The focus of the European Commission’s recently published second annual enforcement report on the Digital Markets Act (DMA) was, as expected, on what has been achieved. The report celebrates the concrete, measurable steps the Commission has taken to rein in “gatekeeper” platforms: investigations launched, compliance workshops held, remedies imposed.
These are the seen effects—the visible indicators of action, the metrics that suggest progress (or, at least, movement). But as the 19th century French economist Frédéric Bastiat might remind us, there are also the unseen effects: the costs, tradeoffs, and unintended consequences that do not show up in press releases or enforcement statistics, but which may matter just as much.
The Seen
The DMA’s visible achievements fall into three categories: designating new core platform services as “gatekeepers”; monitoring the implementation of substantive obligations; and addressing noncompliance with enforcement actions.
In its first year, six firms’ core platform services were designated as “gatekeepers” under the DMA’s terms—five American (Alphabet, Amazon, Apple, Meta, and Microsoft) and one Chinese (ByteDance). Last year saw two gatekeepers added to the list: the online-reservation platform of Booking.com, and Apple’s iPad OS.
By contrast, the EC refrained from designating TikTok Ads and X.com (formerly known as Twitter) as gatekeepers. It accepted ByteDance’s arguments that TikTok Ads does not meet the qualitative criterion of being “an important gateway” between business and end users (a separate decision to designate TikTok itself as a gatekeeper is pending appeal before the European Court of Justice). A similar conclusion was reached for X and X Ads; the Commission did not consider these services to be important for cross-user intermediation, even though they meet the quantitative designation thresholds.
Unlike 2023, when the DMA was delineating its scope of application by designating firms as “gatekeepers,” 2024 saw the DMA enter into its implementation and enforcement phase. A deadline of March 2024 was set for the initially designated firms to comply with their obligations. The Commission monitored firms’ compliance by entering into “regulatory dialogues” and—in some cases—took matters further by initiating noncompliance findings.
On the monitoring front, the Commission initiated proceedings against Apple, alleging that it was not enabling “genuine” consumer choice (through choice screens) for selecting web browsers on iOS. It also scrutinized the integration and connectivity of Apple’s ecosystem (e.g., Apple Watch and iPhone) and initiated “specification proceedings” to demonstrate how Apple could remedy alleged deficits in interoperability. Regarding Alphabet and Microsoft, the Commission “corrected” the firms’ compliance with default settings and pre-installed apps on Android and Windows devices.
In addition to engaging with gatekeepers to monitor compliance with the DMA’s substantive rules, the Commission also initiated further enforcement action in some cases. For example, it took issue with Meta’s “pay-or-consent” model, whereby Facebook users could continue using the social-media platform for free in exchange for agreeing to be served ads, or they could pay a monthly fee for an ad-free experience.
The Commission also questioned several of Apple’s practices, including its alleged noncompliance with the obligation to enable alternative distribution channels on iOS devices (third-party app stores), and a suspected breach of its “steering” duties. The latter are provisions that regulate how developers can inform users of alternative payment options for app subscriptions, including via channels outside the App Store. The Commission recently published its decision concerning the steering rules.
But these enforcement statistics are relevant largely for regulators’ end-of-year reports and periodic evaluations. The cases brought may or may not be misguided. They may or may not pass a cost-benefit analysis. In other words: the fact that an infringement decision was issued or that a compliance workshop was held says nothing about whether the DMA benefits the public. For this, one has to look under the hood.
The Unseen
Details of the DMA’s implementation paint a rosy picture of accomplishment and progress. But there are at least four kinds of unspoken effects that deserve closer scrutiny—effects that may complicate this reputation of regulatory success. Namely:
- The DMA has thus far had mixed effects for consumers and businesses;
- The DMA competes with competition law for scarce enforcement resources;
- The DMA may divert attention from matters that likely have a greater impact on the “fairness and contestability” of European digital markets; and
- The DMA may exacerbate problems in an already-inflamed transatlantic trade relationship.
Effects on consumers and businesses
Among the dubious effects that can thus far be attributed to the DMA, mandatory third-party app stores and sideloading mandates have enabled the proliferation of porn apps on iOS. Moreover, features like Apple Intelligence and the AI Suite were delayed in the EU due to concerns about DMA compliance (see here and here). Others like advanced screen mirroring and SharePlay have not been released at all for much the same reason.
To avoid “self-preferencing” accusations, Google has removed or degraded popular features from its search engine, such as quick flight lookups in search results. This came after rivals complained that the one-box Google Flights search widget was unfair (see here and here). The change caused some to initially witness traffic drops of up to 30% after Google’s first tweaks. Google wasn’t displaying direct links to flights and hotels, as this would presumably be “unfair” to hotel and flight intermediaries (see here and here). Similar to Apple, Google also reportedly held back certain AI features or products in Europe pending regulatory clarity. For example, AI overviews were launched in only eight EU member states, and after nine months of delay.
A recent report by the Chamber of Progress provides a more detailed qualitative overview of the degradation of services due to the DMA, concluding that “ [all] consumers have to show for [the DMA] are second-class digital services lagging behind the rest of the world.” The report identified increased user friction, reduced search efficiency, confusing and tedious choices, more irrelevant ads, less private and secure services, and delayed or unavailable innovations.
Another report by Carmelo Cennamo et al. found potential revenue losses of up to €114 billion “for firms in service sectors across the EU from the loss of efficiency of the most widely used digital services platforms. This corresponds to a loss up to 0.64% of the total turnover of the sectors considered.” Especially hard hit would be the accommodation sector (revenue losses of between €1 billion and €14 billion, with annual lost revenue per-worker of up to €3,579) and the retail sector (which could lose between €4.4 billion and €59 billion in revenues, with annual lost revenue per-worker of up to €1,122).
More generally, a recent study found that the market perceives a 10-20?% negative impact on businesses from ex-ante regulation. None of this is contemplated in the Commission’s annual enforcement report.
Competition for enforcement resources
One must also consider the cost—not in euros, but in institutional bandwidth—of enforcement itself. The DMA is enforced primarily by the European Commission’s Directorate-General for Competition (DG COMP), the same body responsible for applying the EU’s competition-law framework. This matters. The resources poured into DMA monitoring and enforcement—technical teams, legal experts, data scientists, policy analysts—are resources not used to investigate potential abuses of dominance, cartels, or anticompetitive mergers. Enforcement doesn’t scale effortlessly. And regulatory capacity is finite, especially for “grossly understaffed” public authorities.
The irony here is striking: DG COMP has already made digital markets a top enforcement priority for traditional competition law. The 2024 Competition Policy Report stated that the Commission is pursuing “several cases in digital markets against large digital companies.” These include cases that completely overlap with the “achievements” claimed under the DMA.
The glaring example here is Apple – App Store practices, which imposed a €1.8 billion fine against Apple for “preventing [developers] from informing iOS users about alternative and cheaper subscription services.” This demonstrates that the Commission is deeply engaged with the digital space through competition enforcement regardless of the DMA.
The point is not to present competition and DMA enforcement as substitutes; the legislative history and text clearly present the two mechanisms as complementary. It’s also true, however, that the DMA was originally pitched by invoking an imaginary consensus that traditional competition tools are too slow or unwieldy for fast-moving digital markets.
That may be true in some cases. But if that is the justification, we should ask: does the DMA actually fix a flaw in the system, or simply displace it with a different, possibly less accountable model? If traditional enforcement is “unworkable” (and the Commission’s own enforcement record raises doubts), then perhaps the answer is to reform how competition law is applied, rather than building a parallel regime that consumes the same limited resources. The risk here is one of duplication with little additional value.
Diversion from core issues
The prevailing sense that the DMA constitutes a significant institutional accomplishment may also distort policy priorities. It is no secret that the Commission sees itself not just as a market regulator, but as a standard-setter for the world. The DMA has been presented as a model for proactive tech regulation in action. There is satisfaction, perhaps even pride, in being the global frontrunner in digital rulemaking.
But this attention and energy may come at the expense of less headline-grabbing tasks. One such task is the completion and enforcement of the single common market—a project that remains unfinished decades after its launch. Despite harmonization efforts, many European firms still struggle to scale across borders. Barriers in taxation, licensing, procurement, and logistics persist. Funding ecosystems remain fragmented, particularly for startups and SMEs. When asked by the European Investment Bank what makes scaling so hard for European firms, the latter answered: availability of skilled staff, fragmented business regulations, and access to funding. Perhaps the answers to the fairness, contestability, and competitiveness of European digital markets should be sought here.
Indeed, in the current climate, the DMA risks becoming a kind of regulatory displacement activity. It channels the focus onto “gatekeepers” like Google and Apple—powerful and photogenic targets—while deflecting attention from structural problems that make life harder for European entrepreneurs. To put it more bluntly, most European startups are not failing because of platform dominance. They are failing because of fragmented markets and shallow capital pools. Yet these root causes are harder to tackle, less media-friendly, and more politically complex.
Inflaming trade wars
The European Commission’s assertive enforcement posture may be exacerbating transatlantic trade tensions, particularly given the increasingly inflammatory rhetoric of the Trump administration. From Washington’s perspective, the DMA’s focus on “gatekeepers” looks suspiciously like a euphemism for “American companies.” Indeed, most of the gatekeepers designated under the DMA are either American or Chinese. Only one, Booking.com, is European.
The Commission has argued that this is a reflection of market structure, not political targeting. But that distinction is not always appreciated on the other side of the Atlantic, especially in a political climate that views regulatory asymmetry as a “non-monetary trade barrier,” Indeed, senior U.S. officials have already expressed concern that the DMA may be operating as a de facto industrial-policy tool under the guise of competition regulation.
This tension risks triggering retaliation and undermining transatlantic cooperation on other regulatory fronts, including artificial intelligence, cybersecurity, and semiconductor supply chains. It also complicates Europe’s broader ambition to shape global tech governance. Regulatory leadership is most effective when perceived as fair and principles-based—not when it can be painted as protectionist or discriminatory.
Conclusion
For all its rights and wrongs, the DMA is the law of the land. But even as the European Commission celebrates the second year of DMA enforcement, Europe should not lose sight of what is often unseen (especially in official reports): the effects on consumers and businesses, the opportunity costs within DG COMP, the distraction from deeper single-market integration, and the risks to transatlantic alignment. These hidden effects do not lend themselves to press releases by the drivers of ex-ante rules. But they deserve a place in the public debate all the same.
