DMA’s Limited Resources May Present Challenge in Regulating Big Tech

Against the backdrop of regulation that looms in the EU — specifically through the Digital Markets Act — Big Tech looks, well, bigger.

At least when one takes into account the (arguably) limited resources that legislators and regulators are bringing to bear against the marquee names in commerce and social media: Amazon, Meta, and perhaps any number of names down the line.

The DMA will be implemented beginning in January of 2023 and is focused on the largest of tech platforms, as mentioned above, establishing rules that put guardrails around how these companies can act within the competitive sphere.

Read Also: 8 Things Tech Firms Should Know About EU’s Digital Markets Act

Among the mandates of the DMA: platforms will be restricted from showing favoritism to their own services on offer to customers or via search engines.  They are banned from using data that is gleaned by activities on their sites to use in their competitive efforts against other firms.

If the platforms are found in transgression of these and other rules, the fines can be hefty – equivalent to 10% or more of annual global sales.

But drilling down into the proposal itself, as had been introduced in December of 2021, we see that a total budgetary allocation, beginning this year and lasting into 2027, of roughly 81 billion euros will be allocated to enforce the Act; after 2027, the number given annually is about 2.7 billion euros.

Let’s examine 2026 and 2027, as noted in the text of the proposal, when the EU member nations will be spending a bit more than 16 billion euros annually.  Now compare Apple’s revenue for that latest year, which stood at about $366  billion for all of fiscal year 2021.

Not Exactly Throwing Money at the Issue 

The entire seven-year budget for the EU’s directive is less than a quarter of Apple’s own sales in a single year. Add to that the fact that the DMA has proposed a staff of 80 to oversee it all, and it becomes clear that the contest may be a bit, well, unevenly matched.

Here in the states, by way of further comparison, the CFPB’s operating budget stands at about $595 million. This is dwarfed by the billions of USD equivalent that will be spent on the DMA across the pond, but we’d argue that the relative homogeneity of the U.S. market (and its geographic concentration) might be easier to monitor than, say, 28 member states far-flung across Europe.

No doubt the regulations and the Digital Markets Act itself will be re-examined, and likely re-fashioned, as the years wear on.  But at this writing, the initial resources being deployed may not be enough to keep pace with the heady changes that mark Big Tech’s evolution on a continuous basis.