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UK Sets Up Regulator to Take On Big Tech

By Robert Bateman 

The U.K. is establishing a new competition authority to regulate digital markets and improve consumer choice.  

The new Digital Markets Unit (DMU) will be established next April, following a report in July about online platforms by the U.K.’s Competition and Markets Authority (CMA). 

The unit will “introduce and enforce a new code to govern the behavior of platforms… such as Google and Facebook,” according to a government news release last month. 

But with a handful of firms increasingly dominating the market, some experts told Digital Privacy News that they were concerned that the new regime could struggle to take on the tech giants. 

“Without the stronger measures that deal fundamentally with the sources of power of big tech and disarm the feedback loops that allow their power to continue to grow day by day, it will be an impossible task for any regulator to enforce a code of conduct against such companies,” said Michelle Meagher, author and senior policy fellow at University College London.

UK Official Speaks

A U.K. government spokesperson told Digital Privacy News: “The government has accepted the CMA’s recommendation for a new pro-competition regime for digital markets.

“We will establish the world’s first Digital Markets Unit in April and consult on its form and function in early 2021, ahead of legislating to put it on a statutory footing as soon as parliamentary time allows.”  

“The latest announcement could be a cautious attempt at threading that needle.”

Michelle Meagher, University College London.

The establishment of a new regulator was among several recommendations in the CMA’s report.

Meagher noted to Digital Privacy News that the government was “slow-pedaling the strong proposals,” such as forcing platforms to separate user data and implement “interoperability” — a technical measure that would allow consumers to switch more easily between service providers. 

‘Unashamedly Pro-Tech’

The tech sector is likely to play a significant role in the U.K. economy post-Brexit.

The government’s digital secretary, Oliver Dowden, repeatedly has described himself as “unashamedly pro-tech.”

Further, the country’s National Data Strategy, published in September, suggested a more liberal approach to regulating digital markets. 

Meagher argued that Brexit could be among the reasons that the U.K. was setting up the new regulator.  

“On the one hand, the U.K. will need to show that it is regulating up to EU standards if it wants to trade with the EU,” she told Digital Privacy News.

“On the other hand, there may be pressure … not to come out too strong against American tech giants. 

“The latest announcement could be a cautious attempt at threading that needle,” Meagher said. 

‘Political’ Motivations?

Ian Brown, a visiting professor at FGV Law School in Rio de Janeiro, told Digital Privacy News that in setting up DMU, the U.K. government likely was motivated — at least in part — by politics.

“This is a particularly ‘political’ government,” he said. “It’s always thinking: ‘Which voters will we be winning over by introducing this particular set of measures?’

“The (U.K.’s) Conservative and Labour parties have both been saying for many years that they think there needs to be stronger regulation online,” Brown continued. “They’re saying to voters: ‘We are cracking down on a whole range of harms’ that voters seem to feel are out there online.”

He also argued that the unit could help resolve tensions between traditional media outlets and digital platforms. 

“The government always mentions that this unit will deal better with the relationship between online advertising funding services and the traditional news media,” Brown told Digital Privacy News.

“The news media are a powerful political stakeholder in the U.K. and have been complaining loudly for many years about Google and Facebook ‘stealing’ all of their advertising revenue.” 

Boon to Tech Start-Ups

More fundamentally, the government may be hoping that DMU will help U.K. tech startups to break into digital markets, Brown said.

“The powers that the government want to give this DMU will make it easier for competitors to arise in social media, search and related digital markets.” 

But the government said that DMU could give consumers “more choice and control” over their data and improve digital advertising transparency. 

“The news media … have been complaining loudly for many years about Google and Facebook ‘stealing’ all of their advertising revenue.”

Ian Brown, FGV Law School, Rio de Janeiro.

Such responsibilities previously have fallen to the U.K.’s privacy regulator, the Information Commissioner’s Office (ICO). However, ICO has faced repeated allegations of lax enforcement of privacy laws against Google and other tech giants.

Brown argued that by enforcing competition law, DMU could open up the market to companies that better respected their users’ personal information. 

“One of the benefits of more competition — if there is market demand for privacy — would be that new privacy-focused social media services would spring up,” Brown said. 

“I think the government’s hope would be that people who wanted more privacy could use different services that gave them more privacy.”

Robert Bateman is a writer in Brighton, U.K.