The UK government must give the Digital Markets Unit (DMU) the legal power to impose a “pro-competition” regime in order to restore the balance of the technology giant’s relationship with consumers and businesses.
The government’s regulatory proposals will allow the DMU to identify companies with “strategic market status” (expected to include Meta, Google, Amazon and Apple), as well as impose new, binding codes of conduct against those companies that dominate the United States. kingdom. digital markets.
Failure to comply with the DMU and its rules could result in fines of up to 10% of annual global turnover for technology companies, with additional penalties of 5% of daily global turnover for each day the infringement continues. Senior managers will also face civil sanctions if their companies fail to properly engage with DMU’s requests for information.
The government says this will force the largest technology companies to treat both consumers and other companies more fairly.
“Technology is revolutionizing the way thousands of UK companies do business – helping them reach new customers and providing a range of instant online services at people’s fingertips. But the dominance of several technology giants is driving out competition and stifling innovation, “said Digital Minister Chris Philip.
“We want to level the playing field and equip this new technology regulator with a range of powers to generate lower prices, better choice and more control for consumers, while supporting content creators, innovators and publishers, including in our vital news industry. ”
The government added that behavioral requirements for major technology companies will include making it easier for people to switch between phone operating systems and social media accounts; to pay fair news publishers for online news content; and reporting on acquisitions and mergers before completion to the Competition and Markets Authority (CMA) to decide whether or not to investigate.
Technology companies are also expected to fulfill new obligations of trust and transparency, such as warning smaller businesses that rely on their platforms and search engines for changes in algorithms that could drive traffic from their sites and reduce revenue and to give users more control over how their data is used.
The powers of the DMU will be given to intervene in the root causes of market dominance include the ability to force firms with strategic market status to share data with smaller competitors in order to limit their advantage; resolving price disputes between platforms and news publishers; as well as stopping, blocking and reversing behavior by companies that violate the requirements for behavior.
However, the government said the exact conduct requirements for companies covered by the DMU would be determined when it introduced the legislation.
The regime, described in detail in the government communication, was informed in part by a public consultation launched in July 2021, which received 105 written statements from a number of technology companies, trade associations, scientists and campaign groups.
“The government’s decision to help clarify the scope of the regime and ensure that codes of conduct are flexible and personalized is a welcome step forward, as is a more focused approach to merger reform and the minimum income threshold it will provide. smaller companies are assured that they will not be in the range, “said Neil Ross, associate director of policy at TechUK.
“However, the consultation’s response raises key outstanding issues regarding key terms and arbitration mechanisms. It is also unclear when the new regime will take effect.
There is no legislative schedule
The creation of a new regulator of digital markets was one of the recommendations in the Furman report of March 2019. Unlocking digital competitionwho says a guardian with skills in technology, economics and behavioral sciences needs to be created to set out the “rules of the game” for companies in the sector.
And later market research by CMA in July 2020, found that the lack of competition in the UK’s digital markets hindered consumers from accessing new services and directly harmed smaller businesses.
Plans to establish a DMU were then unveiled in November 2020, and the unit was officially launched illegally within the CMA in April 2021, when work began on developing legally binding codes of conduct to prevent anti-competitive behavior of digital markets. .
Since its inception, the DMU has been operating at a limited capacity and has been unable to take action against technology companies, as the UK government has not yet approved legislation that formally establishes its oversight powers. However, the government has not yet committed to a precise timetable for the legislation, which it says will be introduced “in a timely manner”.
Simon Elliott, Aquia
In February 2022, Philip told the House of Lords Committee on Communications and Digital Technology that there was no indication of when the DMU rules would be introduced, as there was no intergovernmental agreement on a legislative timetable.
Andrea Cosselli, CMA’s chief executive, said the supervisor was “ready to help the government to ensure that legislation can be presented as quickly as possible so that consumers and businesses can benefit.”
Computer Weekly asked the Ministry of Culture, Media and Sports if it could be more specific about the legislative schedule, but declined to comment.
Simon Elliott, senior technical director at software company Acquia, said that while these latest developments are encouraging, with no specific plans for when these new rules will take effect, the disappointment remains.
“Greater control of business practices is a critical measure to prevent social media and big technology giants from using their market dominance to drive out competition and stifle innovation. “The reported scale of the fines being considered for those companies that do not comply with these new competition rules is significant and should be welcomed,” he said.
“However, the disappointment remains in time. There are still no concrete plans for when the new rules will be introduced. Consumer demand for privacy has never been stronger – research shows that only 58% of consumers in the UK trust brands to process their personal data. The business practices of these technology giants need to be subject to greater scrutiny so that we can get rid of the non-transparent use of data, which undermines consumer confidence and puts young businesses at an unfair disadvantage vis-à-vis dominant market operators.
Rocio Concha, Director of Policy and Advocacy for the Consumer Surveillance Organization Which ?, added: “The United Kingdom has the opportunity to set an international standard for promoting competition in digital markets. After taking the step to establish and fund the DMU last year, the government must give it the tools it needs to do its job. The queen’s speech next week [on 10 May] It is a golden opportunity to introduce the necessary legislation – and ministers must use it. “