The Digital Markets Unit (DMU), based within the UK's
Competition and Markets Authority (CMA), will oversee plans to give consumers
more choice and control over their data, promote online competition and crack
down on unfair practices which can often leave businesses and consumers with
less choice and more expensive goods and services.
The UK government says it has asked the new watchdog to
begin looking at how codes of conduct could work in practice to govern the
relationship between digital platforms and groups, such as small businesses
which rely on them to advertise or use their services to reach their customers.
“Today is a major milestone in the path to creating the
world's most competitive online markets, with consumers, entrepreneurs and
content publishers at their heart,” said UK Digital Secretary Oliver Dowden.
“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,” he said.
The minister has asked the DMU to work with the country's
communications regulator, Office of Communications (Ofcom), to look specifically
at how a code would govern the relationships between platforms and content
providers such as news publishers, including to ensure they are as fair and
reasonable as possible.
This would pave the way for the future rules of the road and
is alongside the wider work being done by the government.
“This is a significant step towards our goal of improving
consumer choice and delivering better services at lower prices,” said UK
Business Secretary Kwasi Kwarteng.
“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. Our new, unashamedly pro-competition regime will help to curb the dominance
of tech giants, unleash a wave of innovation throughout the market and ensure
smaller firms aren't pushed out,” he said.
The government acknowledged that online platforms bring huge
benefits for businesses and society and make work easier and quicker and help
people stay in touch.
But there is a consensus that the “concentration of power
among a small number of firms” is curtailing growth and having negative impacts
on consumers and businesses which rely on them.
In November 2020, the UK government announced plans for the
DMU to enforce a new pro-competition regime to cover platforms with
considerable market power – known as strategic market status.
The new unit has today kicked off its first work programme
as it launches in “shadow” non statutory form ahead of legislation granting its
full powers.
Andrea Coscelli, Chief Executive of the CMA, said: “People
shopping on the Internet and sharing information online should be able to enjoy
the choice, secure data and fair prices that come with a dynamic and
competitive industry.
“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 government says it will consult on the design of the new
pro-competition regime this year and legislate to put the DMU on a statutory
footing as soon as parliamentary time allows.
The unit will work closely with the CMA enforcement teams
already taking action to address practices by digital firms, which harm
competition and lead to poor outcomes for consumers and businesses.
This includes taking enforcement action against Google and
Apple, and scrutinising mergers involving Facebook and eBay.
Alongside, the government has also published an outline of
the new unit's function and role for its first year of operation.
It includes working alongside business, the government and
academia to compile the necessary evidence, knowledge and expertise so that
once the new pro-competition regulatory regime is in place it can begin
operation as quickly as possible.
As countries around the world grapple with these issues, the
unit will coordinate with international partners so the UK remains a global
leader in shaping the debate in this area, a government statement said.
The UK is already discussing its approach to digital
competition with international partners through bilateral engagement and as
part of its G7 presidency.
The Digital Secretary will host a meeting of digital and
tech ministers in April as he seeks to build consensus for coordination on
better information sharing and joining up regulatory and policy approaches.
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