CMA to form new UK tech regulator

The Competition and Markets Authority (CMA) will set up a Digital Markets Unit (DMU) in April, subject to legislation passing through parliament. As part of its remit, the DMU will create a statutory code of conduct for the tech industry.

The CMA’s Digital Markets Taskforce, which also includes Ofcom and the Information Commissioner’s Office, is drawing up designs for the DMU, and will present its recommendations to government before the end of this year.

Under the new code, platforms could be required to increase transparency about how they are use consumers’ data, give consumers a choice over whether to receive personalised advertising and remove barriers to customers using rival platforms.

The DMU’s creation follows a report released by the CMA in July 2020 based on its research into online platforms and digital advertising.

The findings of that research programme led to the CMA recommending the creation of a pro-competition regulatory regime to ensure the public benefited from innovative new services, rival businesses could compete on a level play field and publishers did not have revenues unduly squeezed.

That report also warned that of the approximately £14bn spent on digital advertising in the UK in 2019, around 80% of it went to Google and Facebook.

The CMA was promised additional funding by the Treasury in the spending review on Wednesday to support its new regulatory duties.

Andrea Coscelli, 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 and ensure that businesses and consumers are protected.”

In its official response to the CMA’s recommendations from July, the government said: “A new pro-competition regime would allow for swift action to pre-empt and address competition concerns.

“If carefully implemented and enforced, the regime will: boost innovation and growth across the economy; promote the overall economic health of the advertising sector; protect users against unfair or exploitative practices; enhance users’ control over their personal data and the services they use; and help support the sustainability of the press.”

Alok Sharma, UK business secretary, 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.”

Oliver Dowden, digital, culture, media and sport secretary, 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.

“It’s time to address that and unleash a new age of tech growth.” 

The News Media Association welcomed the creation of the DMU, and added that the government’s reforms should include “a statutory obligation for the platforms to carry and surface news publishers’ content and to pay for its use”.