Press Release

New Report Warns of European Threat to American-Led Tech Innovation

ALEC Report Examines How American Businesses are Harmed by the EU’s Digital Markets Act

Arlington, Va. (Oct. 26, 2022) – Today, the American Legislative Exchange Council released a new report, A Threat to American Tech Innovation: The European Union’s Digital Markets Act.  The report explains why the European Union’s (EU) new sweeping technology regulations will have drastic consequences on America’s technology innovators for years to come and should not be emulated by the United States.

The European Parliament recently approved the Digital Markets Act, a new set of burdensome regulations governing technology policy within the EU bloc. European lawmakers claim the changes will “promote fairness” and “ensure transparency and accountability of online platforms.” However, their heavy-handed regulatory regime will stifle emerging American technologies. The report makes clear U.S. policymakers should instead pursue free market solutions that will encourage the next wave of tech innovation and economic growth, benefitting American users in the modern digital age.

Click here to view full report and list of platforms, operating systems, web browsers, and online search engines that will be hurt by the new EU regulations.

The report details how, in just a few short decades, the internet rapidly evolved from a clunky dial-up experience to a dynamic, high-speed mobile broadband experience. People from all walks of life interact with a vast array of digital services daily to do their jobs, educate their children, communicate with loved ones, order essential household goods and services direct to their doorstep, and much more.

While these technological innovations have delivered immense economic rewards, significant public policy challenges remain on matters such as consumer data privacy and content moderation on digital platforms. However, the European regulatory model will have a chilling effect on innovation as small and medium-sized firms will avoid investing in product lines or markets that could result in onerous regulations.

“American lawmakers would do well to reject the European approach,” said Jake Morabito, ALEC Communications and Technology Task Force Director and author of the report. “ALEC supports an alternative path, guided by the proven doctrine of light-touch regulation and free market competition that ushered in today’s era of American-led tech innovation.”

“Regulators in Brussels may claim to promote fairness and user safety, but their Digital Markets Act will hinder the ability of American companies to design superior products,” concluded ALEC CEO Lisa B. Nelson. “While some U.S. leaders may be tempted to import the EU’s Digital Markets Act, doing so would limit consumer choice and lead to higher prices for the American people.”

Read the full report here. The ALEC Principles for Communications and Technology can be viewed here.

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The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States.  For more information about the American Legislative Exchange Council, please visit: www.alec.org.

 


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