Y Combinator, one of the world's most prolific startup accelerators, has sent a letter to the Trump Administration urging it 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 letter, posted on X by YC's Head of Public Policy, Luther Lowe, argues that the DMA shouldn't be lumped in with other European tech legislation, which U.S. officials often criticize as being overbearing.

The DMA, which became applicable in May 2023, 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 has already had a major impact on American tech companies, and YC believes it is in line with values that promote American innovation.

In the letter, YC argues 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. The accelerator points to Apple's reported delay in releasing its LLM-powered version of Siri until 2027, years after competitors brought generative AI voice assistants to market, as an example of the lack of competitive pressure. YC notes that third-party developers of AI voice assistants are unable to integrate their services into Apple's operating systems, highlighting the need for the DMA.

YC's endorsement of the DMA is not entirely surprising, given the accelerator's self-proclaimed championing of "Little Tech" — an American venture-backed ecosystem of technology startups. However, it's worth noting that YC and other supposedly Little Tech-aligned VCs are becoming increasingly 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 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.

Luther Lowe, YC's Head of Public Policy, has previously expressed support for the DMA, stating that it's "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.

The implications of YC's endorsement of the DMA are significant, as it could potentially influence the Trump Administration's stance on the legislation. If the Administration were to support the DMA, it could lead to a shift in the balance of power in the tech industry, creating more opportunities for smaller startups and ventures. However, it remains to be seen how the Administration will respond to YC's call to action.

In the broader context, YC's endorsement of the DMA highlights the ongoing debate over the role of regulation in the tech industry. As Big Tech companies continue to grow in power and influence, there is a growing need for legislation that promotes competition and innovation. The DMA, and YC's support for it, represent a significant step in this direction.