Government announces unit to tackle big tech dominance

The Digital Markets Unit will be tasked with giving people more choice and control over how their data are used by digital giants like Facebook, Amazon and Google, as well as ensuring that competing businesses are fairly treated.

The dedicated unit will be set up within the Competition and Markets Authority (CMA). It will coordinate its work with regulators including Ofcom – which will soon take responsibility for regulating online platforms – and the Information Commissioner’s Office. It will begin work in April 2021.

A statutory code of conduct would be written, which would force online platforms to be transparent about the services they provide and how they use consumer data.

The Digital Markets Unit could have the power to suspend, block, and reverse decisions made by tech companies, as well as the ability to order them to take certain actions in order to comply with the code of conduct. Financial penalties could be imposed for failure to comply.

“I’m unashamedly pro-tech and the services of digital platforms are positively transforming the economy – bringing huge benefits to businesses, consumers, and society,” said Digital Secretary Oliver Dowden. “But there is a growing consensus in the UK and abroad 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.”

The code of conduct could also ensure that platforms do not apply unfair terms, particularly regarding news publishers; news publishers have struggled as Facebook and Google cement their dominance of the digital advertising market. According to the CMA, the duopoly accounts for 80 per cent of the £14bn spent in 2019.

Business Secretary Alok Sharma commented: “Digital platforms like Google and Facebook make a significant contribution to our economy and play a massive role in our day-to-day lives – whether it’s helping us stay in touch with our loved ones, share creative content, or access the latest news.

“But the dominance of just a few big tech companies is leading to less innovation, higher advertising prices, and less choice and control for consumers.”

Ronan Harris, VP at Google UK and Ireland, commented: “Online tools have proved to be a lifeline during the pandemic and they can help create a digital, sustainable, and inclusive recovery. We support an approach that benefits people, businesses, and society and we look forward to working constructively with the Digital Markets Unit so that everyone can make the most of the internet.”

Meanwhile, the House of Lords Communications and Digital Committee has said that a “fundamental imbalance of power” exists between news publishers and platforms. This must be addressed in order to save journalism from an “existential threat”, the committee warned.

“Publishers need platforms far more than the platforms need them and are disadvantaged by a dysfunctional online advertising market,” said Lord Gilbert of Panteg. “It’s essential that the government acts swiftly to remedy this and sets up the Digital Markets Unit as a matter of urgency.”