NEWS2 July 2020

CMA calls for new tech giant regulator

News Public Sector Technology UK

UK – A new regulatory regime is needed to govern online platforms including Google and Facebook, the Competition and Markets Authority (CMA) has said, citing concerns over their dominance in the digital ad market.

magnifying glass on laptop

Following its investigation into online platforms and the digital advertising market, the competition regulator said current laws and its existing powers are not sufficient to regulate tech platforms.

Facebook and Google have developed ‘such unassaible market positions that rivals can no longer compete on equal terms,’ the CMA said, adding that both have ‘unmatchable access to user data’ to target advertising. 

The regulator proposed that a new ‘Digital Markets Unit’ should have the power to enforce a code of conduct on tech platforms, impose fines if necessary and increase competition. This would include ordering the breakup of platforms where necessary, the CMA said. 

Specific recommendations for a new regulator include the ability to force Google to share its click and query data with rival search engines to allow them to compete and order Facebook to increase its interoperability with competing social media platforms.

The regulator has formed a digital regulation cooperation forum (DCRF) with the Information Commissioner’s Office (ICO) and Ofcom to work together to develop a joined-up regulatory approach to digital markets.

The three bodies have also launched a digital markets taskforce to build on the report’s findings and advise the government on how a new regulatory regime should be designed. The CMA has published a call for information and the taskforce will provide advice to government by the end of the year. 

The CMA launched its review of the digital ad industry last year, looking at whether tech giants were harming competition.

Andrea Coscelli, chief executive of the CMA, said: “Through our examination of this market, we have discovered how major online platforms like Google and Facebook operate and how they use digital advertising to fuel their business models. What we have found is concerning – if the market power of these firms goes unchecked, people and businesses will lose out. People will carry on handing over more of their personal data than necessary, a lack of competition could mean higher prices for goods and services bought online and we could all miss out on the benefits of the next innovative digital platform.

“Our clear recommendation to government is that a new pro-competitive regulatory regime be established to address the concerns we have identified and regulate a sector which is central to all our lives.”