A new regulator, the Digital Markets Unit (DMU) has just launched in the UK and will oversee tech giants such as Facebook and Google to ensure they do not exploit their market dominance to push out new competition.
The regulator is a unit within the Competition and Markets Authority (CMA) and will act to enforce competition rules in the online environment. There is much concern that the tech giants are swallowing up competition and are dictating the online market place for which many companies rely to advertise their content.
The Digital Markets Unit will seek to implement a code of conduct that governs this relationship and prevent exploitation through unfair practices. The Digital Secretary, Oliver Dowden, has asked the Digital Markets Unit to investigate how relationships between the digital giants and their users such as news publishers would be affected by this code in a way that is fair for both sides.
“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.”Digital Secretary, Oliver Dowden
According to statistics, Google controls 85.70% of the search engine market within the UK with their nearest competitor, Microsoft owned Bing controlling 10.65%. Using this dominance they can charge 30-40% higher prices for search engine advertising. Around £14bn was spent on digital advertising in the UK in 2019 which will influence the Digital Markets Unit with their recommendations for future legislation.
Additionally, the Digital Markets Unit will also seek to stimulate growth within the sector to encourage new startups as well scaling up existing companies to encourage digital trade within UK shores.
Business Secretary, Kwasi Kwarteng stated that the government is “unashamedly pro-competition” and wants to “curb the dominance of tech giants” to assist with innovation and smaller firms.
“The UK has built an enviable reputation as a global tech hub and we want that to continue – but I’m clear that the system needs to be fair for our smaller businesses, new entrepreneurs and the wider British public.”Business Secretary, Kwasi Kwarteng
The Digital Markets Unit will work closely with other teams within the CMA to enforce rules against anti-competition practices that lead to a poor online experience for consumers and businesses requiring digital services. In their first year they will work with businesses, the government and academics to compile the evidence required to implement changes as soon as the legislation has changed.
Chief Executive of the CMA, Andrea Coscelli said: “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.”
The UK will also be working with other jurisdictions as part of its presidency of the G7. Oliver Dowden will be meeting with his counterparts this month to try and establish a coordinated effort that will allow countries to have similar policies with the aim of allowing the UK to shape the debate in this area.
The Digital Markets Unit will coordinate with other regulators including the Information Commissioner’s Office, Ofcom and the Financial Conduct Authority in what will become a new digital regime to protect consumers and smaller businesses. Will Hayter will lead the DMU having completed his work at the Cabinet Office assisting with Brexit.
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