Is the UK shying away from Big Tech regulation?

About a year ago, the UK government set up a new unit within the Competition and Markets Authority (CMA) that is specifically charged with keeping a watchful eye on tech heavyweights such as Facebook and Google, and how they engage with their content providers and advertisers.

From its description, the Digital Markets Unit (DMU) sounded like it will attempt to do what the European Union is already doing on a pan-European basis with the Digital Services Act and Digital Markets Act.

Fast forward to May 2022, and the UK's Department for Digital, Culture, Media and Sport (DCMS) has finally set out the government's plan for what the DMU will do, and what penalties it will impose.

Figure 1: The Competition and Markets Authority (CMA) is specifically charged with keeping a watchful eye on tech heavyweights such as Facebook and Google.
(Source: Cyberstock/Alamy Stock Photo)

At the same time, concerns are being expressed that the government is dithering over voting through legislation that would give the watchdog the power to impose rules and penalize companies for breaking them.

As things stand, the DMU remains in non-statutory form within the CMA. It had been hoped that legislation needed to empower the watchdog would make it into the Queen's Speech on May 10, allowing legislation to be passed in the next legislative session, which begins this autumn.

However, the Financial Times, citing unidentified sources, reported that the government will announce a draft bill including powers for the DMU next week, but will stop short of including a final bill that could be made into law.

According to the newspaper, the new watchdog may not receive statutory powers until the following parliamentary session in 2023-24 at the earliest.

The DCMS did not respond to a request for comment as of this writing. In its press release on Thursday, it merely stated that the government will introduce legislation to put the DMU on a statutory footing "in due course."

Key ambitions

The government has at least set out what the DMU would do once the necessary powers are in place.

One of the key aims is to introduce new "fair-play" rules for tech giants that would make it easier for people to switch between Android and Apple iOS smartphone operating systems, or between social media accounts.

As we all know, it is often difficult or impossible to transfer contacts and other personal data between different systems.

The DCMS noted that smartphone users could get more choice over which search engines they have access to, more choice of social media platforms as new entrants enter the market, and more control over how their data is used by companies.

The DMU would also seek to ensure fair prices for content in disputes between "powerful platforms and content providers such as news publishers and advertisers."

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Furthermore, it would have the power to designate certain tech giants with "strategic market status," enforcing "new tailored codes of conduct" for how they should treat their users and other companies fairly.

Companies designated with strategic market status would have to report takeovers before they are completed, "so the CMA can conduct an initial assessment of the merger to determine whether further investigation is needed."

Tough sanctions are planned for those that do not comply: Tech companies would be fined up to 10% of their global turnover if they ignore the rules.

There would be additional penalties of 5% of daily global turnover for each day an offense continues. In addition, senior managers "will face civil penalties if their firms fail to engage properly with requests for information."

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— Anne Morris, contributing editor, special to Light Reading