The Digital Markets Act (DMA), proposed by the European Commission, and aimed at controlling the power of the great digital “gatekeepers” will unwittingly trample European SMEs in the process, concludes a new report by Catalyst Research.

The warning comes at a time when the European Parliament and the European Council are studying the DMA, proposed by the European Commission in December of last year, and when the European economy begins its slow climb of growth, after the recession caused by the crisis. of the coronavirus.

“European SMEs can become collateral damage if this is done the wrong way,” says Mark Drapeau, partner and Chief Research Officer at Catalyst Research. “We've already seen where this can take us with the RGPD, the EU's flagship initiative on privacy. The RGPD, more than creating value for small and medium companies that are still struggling to implement it, created additional workload for lawyers and consultants, while adding costs and complexity”, adds Mark Drapeu.

Research conducted in the middle of the pandemic showed that digital tools helped small businesses survive and even grow during the crisis, as aggressive digital adoption generated 60% more revenue, improved customer retention by 40% and generated a 300% increase in hiring. This new report is based on a recent meeting of the Digital Markets Act Working Group, convened by Catalyst Research.

“DMA not only impacts large technology companies, but also SMEs in this sector. Concretely, start-ups that have a strong technology base will face regulatory obstacles that will increase barriers to expanding their business and, at the same time, discourage the construction of an ecosystem suited to their activity. On the other hand, other SMEs, namely those that use technology with less intensity and that have adopted digital tools and channels provided by large companies to attract new customers and leverage the internal market, will run the risk of losing the reach and efficiency of the tools and channels that are use”, highlights Joakim Wernberg, Research Director of Digitalization and Tech Policy at the Swedish Entrepreneurship Forum and member of the Digital Markets Act Working Group.

And he adds: “Currently, small and medium-sized enterprises represent 99% of all European companies and account for more than half of Europe's economic output. Most are not on the digital front and I'm not sure they have to be, as instead of developing their own solutions, they are adopting solutions developed by third parties. This means that, for many SMEs, large digital platforms represent an opportunity for them to access the market as a service. Restricting platform companies to protect smaller companies may, in this context, unnecessarily limit SMEs' market access.”

The document concludes that efforts are needed to avoid collateral damage to European SMEs in this phase of fragile economic recovery.

Earlier this year, the Connected Commerce Council's Digitally Driven: Europe report found that 42% of European SMEs, around 10.5 million businesses, see digital tools as an integral part of their business and use at least 10 different categories of digital tools.

“Tens of millions of European SMEs work and rely on software, media, advertising and commerce tools from so-called 'gatekeepers'”, says Maksim Belitski, Associate Professor of Entrepreneurship and Innovation at Henley Business School in the UK and another member of the group. job. "It is important to emphasize that these SMEs rely on platforms made available by the gatekeepers in large part because of their size and scale, as these attributes help small businesses reach a wide audience and in a very targeted way."