Europe's start-up sector fears that the European Union might weaken key digital legislation in exchange for concessions from the United States in its ongoing tariff dispute with the EU.
In a letter to the European Commission, seen by dpa on Thursday, digital associations warned against potential compromises on the Digital Markets Act (DMA), which Brussels uses to regulate US tech giants and which was the basis for recently imposed heavy fines on Apple and Meta.
The letter expressed significant concern over reports that the US trade representative had proposed temporarily suspending DMA enforcement of US tech companies as part of a bilateral dialogue with the EU.
"The DMA is not a geopolitical manoeuvre and must not be allowed to become one," the signatories, including the European Start-up Network, the German Start-up Association and France Digitale, wrote.
"We therefore urge you: Do not allow the enforcement of the DMA to be weakened or delayed," they warned.
The DMA, in effect since March 2024, aims to increase competition in digital services. The law is based on the premise that some large platform operators are so powerful that they can entrench their market position. The legislation seeks to dismantle this dominance with rules for gatekeepers.
The European Commission has identified several gatekeeper services, including those operated by US tech giants Apple, Amazon, Microsoft, Alphabet and Meta. The regulation also aims to benefit consumers by offering lower prices and better data protection.
In April, the European Commission imposed hundreds of millions of euros in fines on Apple and Meta under the DMA. The EU's actions have repeatedly caused friction with the US and added tension to the tariff dispute. Andrew Ferguson, chair of the US Federal Trade Commission, recently criticized the DMA as a form of taxation on US companies.
The Wall Street Journal recently reported that the EU and the US are nearing an agreement on non-tariff trade issues, ranging from regulations to the treatment of US tech companies. The draft appears nearly final but could still change.
This has alarmed the digital sector.
"If the EU wants to promote European tech champions, it cannot at the same time undermine the key regulatory foundations for fair digital markets," the associations warned in the letter.
The DMA is "an appropriate instrument for addressing structural imbalances in digital markets," they said.
"For start-ups and scale-ups in Europe, it is an elementary tool to ensure fair competitive conditions, market access and thus innovation."
Time is running out in the US tariff dispute with Europe. US President Donald Trump suspended high import tariffs for 90 days, with the deadline expiring on July 9.
German Economy Minister Katherina Reiche recently expressed cautious optimism about reaching a narrow framework agreement with the US.
Chancellor Friedrich Merz urged a swift decision for four or five major industries, naming Germany's key sectors as automotive, mechanical engineering, chemicals and pharmaceuticals.
