In November 2022, the European Union’s Digital Markets Act (DMA) entered into force. This pioneering and controversial regulation aims to make European digital platform markets fairer and more competitive by curbing the power of the ‘GAMAM’ group of Big Tech businesses – Google, Amazon, Meta, Apple and Microsoft. While it is still too early to know exactly how they will respond, it is unlikely that any one of these tech giants will back down without a fight.
The DMA responds to the concerns highlighted in several international expert reports from 2019, including the Furman, Stigler and Vestager reports, which showed that core platform markets are globally dominated by one or two of the same five companies. The reports agree that the high degree of market concentration results from an unusual combination of market characteristics: strong network effects, high returns to the use of data, scale and scope economies, and the comparative ease of exploiting...