Just over a year after launching a special unit focused on digital markets in national competition control, the UK government has focused on what this new Big Tech regulator will focus on – including confirming that it will be able to levy fines. up to 10% of global annual turnover if the platform giants do not comply with individual codes of conduct.
However, the government has not yet confirmed when it expects to pass the law to expand the powers of the Digital Markets Unit (DMU) – saying only that it will introduce legislation to put it on a statutory basis “in due course”.
Yesterday late late answered Fr. consultation in connection with the new “anti-competition regime for digital markets” it launched last year, the Department of Digital, Culture, Media and Sport (DCMS) said it included “fair play” rules for big technologies that the government wants to make digital markets are more open and competitive – UK consumers will find it easier to switch between Android and iOS; between social media accounts without losing their data; and have more control over your data (e.g., by giving up “personalized” advertising).
DCMS also wants the mode to give smartphone users more choice in what search engine and messaging apps they use – so the DMU seems to be aimed at pre-loading / merging giants like Apple and Google.
Increasing competition by setting traffic rules for platform giants so that they are honest with business customers is another major goal of the reform, with DCMS advertising how it will support small businesses and startups.
“Tens of thousands of small and medium-sized businesses in the UK will get a better deal from the big tech firms they are counting on when trading online. Technical firms may need to warn small firms about changes in their algorithms that drive traffic and revenue, ”the DCMS press release said, highlighting an example of changes in search engine algorithms that could drive traffic“ from certain sites and businesses that may having a negative impact on their income ”. (Something a lot of Google competitors complained aboutfor years.)
Commenting on the statement, Digital Minister Chris Philip said:
“Technology has revolutionized the way thousands of British firms do business, helping them attract new customers and giving people access to a range of instant online services. But the dominance of several technology giants is crowding out competition and stifling innovation.
“We want to level the playing field, and we give this new technology regulator a number of powers to create lower prices, better choices and more control for consumers, supporting content creators, innovators and publishers, including in our vital news industry.”
DCMS also said the input measures “make sure news publishers can monetize their online news content and get paid fairly” – saying the DMU will be empowered to “intervene to resolve price disputes between news agencies and platforms”, indicating that the government draws inspiration from The Australian News Negotiation Act targets Facebook and Google.
Application developers will also be able to sell their applications on a “fairer and more transparent basis” under the DCMS.
Here the government is probably relying on a number of international steps force Apple and Google will give up full control relevant application store rules. (Although, the devil will be in the details of the codes of conduct that the DMU will apply, and we will have to wait an unknown amount of time to see them, as confirmed by DCMS: “The government will determine digital activities and behavior requirements for firms included the scope of the regime when it enacts legislation. ”)
According to DCMS, only “a small number of firms with significant and entrenched market power in the UK” will be determined by strategic market status and thus fall under the regime. “This will make sure that the most powerful companies will be responsible for their behavior,” – it said.
“Dmu DMU will have an arsenal of tough sanctions available to combat non-compliance, including fines of up to 10% of annual world turnover and additional fines of 5% of daily world turnover for each day the offense continues,” he added. further clarifying that the unit will be able to “suspend, block and reverse the conduct of firms that violate their requirements of conduct, ordering them to take certain measures necessary to eliminate the violation.”
“Senior managers will face civil fines if their firms do not properly engage with information requests,” DCMS also noted.
Another measure would be a commitment for a “handful” of technology giants falling within the scope of the regime (aka “having substantial and entrenched market power in the UK”) to report acquisitions to the CMA before they close so that the regulator can hold an initial assessment of the merger, “to determine whether further investigation is needed.”
Last fall, The CMA has ordered Facebook / Meta to cancel the (completed) acquisition of Giphy – based on existing rules and authority for this intervention. But in the future, the goal is for DMU to actively prevent a giant like Meta from buying a smaller competitor in the first place if / when it discovers key competition issues related to the proposed merger.
This provision seems to impose severe restrictions on Big Tech’s ability to buy and close / otherwise assimilate / crush smaller competitors – so-called “killer acquisitions” – which are widely considered terrible for consumers and competition (even if some venture capitalists may be happy to get output).
Commenting on the DMU DCMS announcement in a statement, Andrea Cascelli, CMA CEO, said:
“The CMA welcomes these proposals and we are pleased that the government has adopted a number of our recommendations that will allow the DMU to monitor the efficient and reliable mode of digital markets in the UK.
“The CMA is ready to help the government ensure that legislation is enacted as soon as possible so that consumers and businesses can benefit.”
Britain is lagging behind Europe
DMU started working in the shadow form April last yearahead of expectations “Pro-competitive” reform of technology giant oversight which the government has said it will introduce to regulate the most powerful platforms, also with so-called “strategic market status”, following similar steps in other European countries.
Germany is in the lead here – already (this year) appointed Google and Facebook / Meta under a reformed competition regime for the most powerful technology giants, after it updated the law in early 2021, meaning its Federal Cartel Office has the power to intervene more quickly to address Big Tech’s market dominance.
Back in MarchEuropean Union lawmakers have also agreed on the final details of the ex ante regime proposed in late 2020which will be applied throughout the bloc – applying a set of initial operational commitments in relation to what is coming across European legislation called the Internet “keepers”, with fines of up to 10% of global annual turnover for breach of requirements.
The EU’s previous regulation, called the Digital Markets Act (DMA), is due to enter into force next spring.
This means that the UK is already lagging behind in addressing key structural issues of competition with digital markets – issues that in some cases (such as, inter alia, in particular) have been addressed for years by its own competition authority, the Office of Competition and Markets (CMA). ). digital advertising market which he concluded was so broken that it required new powers to regulate the giants adtech; he has also, more recently, outlined previous problems with The duopoly of Apple and Google in mobile app stores).
And although the DMU is technically up and running, it does not yet have the power to curb over-powerful technology giants, allowing consumers and businesses in the UK to continue to suck out unfair terms and conditions.
It is also unclear how far Britain will lag behind.
In recent weeks, reports suggested that the government is willing to pursue a plan to more actively regulate technology giants. Although DCMS claims that ministers are still committed to reform – simply without specifying when exactly the government really put it.
Delayed reform cannot fix anything in the short or even medium term, given how much time is usually spent on regulatory regimes for procedural purposes, etc. And with such a strengthening of the Big Tech market, any delay looks costly to consumers and competition in the UK – which is no longer enough.