The UK government revealed on Tuesday its proposals to boost competition in the country’s digital economy and curb the power of the currently dominant players in the sector. This starts the public consultation phase of the development of the proposals. The government’s plan is centred on the Digital Markets Unit (DMU), which was established within the UK’s Competition and Markets Authority in April.
Currently a non-statutory body, the UK government now proposes to greatly increase its powers over the sector, turning it into a watchdog for the industry. The explicit objectives are to support the growing British digital technology sector, improve competition, prevent abuses of power by the dominant players and benefit consumers.
“The UK’s tech scene is thriving but we need to make sure British firms have a level playing field with the tech giants, and that the public gets the best services at fair prices,” affirmed UK Secretary of State (Cabinet Minister) for Digital, Culture, Media and Sport Oliver Dowden. “So we will be giving our new Digital Markets Unit the powers it needs to champion competition and drive growth and innovation, with tough fines to make sure the biggest tech firms play by the rules.”
Among the proposed powers for the DMU is the ability to designate tech firms with significant and entrenched positions in the market as having Strategic Market Status. Companies so designated will then have to follow new ‘rules of acceptable behaviour’ regarding competitors and customers.
The upgrading of the powers of the DMU will be accompanied by the imposition of a new and mandatory code of conduct for tech companies. This will establish how such companies will be expected to behave regarding such matters as fair trading, trust, transparency and open choices. Such required behaviours could include ensuring that third party enterprises that depend on one of the sector giants are not prevented from doing business with a competitor of that giant. Or such sector dominant players being banned from forcing their clients into using mandatory or default associated services.
“Nobody wants to see an unassailable monopoly and our common sense reforms will help protect consumers, support ground-breaking new ideas and level the playing field for businesses,” pointed out UK Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng. To achieve this, the DMU will be given “robust” powers of investigation and enforcement. These could include powers to halt, forbid and reverse behaviours by giant tech companies that violate the code. They could also include the power to levy fines of up to 10% of a company’s turnover.