UK launches watchdog to counter Big Tech

Posted on April 7, 2021 by Jonathan Symcox

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A new watchdog to counter the market dominance of the likes of Facebook and Google has launched in the UK. 

Billed by the government as a ‘tough new regulator’, the Digital Markets Unit aims to ensure that Big Tech cannot exploit its position to crowd out competition and stifle innovation online. 

Based within the Competition and Markets Authority, the body which has powers to block deals – such as the recent failed merger between Seedrs and Crowdcube  it is funded from an extra £20 million which was handed to the CMA for the 2021/22 financial year to establish new units such as this. 

The DMU is, however, yet to wield any power. Recruiting 60 staff around its ‘shadow’ launch, it will not be able to levy fines until Parliament approves legislation governing its oversight power. 

That legal framework may not be in place until next year. In the meantime, it is preparing bespoke codes of conduct for companies such as Google and Facebook and figuring out how it will operate in practice. 

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The body also aims to introduce ‘pro-competitive interventions, such as forcing companies to share data with each other, and coordinate with international partners. 

Digital Secretary Oliver Dowden has asked it to work with the communications regulator Ofcom to look specifically at how a code would govern the relationships between platforms and content providers such as news publishers, including to ensure they are as fair and reasonable as possible. 

It will also work closely with the Information Commissioner’s Office and Financial Conduct Authority ‘so that consumers and businesses are comprehensively protected and the new regime is coherent and effective’. 

The DMU will be led by Will Hayter, who takes over following his work at the Cabinet Office supporting the UK’s transition out of the EU. 

Today is a major milestone in the path to creating the world’s most competitive online markets, with consumers, entrepreneurs and content publishers at their heart,” Dowden said. 

The Digital Markets Unit has launched and I’ve asked it to begin by looking at the relationships between platforms and content providers, and platforms and digital advertisers. 

This will pave the way for the development of new digital services and lower prices, give consumers more choice and control over their data, and support our news industry, which is vital to freedom of expression and our democratic values. 

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Business Secretary Kwasi Kwarteng said: “This is a significant step towards our goal of improving consumer choice and delivering better services at lower prices. 

The UK has built an enviable reputation as a global tech hub and we want that to continue – but I’m clear that the system needs to be fair for our smaller businesses, new entrepreneurs and the wider British public. 

Our new, unashamedly pro-competition regime will help to curb the dominance of tech giants, unleash a wave of innovation throughout the market and ensure smaller firms aren’t pushed out. 

CMA CEO Andrea Coscelli said: “People shopping on the internet and sharing information online should be able to enjoy the choice, secure data and fair prices that come with a dynamic and competitive industry. 

Today is another step towards creating a level playing field in digital markets. The DMU will be a world-leading hub of expertise in this area and when given the powers it needs, I am confident it will play a key role in helping innovation thrive and securing better outcomes for customers. 

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