Media coverage about tech regulation often asserts that the United States is playing catch-up with Europe. Those who adopt this premise see the European Union’s swift enactment of legislation like the Digital Markets Act (DMA), while the U.S. has passed no comparably large or broad legislation as evidence that the U.S. has “failed to lead” on this issue.
But as home to the world’s strongest and largest tech industry, it’s clear that the U.S. has taken a different regulatory approach to Europe, and the American approach is winning out. The “playing catch-up” or “left behind” assertion mistakenly argues that the frequency and breadth of EU tech laws are what make them successful. What is not considered is whether the European approach has or will actually lead to benefits for Europeans.
Successful tech regulation shouldn’t just do something. It should do something good.
Far from being a sign of lagging behind, America’s measured stance on tech regulation emerges as a more nuanced, effective and ultimately superior strategy when compared to Europe’s hurried and supersized regulatory experiments.
Currently, the European Union is trying to implement the DMA, which given the burdensome nature of the law is a long and drawn out process. The DMA intends to curb the power of primarily American tech companies by restricting a variety of their business practices they use to be the market-leaders they are today. The United States has acted more cautiously, and while broad and burdensome legislation somewhat comparable to Europe’s DMA has been proposed, none have received congressional approval.
Caution is not indicative of indecision or a lack of action but is a strategic choice to ensure that regulation keeps up with the rapidly evolving tech landscape without stifling growth or harming consumers. Where the U.S. government has adopted its approach, it has worked and has allowed the U.S.to become dominant in the tech industry. Thankfully, U.S. lawmakers have been more willing to consider unintended consequences of regulation than their European counterparts.
Supporters of tech regulation complain that without further regulation the U.S. tech industry would slow and stagnate to the detriment of consumers. As the U.S. leads the race to AI deployment and oft-maligned big tech continues to perform strongly, there is scant evidence to support the claims of pro-regulation activists.
Some may claim that the EU’s approach to regulating tech, as they are doing with the DMA, feels more organized and intentional than our own. Alternatively, I would suggest that the EU’s political structure and norms, such as the supremacy of the European Commission over the European Parliament, give the impression of stability and direction. Yet despite this veneer, Europe’s long-term stability is frequently questioned in regards to its economy, foreign policy and political ecosystem.
The DMA’s implementation underscores the pitfalls of hasty regulation.
Within its first year, the burdensome regulation has led to the postponement of new services, such as Meta’s Threads, and the degradation of existing ones. Google Search now restricts access to popular tools to Europeans, and Apple has raised the alarm about the DMA leading to “new avenues for malware, fraud and scams, illicit and harmful content, and other privacy and security threats.” Thankfully, given America’s more thoughtful approach, we can learn from their missteps and avoid them.
Critics of the U.S. approach forget that, unlike the EU, the United States has almost 250 years of legal history and has over a century of federal consumer protection law.
We have many laws on the books that have done a great job at protecting consumers from harm, regardless of the rate of changing tech.
The European Union, which operates almost entirely separate from the governments of its member states, has only been able to broadly regulate the EU economy since the Maastricht Treaty of 1991 and doesn’t have as long a history of enforcing consumer protection laws as we do.
Indeed, the broader U.S. approach to regulation is often criticized for being too burdensome, with many Americans concerned about government power and conservatives often taking the stance that America should focus more on repealing regulations rather than passing new ones.
The strategic patience of U.S. tech regulation has contributed to an environment where innovation can flourish.
The presence of numerous global tech leaders headquartered in the United States is a testament to the effectiveness of its regulatory approach.
By comparison, the European Union is home to none of the world’s largest tech companies.
The United States’ approach to tech regulation is proving to be more effective and sustainable than the European Union’s. By not rushing to pass regulation for regulation’s sake, America is not only avoiding the pitfalls of hasty policymaking but is also fostering an environment where innovation, consumer protection and economic growth can coexist and thrive. With the world’s strongest tech industry, the U.S.’s cautionary approach to broad tech regulation provides a model for other nations to follow.