At the Innovators Network, our mission is to educate and empower scholarship that keeps the digital ecosystem competitive, open, and global, so innovation is not siloed in one area or company. As our fellows have illuminated through the years, light-touch, evidence-based frameworks unlock micro, small, and mid-sized enterprise (MSME) growth. Sweeping regulations targeting undefined and as-yet unrealized harms unintentionally fragment the ecosystem that competition authorities seek to protect. This month, I carried that message to Jeju, Korea, where I joined the U.S.–Korea Public-Private Dialogue during the Asia-Pacific Economic Cooperation (APEC) Innovation Network Forum. Our central point: resist the temptation to copy Europe’s Digital Markets Act (DMA) or other ex-ante regulatory regimes that pre-emptively restrict broad categories of mainly pro-competitive conduct by online marketplaces.
Regulate Proven Harms, Not Theoretical Ones
The DMA’s broad mandates have already produced unintended consequences, including fragmented user experiences, imposition of high compliance costs, increases in small businesses’ input costs, and the raising of new barriers to entry for small businesses, that all stunt growth and opportunity. Rather than repeating the EU’s mistakes, APEC should favor case-specific enforcement aimed at protecting competition and consumers. Regulate and enforce against proven harms (ex-post), not hypothetical ones (ex-ante).
This approach protects consumers without freezing innovation or turning new rules into de facto taxes on startups. Competition policy should seek to “build compatibility, not uniformity.” The U.S., Korea, and other APEC member economies have to harmonize rules without imposing a single overarching law for all. This means defining core concepts such as harm and the kinds of “self-preferencing” or “abuse of dominance” that are net harmful and may lead to liability. Continued dialogue between public and private stakeholders is essential. APEC competition policy does not need to copy the DMA; it needs a common playbook that is evidence-based, centers on MSMEs, and promotes regional compatibility. Test before you mandate, and don’t copy-paste regulatory frameworks from Europe, especially when they are failing to achieve their goals in the European Union.
What Innovative Competition Policy Should Look Like
APEC’s digital future depends on resisting regulatory overreach and national silos. By promoting shared standards, evidence-based competition policies, and clear regulatory frameworks, APEC member economies can ensure that digital markets remain competitive, innovative, and open. For policymakers across the region, the foundation for sustainable growth and a vibrant future is creating trust and evidence-based policies that work for MSMEs, rather than break them down.
