Y Combinator, one of the world’s most prolific startup accelerators, sent a letter on Wednesday urging the Trump Administration to openly support Europe’s Digital Markets Act (DMA), a wide-ranging piece of legislation that aims to crack open Big Tech’s market power.
The DMA designates six tech companies as “gatekeepers” to the internet — Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft – and limits these technology kingpins from engaging in anticompetitive tactics on their platforms, in favor of interoperability. The law became applicable in May 2023, and it’s already had a major impact on American tech companies.
In a letter to the White House posted on X by YC’s Head of Public Policy, Luther Lowe, the startup accelerator argued that the DMA shouldn’t be lumped in with other European tech legislation, which U.S. officials often criticize as being overbearing.
Instead, YC argues in the letter that the spirit of Europe’s DMA is in line with values that promote — not hinder — American innovation.
“[W]e respectfully urge the White House to recalibrate its stance toward Europe’s digital regulation, drawing a clear line between measures that hamper innovation and those that foster it,” states YC’s letter, which was also signed by YC-backed startups, independent tech companies, and trade associations.
It’s not entirely surprising that YC would come out in explicit public support of the DMA. After all, the accelerator markets itself as a champion of “Little Tech” — an American venture-backed ecosystem of technology startups.
YC argues in the letter that the DMA opens up key avenues to create opportunities for American startups in AI, search, and consumer apps, and prevents Big Tech companies from boxing out smaller ventures.
Specifically, YC in its letter points to Apple reportedly delaying its LLM-powered version of Siri until 2027, years after competitors brought generative AI voice assistants to market. YC argues this represents a lack of competitive pressure, noting that third-party developers of AI voice assistants are unable to integrate their services into Apple’s operating systems
YC might take Big Tech to task for its reported anticompetitive behavior and take shots at companies like Apple, which it argues harms the venture-backed startup ecosystem. But YC and other supposedly Little Tech-aligned VCs are actually becoming quite influential in Washington.
Andreessen Horowitz (a16z), which published a “Little Tech Agenda” last year, spends millions of dollars trying to influence policy battles at the federal and local levels. According to data from Open Secrets, a16z’s contributions during the 2024 U.S. election cycle totaled $89 million. YC, still a smaller player in American politics, contributed around $2 million.
What’s less clear here is how the Trump Administration will respond to the DMA in the long run — and YC’s endorsement of it.
President Trump signaled in January that he would protect American tech companies from overzealous European regulators. However, Trump has also historically been tough on Big Tech firms like Apple, Google, and Meta.
During the Paris AI Action Summit in February, Vice President J.D. Vance criticized a few of the EU’s laws against tech companies, including the Digital Services Act and General Data Protection Regulation. However, Vance didn’t mention the DMA, which more narrowly targets anticompetitive tech industry practices.
Lowe told TechCrunch last year during a StrictlyVC event that the DMA is “not perfect, but at least they’re taking a stab at figuring out how do we curb the most egregious forms of self-preferencing by these large firms.”
Lowe did not immediately respond to TechCrunch’s request for comment.
