Extraterritorial Effects of the Digital Markets Act - The ‘Elusive Long Arm’ of European Digital Regulation

Abstract

The Digital Markets Act (DMA) will have significant extraterritorial effects: It applies directly – and currently exclusively – to non-European undertakings. It may shape markets beyond the EU single market: gatekeepers may decide to adhere to the EU standards on an international level and other jurisdictions may respond to the DMA with similar regulation. In this paper, we firstly assess the conditions under which digital regulation takes effect beyond the EU. We submit that the DMA meets these criteria in general as well as for specific obligations. Secondly, we discuss whether it is legitimate that the EU imposes its understanding of how digital markets should work on other jurisdictions. We suggest to consider direct extraterritorial effects to be legitimate, if there is a sufficient link to the jurisdiction, similar to the effects-doctrine in competition law and indirect extraterritorial effects, if the regulatory competition is fair, i.e. there is no (significant) asymmetry of power or the effects are proportionate to attaining digital sovereignty.

Keywords: Article 102 TFEU, Brussels Effect, digital expansionism, digital sovereignty, extraterritorial effects, DMA, DSA, hegemony, normative power, regulatory competition