

So a lot of countries are users of US tech companies are also users of Chinese platform, but they want a fair and open digital market. Second is a lot of countries in the reports have said that they needed to support SMEs or small business, local business that is relying on these platforms to grow their business. So, any rules that supports these SMEs not to get abused or get a fair deal throughout their interactions with the platform is appealed to policymakers around the world. Now the second box of the diffusion is the implementation, as have I already touched upon, because existing competition law is too slow and cannot capture the digital market dynamics. That's why there's a bias for change, I think around the world where we need a new set of tools to complement what we already have. And on another side of that, when the EU digital market came out, there was a promise of a less regulatory burden.

So in antitrust, you need a lot of economists to think through all this. In the DMA in a sense, it's shifting these economic thinking or this regulatory burden into different parts. So, you front load the economic thinking when you think about gatekeepers. You don't need to do it every time when you open a new investigation, and then the obligations or the theory of harms that you listed, it's already there. Everyone can see it. Everyone understand what that means. And just the last part that I wanted to stress is that the DMA is quite a clear template.

As we have told, there's a list of gatekeepers, there's a list of obligations, but it's also adaptable in a way because you can switch out the gatekeepers. If you want to put a Chinese platform, it's big enough in your country. You can put in low-code platform, it's big enough in your country. That goes the same for the obligation list too. If you think certain obligations or certain business is good, you don't want to touch it, you don't want to intervene it, you can take it out. And this goes in the backdrop of, there is no competing regulatory model. So the US is more of an enforcement-based system. So when countries are thinking about like, what law should we introduce? I think the EU was there as the only option to rely upon as a template.

Dean Jackson:

I have two follow-up questions for you, and the first is on exactly that point. There's one camp of people who say, this is a textbook example of the Brussels effect. There's another group of people who say that description really minimizes the agency and role of policymakers in most of the world's countries. Do you sympathize more with one camp or the other?

Gunn Jiravuttipong:

Thank you for the question. This is a great question, and I think my research question when I started this whole thing was like, is there a Brussels effect in Digital Market Act? It's very clear that it was in the Data Protection Act and in other areas of law. I came to think that it's a Brussels effect plus. So this is how I think it. Traditionally, Brussels effect can manifest in two ways. So it's de facto and de jure. So de facto means that companies, because they're multinational companies, they voluntarily adopt EU rules. And because EU is such a big market, it's easier or cheaper for them to roll out the rules globally. Whereas the de jure means that countries around the world are actively looking at the EU and adopting these EU regulations to their own country. Now, I think a modern example of a pure Brussels effect is the USBC. So when the Euro passed the USBC law, every iPhone around the world changes it into USBC.

Because it is probably more convenient for them to roll out USBC around the world. Now turning to our digital market app example, it's a bit more tricky. I think it's a de jure effect, which is countries are looking for new tools and then says, "Okay, I'm going to try to copy the EU law." And then whenever these countries say they're thinking about this new law, they'll always mention that they're inspired by the EU regulation, or at least they're taking it as a first template before they're molding it into their jurisdiction. So whenever there's a report about this, everyone will say, "It's following the EU way." But if someone looks further or deeper than that, then they'll notice that like, "Oh, there's some customization. Some countries are narrowing it down, or some countries are widening it up." So I think that's the element. And then there's also another element to that. So I'm just talking about from the regulator side.

From the digital platform side, I don't think from what we've seen, they don't want the EU version to roll out everywhere. They prefer to have, or it is not hard to create a different versions of their service around the world. We have already seen this, so when the DMA rolled out, it is only restricted in the EU area, so it's not that hard. And then another example is the app store laws, which we have seen that... App stores, we have different versions of app stores around the world now, South Korea and Japan had a version of it. So it's not that hard to create a fragmented or different version of service around the world. So it's a tricky one that it's Brussels effects, but with some variations.

Dean Jackson:

My second follow up question for you is about this question of having domestically dominant tech companies of one's own. I'm wondering if you see any differences in the approaches of countries which have their own strong local tech sector that they might want to promote, and countries which don't have that and are reliant on services headquartered elsewhere.

Gunn Jiravuttipong:

I think I follow Professor Anu Bradford's thinking on this. When countries want to promote a digital sector, it's not just about antitrust, it's also about creating a single market. It's also about labor. It's all about bankruptcy law. But what I've seen at least the competition law space is that each country has its own priorities on what sector they wanted to use the DMA on. So for example, Japan, it's very narrow because they only focus on mobile operating system, app store, browser, search engine. This might reflect that Japan probably has a lot of app developers and they wanted to open up the app stores to facilitate this growing market. Australia is a unique case because they took five years to investigate almost every aspect of the digital market. And I flag that they asked in the public consultation that after all their investigation, they think they want to prioritize in app marketplaces and then social media and ad services.

So, it's interesting how they're looking at certain market to intervene in the first. Another one that it seems like they were very cautious not to follow the EU or US way is in e-commerce. So they said, "Okay, in e-commerce market, a lot of country has Amazon as the dominant player," but in Australia, Amazon is not yet the dominant player. Of course, there's a possibility of tipping the market, but it is still not the current state of the market. And I think this shows that different service has different dynamics. And I would say, e-commerce is a very interesting space because at least in Southeast Asia where I come from, Chinese e-commerce are the big players in the region.

Dean Jackson:

My last question for you both is what it means to have simultaneously such a global interest in pursuing antitrust law and a United States that is pursuing a more aggressive set of trade relations with the world, trying to throw its weight around, extract, concessions, and in some cases, pressure countries to abandon these laws. Is there something to be gained by building solidarity between governments which see digital regulation is worth pursuing? And are you optimistic that lawmakers having to make these trade-offs and calculations will look for that solidarity and use it?

Haeyoon Kim:

Dean, I think that's a million-dollar question, and wish I had the crystal ball in front of me. But if you ask me what I think based on what I've seen so far as of today, I personally believe that it is realistically speaking uncertain whether European and Asian countries can somehow, for example, form a united front on this issue. And I say this because their economic interest and relationships with Washington look all different. So for example, the case of South Korea. Korea tends to be very mindful of Washington's stance due to its economic and security alliance with the US. In contrast, Europe has taken a more bold and independent approach to digital regulation pushing forward despite US opposition, right? So the key question here is, whether Europe is as concerned about US reactions including tariff threats, or any different threats mostly posed by President Trump as much as South Korea or as much as Japan is.

So while some European countries seek to avoid trade frictions with the US, the EU as a whole has been prioritizing digital sovereignty and fair competition, often pursuing regulatory policies that challenge American tech companies. Meanwhile, Asian countries are generally speaking more cautious. They're more balancing their regulatory ambitions with economic ties to the US. So I think ultimately it is unlikely that Europe and other major Asian nations will fully align on this issue as their response will be different depending upon the pressure that US will be imposing country by country and their respective strategic interests vis-a-vis Washington look all different. So ultimately it really comes down to, I think, calculating what you can be gained from Washington and what must be given in return. And whether South Korea will go as far to, I don't know, abandoning the entire platform regulation idea as a bargaining chip. I mean, that is something that really needs to be seen as we move down the road.

But at this point, I don't think we have a concrete plan. And this is also because of the unprecedented domestic political turmoil that South Korea is currently going through right now. So we, basically, have a president who's acting... Or the acting president because President Yoon was impeached, arrested, and indicted. We have the second person, the prime minister, who was replaced, but he was also impeached. We have a third person in line, the deputy prime minister who's serving the role of leading the government. So even within the Korean government, the trade front, the foreign ministry people, and also who are on the antitrust, there is no one decided consensus in terms of how we're going to move forward on this issue. So, these complexities and uncertainties and timing-wise terrible, in my opinion, is only going to add a challenges. And when it comes to a united front like solidarity, like you've asked, I'm very skeptical.

Dean Jackson:

What about other parts of the world? Certainly, the situation in South Korea is so tenuous right now. It's hard to make predictions and certainly hard to be optimistic. But are there any other regions or countries where you think there might be a better prospects for a coalition?

Gunn Jiravuttipong:

To build on what Haeyoon just said, for me, solidarity means a couple of things. For me, the first one is, I think market access matters. So when we look at the EU, the EU is quite a big market, and when they negotiate together, no platforms would want to pull out all their service out of the region. But when you think about other countries, of course, it is a smaller market and... I always think like this, whenever a country is passing a law, the tech companies have two choices.

They can voice their concern, they can push back, or ultimately, if the negotiation fails, they can exit the market. Now, when you exit the market, there's two scenarios. Some local companies who fill in the gap of those services or another foreign regional company will fill in that gap. So, there's likely two, three scenarios happening here. I think countries sees digital harm or digital competition harm as a common concern. They would have a common ground to build upon and maybe think about the regulatory approaches or the policy approaches that they can help each other. So, that's the point of solidarity that, I think, is pending on our future. And I think, there's a lot of common grounds that can be worked upon. It might not be the whole package of law, but I think there'll be certain aspects that countries will work together, agencies will work together, will share best practices, and I think there'll be some development in that areas.

Dean Jackson:

Thank you both so much for being here.