The UK Government has announced plans for a new competition regime for technology giants, including those funded by digital advertising, such as Facebook and Google. The plans are outlined in the government's response to a study conducted by the CMA on the online platform and digital marketing market.
A dedicated Digital Markets Unit will be established within the Competition & Markets Authority (CMA) to implement and enforce a new statutory code of conduct for dominant digital platforms. The code will ensure that consumers and small businesses are treated fairly, giving consumers more control and choice over home their personal data is use and allowing small businesses to better promote their products online. The code will also support the sustainability of the news publishing industry.
The new Digital Markets Unit will start work in April 2021 and could have the power to block, suspend and reverse decisions of technology companies, force them to take specific actions to comply with the code, and impose fines for non-compliance. Digital platforms with significant market power (strategic market status) will be required to be more transparent about their services and how consumer data is being used; give consumers a choice over whether to receive personalised ads; and blocked from imposing restrictions on customers that make it hard for them to use competing platforms.
New rules will protect news publishers
The code will also help small businesses with fair access to platform services including digital advertising. It could also be used to make sure dominant digital platforms do not impose unfair terms, policies or conditions on certain business customers, such as news publishers. Dominant players can currently impose terms on news publishes that restrict their ability to monetise their content.
The UK Government will consult on the form and function of the Digital Markets Unit in early-2021. The Unit will be informed by the work of the Digital Markets Taskforce, which was established earlier in 2020 to advise the government on the development and implementation of pro-competition rules. The Taskforce is due to report by end-2020.
The CMA welcomed the government's response to its online platforms and digital advertising market study. CMA Chief Executive Andrea Coscelli said that a new pro-competition regulatory regime would allow the government to tackle the market power of the tech giants and provide protection for consumers and businesses.
