The UK is moving forward with a major tech regulatory plan, addressing competition concerns over a “winner takes all” dynamic in digital markets.
It will create a new Digital Market Unit (DMU) to oversee a “ pro-competition ” regime for internet platforms, including those funded by online advertising, such as Facebook Yes Google – announced today the Department of Digital, Culture, Media and Sports (DCMS).
It is evolving at a steady pace, with the new unit due to start work in April. Although the law needed to empower the new regulator to perform interventions will take longer. The government said it would consult on the form and operation of the unit in early 2021 and legislate “as soon as parliamentary time permits”.
A central element of the plan is a new legal code of conduct aimed at giving platform users more options and third-party companies more power over the intermediaries that host and monetize them.
The government suggests the code could force tech giants to allow users to opt out of behavioral advertising al together, which the platform Facebook, for example, does not currently allow.
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He also wants the code to support the sustainability of the news industry by “rebalancing” the relationship between publishers and platform giants, as he puts it.
Concerns about how to support quality public service journalism in the age of ad-supported user-generated content giants have intensified in recent years, as online disinformation has been actively used to target ad-supported users. democracies and trying to influence the votes.
“The new code will set clear expectations for platforms that have market power – said strategic market status: on what represents acceptable behavior when interacting with competitors and users, ”DCMS wrote in a press release.
He suggests that the DMU will have the power to “suspend, block and reverse the decisions of tech giants, order them to take certain measures to comply with the code and impose financial penalties for non-compliance.” Although all the details should be worked out next year.
NAIL Digital The steps The working group, which the government created earlier this year to advise on the design of competition measures, will inform the work of the Unit, including how the regime will work in practice, according to the DCMS.
The working group will also develop the methodology used to determine which platforms / companies should be designated as strategic. market State.
On that front, Facebook and Google will almost certainly get the designation and be subject to DMU code and oversight, although confirmation can only come from the unit once it’s up and running. But UK lawmakers do not appear to have been fooled by big tech bogus talking points that competition is ‘just a click away’.
Decision to establish UK regulator for big tech market power follows competitive market review chaired by former economic adviser to former US President Barack Obama, Professor Jason Furman, who reported last year. The expert group recommended the existing competition policy I was fit the purpose, but new tools were needed to address the market challenges arising from the power of the platform and the effects of the online network.
Fundamentally, the Furman Report advocated a “broad church” interpretation of consumer welfare as a driver of competitive interventions, encompassing factors such as choice, quality and innovation, not just price.
This is essential given the strategic application of free point-of-use services of major technologies as a tool to dominate markets by gaining massive market share which in turn gives it the power to set terms of use. selfish. for consumers and anti-competitive. rules for third-party companies, allowing you to gain a foothold in digital healthcare.
The UK Competition and Markets Authority (CMA) has also committed to a market study of the digital advertising sector – Go to report major concerns about the power of the adtech duopoly. Although in his final report he postponed competitive intervention in favor of waiting for the government to legislate.
Commenting on the DMU announcement in a statement, Digital Secretary Oliver Dowden said, “I am clearly pro-tech and digital Platforms are positively transforming the economy, bringing huge benefits to businesses, consumers and society. But there is a growing consensus in the UK and abroad that the concentration of power between a small number of tech companies slows the growth of the sector, reduces innovation and has negative impacts on people and businesses. that depend on it. . It’s time to tackle this and usher in a new era of technological growth. “
Business Secretary Alok Sharma added: “TThe dominance of a few large tech companies results in less innovation, higher advertising prices, and less choice and control for consumers. Our new pro-competition regime for digital
The UK’s move to regulate big tech means that there is now a broad consensus among EU lawmakers that the power of the platform must be curtailed and that competition rules need the right resources to to do work.
A similar digital market regime it is expected to be presented by EU lawmakers next month.
The European Commission has said that the next pan-European ex ante regulation, which it calls the Digital Markets Act, will identify platforms that have significant market power, the so-called gatekeepers of the internet, and apply a set specific rules and obligations of fairness. and transparency in them in order to rebalance competition. Plan open algorithmic black boxes to regulatory oversight it is also at stake at EU level.
A second part of the proposed EU legislation, the Digital Services Act, aims to update the rules applicable to online businesses by setting clear rules and responsibilities for all actors in specific areas such as hate speech and illegal content.
The UK is also working on a similar regime focused on online safety, proposing to regulate a variety of damages to your Online damage white paper from last year. Although you have not yet submitted an invoice.
This summer the BBC indicated that the government has also not committed to tabling a bill next year, suggesting that its planned wider internet regulatory regime may not be in effect until 2023 or 2024 .
It seems smart for UK lawmakers to prioritize the continued power of the platform, as many of the problems arising from harmful internet content relate to the reach and amplification of a handful of tech giants.
A more competitive landscape for social media could foster competition around the quality of the community that users experience, meaning that, for example, platforms smaller than apply the rules of hate speech and no torch user privacy could gain an advantage.
Although the rules enabling data portability and / or interoperability are likely to be crucial in triggering truly dynamic and innovative competition in markets already captured by a handful of data mining and advertising giants.
Given the UK’s rush to tackle the market power of big tech, it’s interesting to recall how many times Facebook CEO Mark Zuckerberg has turned down calls from the DCMS committee asking him to provide evidence on online disinformation and digital campaigns. (including those related to Cambridge Analytica data abuse scandal) – not once but so many times we have lost count.
It seems UK lawmakers have taken note.