A tough new regulator to help make sure tech giants such as Facebook and Google cannot exploit their market dominance to crowd out competition and stifle innovation online has launched.
The Digital Markets Unit (DMU), based in the Competition and Markets Authority (CMA), will oversee plans to give consumers more choice and control over their data, promote online competition and crack down on unfair practices which can often leave businesses and consumers with less choice and more expensive goods and services.
Online platforms bring huge benefits for businesses and society. They make work easier and quicker and help people stay in touch. But there is a consensus that the concentration of power among a small number of firms is curtailing growth and having negative impacts on consumers and businesses which rely on them.
In November 2020 the government announced a new unit would be set up to enforce a new pro-competition regime to cover platforms with considerable market power – known as strategic market status. The new unit has today kicked off its first work programme as it launches in ‘shadow’ non statutory form ahead of legislation granting its full powers.
The government has asked it to begin looking at how codes of conduct could work in practice to govern the relationship between digital platforms and groups such as small businesses which rely on them to advertise or use their services to reach their customers. It will take a sector neutral approach in examining the role of platforms across a range of digital markets, with a view to promoting competition
The Digital Secretary 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.
This would pave the way for the future rules of the road and is alongside the wider work being done by the government, following the Cairncross Review and the package of support through the pandemic, to boost the sustainability of the press.
Digital Secretary Oliver Dowden said: “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. 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.”
Andrea Coscelli, Chief Executive of the Competition and Markets Authority (CMA), 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.”