The UK is to establish a new tech regulator that will oversee the activities of social media platforms such as Facebook and Google.
The new Digital Markets Unit will form part of the Competition and Markets Authority (CMA) and will oversee a new code of practise which is due to start operating in April 2021.
The new code will mean that consumers will be given more choice and control over how their data is used, according to the government.
Digital secretary Oliver Dowden said: “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.
— Oliver Dowden (@OliverDowden) November 27, 2020
The move is also designed to allow small businesses to promote their products online with the new code seeking to establish fairer business practises.
Business secretary Alok Sharma said: “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.”
The government has said that the new unit could be given powers to suspend and reverse the decisions of social media platforms. It could also order them to take down content and issue fines in the case of non-compliance with the code.
The government’s move comes after a report by the CMA found that lack of competition in digital markets was stifling the development of new customer services.
The report noted that both Google and Facebook were both consistently earning profits well above what's required to reward investors with a fair return - £1.7 billion more in the case of Google and £650 million more for Facebook.
Andrea Coscelli, the chief executive of the CMA, said: “Only through a new pro-competition regulatory regime can we tackle the market power of tech giants like Facebook and Google ensure that businesses and consumers are protected.
The regulator will also provide protection to the news publishing industry, which a House of Lords Communications and Digital Committee report published on 27 November warned is being damaged by the "dysfunctional" online ads market driven by Facebook and Google.
Damian Collins, the former chairman of the committee said: “People always ask, why is it that we build companies that then sell out to the big tech firms? Well, one of the reasons could be that those big tech companies stifle the market. We need someone who can stand up for the start-up companies that are trying to break through in this space.”
— Damian Collins (@DamianCollins) November 27, 2020
The UK's move echoes similar developments in other jurisdictions in the United States the Department of Justice has hit Google with an antitrust lawsuit alleging that it's using its monopoly position to stifle competition. Meanwhile the European Union is set to unveil its Digital Services Act next month which will force big tech companies to reveal how they rank online content.
