International coherence in digital platform regulation: an economic perspective on the US and EU proposals

There is broad international consensus that ex ante regulation is needed to address the market dominance of the very largest digital platforms and that there are benefits to having broadly coherent regulatory approaches across jurisdictions. Regulation in any one jurisdiction will have extra-territorial effects, and inconsistent regulation will create unnecessary costs, reduce service quality, and dampen innovation. Greater coherency in the regulation of digital markets should make regulation more effective, more proportionate, and better able to limit any negative consequences. This article considers current US and EU proposals. We compare and contrast these two proposals through an economic lens, with a focus on substance rather than legal process and enforcement. We find substantial similarity of intent and approach between the US and EU proposals but also some important divergences, which highlight areas for further consideration by the EU and the US. We note in particular that the EU proposal does not include a provision analogous to a US proposal for strengthening the merger test applicable to acquisitions by large platforms, but that it should. More generally, the more the two sets of proposals can learn from each other, the better and more coherent the final regulations are likely to be.