In the ever-evolving realm of digital regulation, Google has issued a stark warning about the European Union’s Digital Markets Act (DMA), arguing that the landmark legislation is inadvertently harming the very users and businesses it aims to protect. Launched in 2022 to curb the dominance of tech giants and foster competition, the DMA designates companies like Google as “gatekeepers” and imposes strict rules on how they operate in the EU. But in a recent blog post from Google, the company details how these rules are leading to unintended consequences, such as reduced traffic to small businesses and heightened cybersecurity risks for consumers.

Google’s critique centers on changes to its search engine, where the DMA mandates that results must treat rivals more fairly, often by linking to aggregator sites rather than directly to businesses. This shift, according to Google, has caused a 30% drop in direct clicks to hotels, airlines, and merchants in Europe, funneling traffic instead to large intermediaries that charge hefty commissions. The result? Higher prices for consumers and squeezed margins for small enterprises, which the DMA was ostensibly designed to empower.

Navigating the Trade-Offs in Search Innovation

Beyond search, Google highlights how the DMA’s interoperability requirements are stalling product innovation. For instance, the company delayed rolling out advanced AI features in the EU due to regulatory uncertainty, leaving European users without tools available elsewhere. This echoes concerns raised by Apple in its own statement on the DMA’s impacts, where it warned of privacy risks from forced changes to app ecosystems. Google’s post, published just days ago, calls for a “reset” through clearer guidelines and evidence-based enforcement to mitigate these harms.

The plea comes amid broader industry pushback. In a piece from Android Authority, experts note that Google’s complaints align with a growing chorus, including from Apple, suggesting the DMA’s implementation is backfiring by prioritizing theoretical competition over practical user benefits. Posts on X, formerly Twitter, from figures like Epic Games CEO Tim Sweeney, have long accused Google of “malicious compliance” with the DMA, such as imposing new fees on alternative app payments that undermine the law’s intent.

Unintended Ripples in Europe’s Digital Economy

Small businesses are feeling the pinch most acutely. Google’s data shows that since DMA compliance began in March 2024, traffic to European merchants has plummeted, with intermediaries capturing the gains. This is corroborated by a report from the Free Software Foundation Europe, which, while praising the DMA’s push for device neutrality, acknowledges enforcement challenges after its first year. The European Commission, in its official overview, defends the act as essential for fair digital markets, but Google’s response to the Commission’s recent consultation urges a pivot to protect innovation.

Critics argue this is more than corporate whining; it’s a signal of regulatory overreach. A Neowin article points out that Google’s call mirrors Apple’s, framing the DMA as a barrier to consumer-friendly features amid fears of hefty fines—up to 10% of global revenue. On X, users like cybersecurity analyst Mike Benz have tied the DMA to broader free speech concerns, suggesting it could indirectly enforce content moderation through market pressures.

Path Forward: Balancing Regulation and Growth

Looking ahead, Google’s proposed reset involves streamlining rules to allow direct business links in search while ensuring fair play. This could involve pilot programs, as Google tested in 2024 per its earlier compliance update. Industry insiders, per discussions on X from journalists like Tom Warren, see this as a pivotal moment for the DMA’s evolution, potentially influencing global tech policy.

Yet, the Commission remains steadfast. Recent news from Euronews highlights ongoing complaints against Google for restricting user choices, underscoring the tension. As Europe grapples with these dynamics, the DMA’s future hinges on whether regulators heed calls for adjustment or double down on enforcement. For now, Google’s intervention underscores a critical debate: how to regulate tech giants without stifling the digital economy they underpin.