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Govt announces watchdog for digital tech giants

Posted on: November 27, 2020 by Ian Murray

The Government has announced moves to create a new competition unit that it says will restrain the dominance of the digital giants when working with the UK’s media.

The move is in response to a report produced by the Competition and Markets Authority (CMA) earlier this year which called for the power of the such platforms as Facebook and Google who command 80 per cent of the digital advertising market to be restrained. 

This morning, the Department for Digital, Culture, Media and Sport (DCMS) and the Department for Business revealed proposals for a Digital Markets Unit that will begin to function in April, 2021.

Announcing the move, the Government stated that the “Tech giants will be subject to a new regime to give consumers more choice and control over their data, help small businesses thrive, and ensure news outlets are not forced out by their bigger rivals.

“Online platforms bring huge benefits for businesses and society. Their services are making work easier and quicker and help people stay in touch with one another. Millions of people share creative content or advertise their small business’ goods online.

“But there is growing consensus in the UK and abroad that the concentration of power amongst a small number of tech companies is curtailing growth in the tech sector, reducing innovation, and potentially having negative impacts on the people and businesses that rely on them.

“The new code 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.”

The new unit – thought to be the first ‘watchdog’ to monitor the digital giants in the world – will be part of the CMA and work with regulators including Ofcom and the Information Commissioner’s Office.

The announcement comes as the House of Lords Communications and Digital Committee warned last night that steps needed to be taken to fix a fundamental imbalance of power between news publishers and the digital platforms. Journalism faced an existential threat unless the imbalance was corrected, the Lords warned.

Announcing the new Digital Markets Unit, Culture Secretary Oliver Dowden (pictured) said: “As more and more news moves online we want to make sure our world-renowned publishers get a fair deal from the tech platforms so we can help guarantee their long-term sustainability.

“Today we are announcing plans that will benefit news publishers by preventing the application of unfair terms, conditions and policies by the tech firms using their content.

“This is a really important change to help bolster the news industry.”

 “I’m unashamedly pro-tech and the services of digital platforms are positively transforming the economy – bringing huge benefits to businesses, consumers and society.

“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.”

Business Secretary Alok Sharma said: “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.

“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.”

The UK News Media Association said: “We welcome the Government’s response today to the CMA’s market study into the digital advertising market which unearthed evidence of systematic anti-competitive behaviour and the detriment this is causing, not only to publishers but to advertisers and consumers.

 “The NMA has called for a dedicated Digital Markets Unit to regulate the tech platforms and a code of conduct to govern the relationship between publishers and the platforms.

“This should include a statutory obligation for the platforms to carry and surface news publishers’ content and to pay for its use. We are pleased that the Government has accepted the CMA’s recommendations and committed to setting up the DMU and an enforceable code which will help underpin a sustainable future for journalism. We urge the government to implement these without delay.”

Ronan Harris, vice president for Google UK and Ireland commented: “Online tools have proved to be a lifeline during the pandemic and they can help create a digital, sustainable and inclusive recovery. We support an approach that benefits people, businesses and society and we look forward to working constructively with the Digital Markets Unit so that everyone can make the most of the internet.” 

The Society of Editors approached Facebook for a comment but was informed no further statement was being made at this time.