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In 2022, the European Union introduced the Digital Markets Act (DMA) as it sought to engineer a fairer and more competitive digital economy through regulation. Since then, the DMA has designated seven “gatekeeper” firms—Meta, Alphabet, Amazon, ByteDance, Apple, Booking, and Microsoft—and identified 23 core platform services (CPSs) including online search engines, messaging services, and app stores, as falling within the regulation’s scope.
Gatekeepers found in violation of the DMA and failing to remedy non-compliance within six months of receiving notice may face significant fines ranging from 4 percent to 20 percent of global annual turnover. Over the past two years, the European Commission has initiated a flurry of DMA investigations resulting in several high-profile legal battles. This commentary examines how the regulation works, the status of ongoing litigation, and what policymakers in Europe and the United States canlearn from the first years of the DMA.
The DMA grew out of a broader debate in Brussels over whether traditional efforts to foster competition were adequate for digital markets dominated by a small number of increasingly powerful technology firms. EU Commissioner Thierry Breton, viewed by many as the architect of the DMA, argued that it was time for Europe to “sets its rules of the game upfront” rather than continue relying on lengthy and at times ineffective antitrust litigation. The idea was that ex-post antitrust cases were ill-equipped to regulate fast-moving digital ecosystems in which early advantages can create entrenched market leaders.
At the same time, the birth of the DMA also reflected growing concerns about Europe’s dependency on a handful of U.S. technology firms, and what that may mean for European economic sovereignty and strategic autonomy. While many sought to clarify that the DMA was not intended to target American technology leaders, others like MEP Andreas Schwab explicitly stated the “biggest problems” in the EU tech sector are the five American gatekeepers. With these broader themes driving dialogue, the DMA was created to regulate large online platforms which control access to digital markets and therefore inhibit competition. Proponents of the law highlighted the need to promote consumer choice and limit large platforms’ abilities to constrict the growth of smaller competitors. The Commission defines gatekeeper firms by their user base, revenue, and CPS offerings. Specifically, gatekeepers:
Under these guidelines, the DMA has identified seven gatekeeper firms, five of which are American.
These firms are tasked with ensuring their operations and platform designs do not inhibit consumer and business choice. The European Commission lists a slate of do’s and don’ts gatekeeper firms are expected to heed:
Do’s:
Don’ts:
Firms that fail to uphold these stipulations are identified and charged by the European Commission for violating the DMA. These regulations are enforced by the Commission itself—composed of two committees, the High-Level Group on the DMA and Digital Markets Advisory Committee—in collaboration with national competition authorities.
The DMA came into effect with broad-based support in the European Parliament where it received 642 votes in favor, eightagainst, and 46 abstentions. Supporters of the regulation intend to curb the actions of technology firms they believe “are too big to care.” Through the DMA, Europe intends to prevent leading firms from trapping consumers in their ecosystem to the detriment of emerging rivals and possible new entrants. However, from the beginning, leading experts stressed that the law looks like a “wish list” submitted by the gatekeeper firms’ rivals.
According to CSIS’s analysis, assuming a 10 percent probability of being fined post compliance efforts, if gatekeeper firms invest one percent of global revenue to comply with the DMA and its parallel regulation, the Digital Services Act (DSA), compliance will cost the five American firms 8 to 13 percent of EU revenue, equivalent to 34,000 to 56,000 jobs. If these firms invest two percent of global revenue, compliance costs could rise to $50 billion or 17 percent of EU revenue.
More than just kneecapping leading firms, analysts have released findings arguing the DMA will hurt smaller businesses too. In a paper published by LAMA Economic Research, the authors find the DMA’s pro-competition regulations will reduce the efficiency of leading technology platforms, costing the EU’s services sector €114 billion annually.
Perhaps not surprisingly, representatives of gatekeeper firms have pushed back against the laundry list of don’ts and argued the gatekeeper identification criteria disproportionately target American firms. In a blog post by Google’s Head of Competition, Oliver Bethell argues that the DMA has materially degraded user experiences since coming into effect. Consumers now complete 50 percent more searches to get to their desired destinations; businesses report 30 percent less traffic to their sites, and European citizens are increasingly at risk of cyberattacks.
Apple recently released a statement reflecting on the impact of the DMA on its products, saying EU regulations have delayed the roll out of advanced features to the EU, made the App Store less intuitive and more susceptible to harmful app listings, and initiated a wave of new privacy concerns. The company argues forcing compliance has actually reduced consumer choice and differentiation, and the DMA is failing to level the playing field with firms like Samsung not subject to the gatekeeper rules despite being the smartphone market leader in the EU.
The Trump administration has largely echoed the sentiments of the U.S. technology giants. In trade negotiations and in public statements, President Trump and his advisers have called upon the EU to dilute the Digital Markets Act. Peter Navarro, a top Trump trade adviser, has argued that American businesses are increasingly facing a “web” of economic barriers abroad designed to stifle their success. In the EU, he highlights the use of “lawfare” to single out American technology leaders. United States Trade Representative Jamieson Greer has also argued to Congress that it is unacceptable for the United States’ supposed allies to discriminate against U.S. tech champions through regulation.
Despite widespread backlash and increasing pressure from Washington and businesses to revise the DMA, enforcement actions against digital gatekeepers have continued nonetheless. Predictably, enforcement actions and ensuing penalties have led to litigation.
Meta was designated a gatekeeper in September 2023, and several of its platforms were listed as relevant core platform services. After investigating, the Commission determined that Meta’s “pay or consent” advertising model violates the DMA. In Meta’s existing advertising scheme, users must consent to Meta accessing their personal information for more targeted advertising, unless they decide to pay a premium rate to opt out. This model has generated a 99 percent consent rate, with many critics arguing that such a rate indicates that Meta is not providing a suitable alternative.
For its breach of the DMA, Meta was fined €200 million, a decision the company has since appealed in the European General Court, the second highest court in the bloc. This month, Meta reached an agreement with the Commission to avoid future fines in exchange for providing a revised advertising scheme where users can consent to targeted advertising or agree to share lesspersonal data and receive a less personalized user experience. The Commission will monitor the updated model after its implementation in January 2026 to see if it complies with the DMA. If the new scheme fails to uphold the DMA obligations, Meta risks daily fines of 5 percent of average worldwide daily turnover.
Apple has experienced a similar fate to Meta. Many of its services were identified as falling under the gatekeeper's CPS umbrellathough following back-and-forth discussions; iMessage was removed from this list. The same day Meta received its fine, Apple’s App Store was found guilty of violating the DMA’s anti-steering policy. Per DMA guidelines, Apple is required to ensure that app developers distributing their apps via the App Store are allowed to inform customers, free of charge, of alternative offers outside the App Store, and direct them toward these purchases. For breaching this DMA requirement, Apple was fined €500 million, a sum which Apple’s representatives have called “unprecedented.” Apple has since appealed the Commission's decision in the European General Court and adjusted its App Store in hopes of avoiding the daily 5 percent fines (roughly €50 million).
Alphabet has managed to evade DMA fines so far, but two of its CPSs have come under scrutiny for potentially violating regulations around self-preferencing, steering, and discrimination against publishers. On March 19, 2025, the Commission released preliminary findings that Google Search promotes Alphabet’s vertical search services (VSSs) including Google Flights, Hotels, and Shopping over others while Google Play—Google’s App Store equivalent—prevents app developers from directing consumers to better offers outside Google Play much like Apple.
VSSs are search engines linked to specific sectors, like airlines or hotels, and allow users to compare prices and offerings across different brands. The EU Commission argues that elevating Google’s VSSs to the top of search results disadvantages similar services offered by firms like Kayak or Skyscanner. In response, Alphabet has committed to modify Search to provide each relevant VSS with its own box atop search results. However, despite these efforts, recent reports suggest Alphabet will face fines early next year. Separately, Alphabet is also expected to face fines for its Google Play violations despite some tweaks to the platform.
An investigation was also launched in November to consider whether Google’s “site reputation abuse policy” unfairly suppresses traffic to certain media outlets and publishers’ sites. Google argues this policy is designed to protect consumers from deceptive, low-quality content.
ByteDance is one of the two non-U.S. firms identified as gatekeepers—along with Netherlands’ Booking—but so far, its CPS, TikTok, has not been found in violation of the DMA. The fact that the Chinese firm has evaded hefty non-compliance fines has contributed to the narrative that the DMA disproportionately targets American firms. However, ByteDance would likely argue it should not have been designated as a gatekeeper in the first place, since it is the only gatekeeper firm which does not meet the €7.5 billion EU turnover threshold. Instead, the EU designated ByteDance as a gatekeeper for its €75 billion global market capitalization.
The Digital Markets Act offers lessons for EU policymakers seeking to balance competition and overregulation, for governments considering DMA-style policies, and for technology firms navigating an increasingly interventionist regulatory environment.
First, the DMA represents a deliberate EU choice to promote competition primarily through top-down regulation of large incumbents. When regulators seek to foster innovation and competition, they generally have two levers: accelerating smaller players through pro-business policies—such as tax incentives, grants, and streamlined procurement—or constraining larger players through antitrust enforcement, anti-gatekeeping rules, and other obligations. The DMA prioritizes the latter approach.
While this strategy has merit, it reinforces a growing perception that when Europe cannot lead in technology, it leads inregulating it. As emphasized in the landmark Draghi Report on European competitiveness, excessive regulatory complexity has become a structural impediment to European innovation. Regulatory barriers are “particularly onerous” for digital companies, and today the EU’s technology sector is governed by 100 tech-focused laws and 270 regulatory bodies across the bloc.
Although the DMA is framed as pro-innovation because it aims to foster competition and prevent digital market gatekeeping, the scope and complexity of its rules make compliance costly and time intensive. This has disincentivized leading technology firms from diffusing cutting-edge technologies in the EU economy. Feature delays may seem like a minor inconvenience, but they speak to the EU’s broader technological lag. There is little evidence, so far, to suggest these measures have had a measurable positive impact on European technology innovation.
Second, the DMA has highlighted the challenges associated with regulating unilaterally. By crafting the DMA without U.S. partnership, the EU opened itself up to backlash when five of the seven identified gatekeepers were American. Enforcement actions—particularly those involving such significant fines—have challenged already strained U.S.-EU relations. The European Commission has taken genuine steps toward working with gatekeeper firms to achieve compliance through workshops and dialogues, but every solution to non-compliance has led to unforeseen consequences in reduced efficiency and consumer protection—all while doing little to win back the United States’ favor.
Third, translating principles like interoperability, anti-steering, non-discrimination, and data privacy into technical standards has proven difficult. The DMA’s demands have resulted in product feature delays as firms have had to spend additional time squaring compliance demands with typical firm priorities like performance and data security.
Fourth, despite the challenges with implementing the DMA, digital market regulations will likely proliferate globally. Japan enacted a Smartphone Act in 2024, aiming to curb leading firms’ influence on digital markets, and India is weighing a Digital Competition Bill which experts say—like the DMA—struggles to differentiate harmful anti-competitive behavior from legitimate business strategy.
While the challenges of digital regulation are abundantly clear, the desire to do something about anti-competitive practices in the digital economy seems to carry greater weight.
William A. Reinsch is senior adviser and Scholl Chair emeritus with the Economics Program and Scholl Chair at the Center for Strategic and International Studies in Washington, D.C. Michael H. Gary was a research intern with the Economics Program and Scholl Chair in International Business at CSIS.
For more analysis on how states interact in a transitioning global economy, check out our blog series, Charting Geoeconomics.