Empirical analysis reveals negative effects of the Digital Markets Act on market entry and investment opportunity, suggesting a need for regulatory adjustments.
Purpose This study aims to examine the unintended consequences of the Digital Markets Act (DMA). It focuses on the impact of the DMA on new entry and the investment environment in Europe, beyond the global Big Tech companies directly regulated by the law. Design/methodology/approach Using a difference-in-differences model, the analysis is based on a data set comprising 1,034 startup and investment records from 27 EU member countries spanning 2020–2024. This design enables a robust estimation of the DMA’s causal effects on DMA-related industries. Findings Empirical analysis shows that the DMA negatively impacted market new entry and investment in DMA-related industries. Contrary to its original intent to promote competition, the DMA has reduced the attractiveness of startups and created a less favorable investment environment. Originality/value This study provides important insights into the unintended policy side effects of the DMA. It highlights the need for regulators to consider the broader impact on entrepreneurship and market dynamics.
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Ji‐Won Yang (2025) studied this question.
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