United Kingdom govt to create Digital Markets Unit to govern tech giants

Daniel Fowler
January 16, 2021

Britain's Department for Culture, Media and Sport said the new regulator, the Digital Markets Unit, will "govern the behaviour of platforms that now dominate the market, such as Google and Facebook". The new unit is expected to begin operating in April.

The Digital Markets Unit will "support the sustainability of the news publishing industry, helping to rebalance the relationship between publishers and online platforms", a spokesman said.

"Our new, pro-competition regime for digital markets will ensure consumers have choice and mean smaller firms aren't pushed out", said Business Secretary Alok Sharma. Another of its recommendations - which were all accepted by the government - was to enable personal data mobility and open standards, making it easier for consumers to switch to competing platforms.

Both the US Congress and European Competition Commissioner Margrethe Vestager have grown increasingly concerned in recent months that big tech firms like Apple, Amazon, Facebook and Google have too much power.

Powers to suspend, block and reverse decisions of tech giants, as well as the ability to order them to take certain actions to achieve compliance with the code, have been proposed, with the threat of financial penalties for failure to follow the rules.

The unit is being created after the UK Competition and Markets Authority (CMA) said in July that existing laws were not effective and a new regulatory regime was needed to control internet giants that earn from digital advertising.

The taskforce will also come up with the methodology that's used to determine which platforms/companies should be designated as having strategic market status. It isn't clear where the "line" for big tech ends.

Andrea Coscelli, the chief executive of the CMA, welcomed the move. The expert panel recommended existing competition policy was fit for goal but that new tools were needed for it to tackle market challenges flowing from platform power and online network effects.

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Announced on Friday morning, the objective of the new agency is to "oversee a pro-competition regime for platforms including those funded by digital advertising".

The Competition and Markets Authority is set to announce plans to limit the power of Google, Facebook and other tech giants to allow space for competition for smaller businesses. Although in its final report it deferred competitive intervention in favor of waiting for the government to legislate.

Among the activities that fall under this code of conduct will be commercial arrangements between publishers and platforms.

Digital Secretary Oliver Dowden said there was a "growing consensus in the United Kingdom and overseas that the concentration of power among a small number of tech companies is curtailing growth of the sector, reducing innovation and having negative impacts on the people and businesses that rely on them".

"It's time to address that and unleash a new age of tech growth", Dowden said on Friday.

The code is hoped to give consumers a choice over whether to receive personalised advertising, and prevent the tech giants from placing restrictions on customers that make it hard for them to use rival platforms.

Mr Dowden declared the Government to be "pro-tech without being pro-untrammelled big tech", and said the new unit would "make sure publishers get a fair deal from the platforms on which they rely, so that we can support the sustainability of one of the world's strongest news publishing sectors".

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