EU takes aim at U.S. tech giants with Digital Markets Act

Yahoo Finance Live's Julie Hyman and Brian Sozzi report that the European Union has agreed on a new antitrust regulation for tech giants.

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JULIE HYMAN: The thing number two this morning also has to do with Europe, coming back to that for a moment. And it has to do with potential new regulations on Europe. We know that Europe has gotten-- been a little bit tougher in terms of cracking down on antitrust. And it looks like it is getting closer to that. The European Union agreeing on new antitrust regulations for the tech giants. It does still have to be passed, but this is sort of the closest they have gotten, this new Digital Marketing Act, which could constrain the abilities of these companies to operate in Europe, Sozz.

BRIAN SOZZI: Yeah, and one interesting thing here, Julie, among many is that this might mean gatekeepers-- let's say-- let's use Google, for example. Perhaps their web browser may no longer be the default option when someone sets up their device.

And I continue to think the right way to look through this, Julie, issues like this, what does it mean to the ecosystem? Keep in mind you have the likes of Twitter, Snapchat, and of course, Meta. All these companies are still trying to wade through the muck that Apple essentially created with their privacy changes. Now this could be layered onto their businesses here. You have to wonder, does this lead to future, just slower earnings growth for the entire tech space moving forward?

JULIE HYMAN: Well, the stocks aren't trading that way, right? If we look at them this morning, there doesn't seem to be any consternation being priced in that this law is getting closer to being passed. And by the way, Margaret Vestager, who is the EU's competition chief, said she expects that these rules are going to come into effect sometime in October.

So we're not really seeing any reaction to this now, but we know that regulatory overhang, both here in the US and in the European Union, has kind of been weighing on the stocks to some extent, but, you know, along with everything else, I suppose. I guess on the list of things that investors are worried about when it comes to large cap tech, this is a little bit down the list versus some of the more immediate concerns about growth and about earnings and about interest rates.