Digital vs. Brick-and-Mortar SME Economy:
A DMA Dilemma

By Ivan Štefanec MEP, President of SME Europe

As a Member of the European Parliament and as the President of the Board of SME Europe, I have always been keen to represent the voice of small entrepreneurs, and to assess the impact of EU legislation on their businesses.

Implementation of new regulations, even those seemingly technical or targeting a limited number of companies, always has broader effects, and the DMA is no exception. The DMA aims to enhance contestability and fairness in digital markets. I wholeheartedly support the alignment with our values applied to Big Tech, a Regulation. The way we apply these new rules matters, with our goal as European policymakers being to support the flourishing of our economies.

An aspect of the DMA has garnered attention: Google’s changes on the way they display search results, introducing features to give more visibility to aggregators like online travel agencies, such as Booking.com and comparison shopping services. Consequently, searching for a hotel or restaurant in Bratislava on Google will now yield more results from a handful of aggregators, some of them being monopolies, most non-European, rather than directing immediately to the hotel’s website.

The consequences of this seemingly minor change are substantial, documented by the hotel industry: since the new search format’s rollout, European hotels have seen a 30% drop in web traffic and clicks on their websites. This implies that to maintain their current visibility, hotels must pay more for ads on search engines and commission fees to aggregators.

The European hospitality sector is crucial to the EU’s economy and society, with over 2 million businesses employing 10 million people. It stands as a cornerstone of economic activity, contributing approximately 2-3% to the total EU GDP and serving as a catalyst for economic growth. The sector, characterized by a high level of entrepreneurship, sees 99% of businesses classified as small and medium-sized enterprises (SMEs).

The DMA should not pit larger gatekeepers against smaller ones but rather enable European businesses to thrive and grow. It should not prioritize protecting a few online businesses with a modest EU footprint in terms of jobs but instead focus on the many SMEs that form the cornerstone of our economy.

MEP Ivan Štefanec, IMCO, ITRE, DROI Committees, Head of the Slovak EPP delegation, President of SME Europe

The publication of this document received financial support from the European Parliament. Sole liability rests with the author. The European Parliament is not responsible for any use that may be made of the information contained therein.