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Small Business Group Highlights Digital Markets Act Impact on Online Advertising

Brussels – October 14, 2021 The Connected Commerce Council (3C), a global small business organisation with more than 1,800 digitally empowered European members, today drew attention to proposals in the Digital Markets Act (DMA) that would unintentionally hurt small businesses by changing the economics of digital marketing and advertising.

“Digital marketing and advertising may be the single most important digital tool small businesses use to grow their business,” said Brandon Mitchener, a European spokesman for 3C. “Digital promotion was even more important during the pandemic, with already small margins shrinking for many SMEs. It would be a serious blow to businesses large and small if these provisions are approved and digital marketing and advertising become more expensive and less effective.”

Specifically, DMA Article 5(1)a and Amendments 601-605 would make it harder for large technology companies, including Google or Facebook, to share data across business units, even when consumers have fully exercised GDPR rights and approved these uses of their data. In addition, Amendments 691, 754, and 755 would limit how much space on a search results page Google can use not just for advertising but also for Google’s free Google My Business listing.

Basic economics rules apply to advertising and data analytics: when competition for space is limited, prices will increase, and when the amount of data is constrained, the algorithms don’t work as well, and small businesses will pay more to reach the same audience. These proposals diminish the value of digital marketing and advertising that helped sustain and grow so many businesses and jobs during the pandemic.

The Connected Commerce Council fully supports the European Commission’s goals to ensure fair competition in the digital marketplace. Competition fuels innovation and opportunity. But there is a high risk that the unintended consequences of DMA would put small businesses on a path of “digital regression” rather than digital transformation by burdening business owners and their small teams with more digital complexity and uncertainty, reduced efficiency, and higher costs.

“The Connected Commerce Council calls on the Members of the European Parliament to remember the millions of European small businesses that need digital tools to survive in the rapidly changing world,” added Mitchener. “On the heels of a global pandemic whose economic impacts are still being felt, small businesses simply cannot afford to be the collateral damage yet again in Brussels’ war with ‘big tech.’”

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