EU tech crackdown a warning shot for SEA’s big tech companies

After the European Union (EU) rolls out new regulations to police big tech, Southeast Asian governments may not be too far behind. 

ASEAN flags / Photo credit: aseanbriefing.com

Earlier this year, the EU agreed on new legislation to stop the world’s largest tech companies from hurting emerging competition. These new rules on tech industry “gatekeepers” are widely seen as the potential model for similar legislation in other countries.

While the largest tech companies in Southeast Asia – at least under the standards of the EU’s Digital Markets Act (DMA) – are not yet big enough to be subject to such regulation, local authorities could already be mulling imposing their own sets of do’s and don’ts. 

If so, the tech industry would need to prepare for what these rules might look like, including potential new guardrails on the region’s biggest companies. For smaller startups, this could disrupt a tech ecosystem they rely on – but it would also give them a more level playing field.

The internet economy’s growth in the following years – and which businesses benefit from it – could be shaped by these regulations.

SEA big tech not big enough to be considered gatekeepers

The EU’s DMA set rules that would prevent big tech companies from taking personal data from third-party services for advertising purposes without user consent. It would also ban self-preferencing, which refers to ecommerce and social platforms promoting their own products and services ahead of their competitors. 

The rules apply to global tech giants like Google, Amazon, and Meta (Facebook). Under the DMA, these companies qualify as gatekeepers because they have at least an estimated US$83 billion in market cap and have earned about US$8.3 billion in yearly revenues in the European Economic Area over the past three years.

Southeast Asian governments could base their own digital competition legislation after the EU’s. This wouldn’t be the first time – data protection rules in Asia have, at least in part, been patterned after those enacted in the EU.

But if Southeast Asian governments apply the same market cap and revenue thresholds, the region’s most promising tech giants are still far from being gatekeepers.

If Southeast Asia takes its cue from the EU and rolls out its own DMAs, the local regulators would likely go after “the same guys,” says Withersworldwide lawyer Joel Shen, referring to companies like Meta, Amazon, and Apple.

“Twenty-four months down the road, I could be singing a different tune,” he tells Tech in Asia. “But right now, do I think someone like GoTo or Grab or Sea will become an immediate dominant player or become a gatekeeper for the Southeast Asian digital economy as someone like Facebook or Google have done? I don’t see that happening yet.”

See also: How China has been clamping down on big tech empires

Will new rules help the little guys?

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