Should APAC Follow the EU’s Example in Regulating Big Tech—or Is There a Better Path Forward?

Countries across Asia-Pacific are considering adoption of regulations modeled after Europe’s Digital Markets Act. Dennis Beling and Ling Dorcas Kwan outline recent developments, key challenges, and alternative regulatory models for the region.

In late 2022, the European Union’s Digital Markets Act (DMA)—a set of competition rules that apply to certain big tech firms—entered into force.

The legislation has received significant media attention of late. Some claim its main aim is to control US tech firms and see it as protectionist regulatory overreach. For others, the business model changes that big tech firms have proposed to comply with the DMA don’t go far enough. In any case, what looks like a set of clear “dos and don’ts” is complicated and resource intensive to implement in practice.

Against the backdrop of these developments in Europe, several countries in the Asia-Pacific (APAC) region are actively considering the introduction of similar rules. This article reviews the status quo and explores why APAC countries may want to take a different path.

What Is the DMA, and How Did We Get There?

The DMA was introduced to ensure contestability and fairness in digital markets by placing certain obligations and prohibitions—the aforementioned “dos and don’ts”—on large tech firms that are active in so-called “core platform services” and designated as gatekeepers. For example, the DMA prohibits gatekeepers from favoring or “self-preferencing” their own services (a “don’t”) and requires them to make their services interoperable with those of their competitors (a “do”).

The DMA is different from competition law because it (i) applies to the behavior of gatekeepers even before they engage in it (i.e., it is ex ante regulation), and (ii) does not require assessment of the economic effects of business practices or balancing of possible harms with countervailing consumer benefits or efficiencies. Thus, the DMA marks a stark departure from modern competition law enforcement, and it is worth asking how we got there.

Enforcement challenges in the digital economy are a large part of the answer. The digital transformation that gathered pace at the beginning of this century led to the emergence of digital platform businesses. Several areas of the digital economy subsequently saw the emergence of strong platforms with persistently high market shares. Complaints about anticompetitive practices eventually led to the first enforcement cases against digital platforms (notably, the European Commission’s investigations into Google, starting with Google Shopping). These cases took years to conclude, raising concerns that traditional competition law enforcement might be ill equipped to tackle anticompetitive behavior in fast-moving digital markets.

During a period of consultation, academic reports prepared for policymakers highlighted features of digital platforms that facilitate concentration and may lead to entrenchment of dominant firms. The EU concluded that ensuring fair and contestable digital markets required a new set of rules for large tech firms. Of course, this involves a trade-off. Tighter regulation always has the potential to chill benign or procompetitive behavior. In the case of digital markets, it can worsen user experience and lower product quality; it may also restrict gatekeepers’ abilities to offer innovative services. With the introduction of the DMA, the EU decided that the law’s envisaged impact on contestability and fairness outweighed any concerns about overregulation.

Countries in APAC Have Been Considering Similar Regulations

Although the DMA’s effectiveness remains to be seen, countries across Asia-Pacific have begun proposing—and sometimes enacting or abandoning—regulations closely related to the DMA.

Countries still considering ex ante regulation include:

• Australia: In December 2024, the Australian government published a proposal paper outlining a new digital competition regime. The proposal draws on previous work from the Australian Competition and Consumer Commission and includes DMA-like ex ante After a period of consultation that ended in February 2025, stakeholders now await final legislation.
• India: The country’s Ministry of Corporate Affairs released a draft Digital Competition Bill (DCB) in March 2024. The draft DCB sets out ex ante regulation akin to the DMA and follows recommendations put forward in the Report of the Committee on Digital Competition Law (the committee had been exploring the need for additional ex ante regulation of digital markets). The Indian government is currently considering stakeholder feedback.
• Thailand: In late 2024, the public hearing period for comments on the principles that will form the basis of the country’s Platform Economy Act (PEA) ended. The PEA includes DMA-like ex ante provisions that, if enacted, will apply to gatekeeper platforms.

Japan already enacted ex ante regulation with the Act on Promotion of Competition for Specified Smartphone Software in June 2024. It represents ex ante regulation akin to the DMA and shares many of the DMA’s provisions, but it is more targeted and applies only to smartphone platforms.

Some countries have decided against such regulation. South Korea abandoned DMA-like ex ante regulation proposed by the Korea Fair Trade Commission (KFTC) in the draft Platform Competition Promotion Act (PCPA). The draft law drew immediate backlash from different stakeholders, and in September 2024 the KFTC withdrew the PCPA and instead proposed changes to existing competition laws, which are intended to facilitate enforcement in the digital economy. Similarly, Taiwan abandoned DMA-like ex ante regulation proposed by its National Communications Commission in the face of strong opposition.

These developments raise key questions, which we’ll address below: Is the DMA framework well suited to APAC countries? Could it hamper the region’s burgeoning technological growth and innovation? Should regulators follow alternative models in these countries?

Why DMA-Style Regulation May Not Be the Best Way Forward in APAC 

There is a general question about whether a rigid set of rules like those encapsulated in the DMA can be appropriate at all in highly innovative, dynamic markets. It is curious, for instance, that the DMA designates ByteDance—a fairly recent entrant into social media services—as a gatekeeper, while the DMA does not apply to today’s most disruptive emerging technology: artificial intelligence (AI). Though these general concerns also apply to APAC countries, there are additional factors specific to the region.

First and foremost, the concerns that led to the introduction of the DMA—entrenchment and contestability—are less relevant in many APAC digital economies, which often have vibrant competition and homegrown competitors. For example:

• In South Korea, Naver is a top search engine and map service, Coupang is the most popular e-commerce platform, and Kakao is a popular ride-hailing service.
• China has homegrown players in all areas of the digital economy. Companies like Tencent, Alibaba, Ant Financial, and Meituan (among others) have the capabilities to compete globally and offer their services in many countries across the APAC region.
• Consumers in Southeast Asia can often choose between services offered by US, Chinese, and local players (e.g., in e-commerce significant platforms include Amazon, Lazada, Shoppee, and Tokopedia, among others).

In APAC, the benefits of trying to increase competition in digital markets via regulation will often be low—there already is competition.

Rigid per se rules of the type set out in the DMA, however, are bound to come with real costs. This is starting to become apparent in Europe. Prohibiting gatekeepers from integrating services may make it easier for challengers to enter or expand. But consumers often enjoy integrated functionality. For example, many people like having Google Maps links in their Google search results. Further, enforcing DMA-like rules is resource intensive and places a heavy burden on not only the enforcing agencies but also (perhaps even more so) the regulated tech firms. There is a risk that complex compliance requirements will direct the resources of regional tech firms away from innovation.

Unless regulation spurs competition that leads to real benefits, consumers are likely to suffer on balance. APAC regulators and legislators striving to balance the costs and benefits of regulation are likely to conclude that costs outweigh benefits. It is, of course, important to consider each market’s state of development and likely growth trajectory. Regulation may be more beneficial in mature markets with established players than in fast-growing markets with several competitors. But the level of existing competition and the capabilities of local digital players are highly relevant factors to consider.

Alternative Pathways 

Given the above, decision-makers in APAC may want to consider less-drastic ways of regulating competition in their digital markets. They could consider the following: 

• Build internal capacity first. Effective intervention in fast-moving and highly innovative markets requires a deep understanding of underlying technologies and business models. Building up knowledge and capabilities within the relevant agencies represents a great opportunity, as it is bound to speed up investigations and improve decision-making across all areas of competition law. Some APAC competition authorities, like the Competition and Consumer Commission of Singapore, have already started doing this.
• Do not move too fast. The EU has been a first mover in tech regulation, but it remains to be seen whether this will be to its advantage. Will the DMA really facilitate entry and spur innovation? It is too early to tell. It seems beneficial for countries in APAC to wait and learn from the experience in Europe—ideally while building capacity. This is especially true because several concerns about contestability in Europe apply less in APAC.
• Consider improving competition law tools instead. Numerous policy tools do not eliminate all efficiency considerations but still offer faster and more effective intervention than rigid DMA-style rules. These range from simply speeding up the enforcement of conventional laws against abuse of dominance to equipping competition authorities with additional powers to initiate investigations, gather information, and demand remedies (possibly using a lower standard of proof). The latter approach would be similar to the UK’s market study tool, which has brought about meaningful changes in areas where competition law enforcement would otherwise have been significantly more challenging.

As APAC’s technology sector continues to grow, regulation of digital markets and platforms will play a pivotal role in directing the future of the region’s economies. Smart regulatory frameworks and competition policies tailored to each country’s particular circumstances—rather than ex ante DMA-style laws—may be the best way forward.