UK creates new digital regulator to impose code of conduct on tech giants thumbnail

UK creates new digital regulator to impose code of conduct on tech giants

Global tech giants will be subject to a new regime under the UK’s Digital Markets Unit to give people more choice and control over their data

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UK govt | Tech companies | digital marketing

Global tech giants will be subject to a new regime under the UK’s Digital Markets Unit to give people more choice and control over their data and to ensure news outlets are not forced out by their bigger rivals, the government announced on Friday.

The new unit, which will be set up within the Competition and Markets Authority (CMA), will work alongside existing bodies such as broadcasting regulator the Office of Communications (Ofcom) and the Information Commissioner’s Office (ICO) to introduce and enforce a new code to govern the behaviour of platforms that currently dominate the market, such as Google and Facebook.

The new unit, which will begin work in April 2021, could be given powers to suspend, block and reverse decisions of tech giants, order them to take certain actions to achieve compliance with the code, and impose financial penalties for non-compliance.

“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,” said UK Business Minister Alok Sharma.

“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. Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren’t pushed out, he said.

Under the new code, platforms including those funded by digital advertising could be required to be more transparent about the services they provide and how they are using consumers’ data.

The new unit will set clear expectations for platforms that have considerable market power known as strategic market status over what represents acceptable behaviour when interacting with competitors and users.

“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 UK Digital Secretary Oliver Dowden.

“But there is 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,” he said.

The new proposals are also designed to help small businesses have fair access to platform services, including digital advertising, allowing them to grow their business’ online presence.

The code could be used to ensure platforms are not applying unfair terms, conditions or policies to certain business customers, including news publishers.

Currently, dominant online platforms can impose terms on news publishers that limit their ability to monetise their content, severely impacting their ability to thrive, the government notes.

The new code will govern commercial arrangements between publishers and platforms to help keep publishers in business and form a major part of the government’s work to support the sustainability of the UK’s news publishing sector.

The new unit will be informed by the work of the Digital Markets Taskforce, which was set up earlier this year to provide advice to the government on the potential design and implementation of pro-competitive measures including the methodology which will determine what companies should be designated as having strategic market status, and how a regime would work in practice.

The digital sector contributed nearly 150 billion pounds to the UK economy in 2018, driving opportunity, productivity and creativity in every corner of the UK.

Through a study, the CMA found that, among other things, a lack of competition in digital markets prevents the development of new, valuable services for consumers, and results in higher prices for businesses using the platforms, which are then passed on to consumers.

The CMA’s market study was commissioned by the government as part of a series of steps to promote competition in this area. The government said it will consult on the form and function of the Digital Markets Unit in early 2021 and legislate as soon as parliamentary time allows.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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