London The UK is tightening regulation of large tech companies. The British government was expected to present a draft law on Tuesday that would give the national competition authority, the Competition and Markets Authority (CMA), significantly more powers. This was known in advance from government circles. London is apparently orienting itself towards similar projects in the EU.
In order to improve the clout of the competition guardians, the “digital unit” within the CMA should be given more power. This is to prevent “Big Tech” from dominating the market and thus restricting competition.
The government’s initiative stems from a report by economist Jason Furman. The former economic adviser to former US President Barack Obama took a close look at tech regulation in Great Britain in 2019 and called on the competition authority to pay more attention to the impact of market power on innovation and consumer protection.
The British competition authority then set up its own department in 2021 to specifically monitor the digital markets. Great Britain was thus one of the first countries to identify the growing market power of big tech as a problem for competition. However, the legal basis for additional state intervention has so far been lacking. The new law aims to change that.
The major American tech companies, such as Meta (Facebook), Amazon, Alphabet (Google), Microsoft and Apple, are particularly affected by the new rules.
Competition watchdogs are targeting Apple, Amazon, Google and Facebook
The CMA has already launched investigations into Apple’s App Store and Amazon’s marketplace in recent years. The market dominance of Google and Facebook is also in the sights of the British antitrust authorities.
Similar to the Federal Cartel Office, the British cartel authorities are also to exercise extended abuse control for those corporations in the tech industry that pose a systemic or strategic risk to competition. The thresholds in the UK are said to be £25 billion in global sales or £1 billion in UK revenue.
Last year, CMA boss Andrea Coscelli warned that Great Britain was at risk of having to adopt the guidelines from Brussels if it did not tighten its own tech regulations. The EU is pursuing a similar line with its Digital Markets Act (DMA).
Consumers should also be better protected
If large tech companies abuse their market power, companies in Great Britain face fines of up to ten percent of global sales and their top managers can be excluded from managerial positions. The lobby group Tech UK hopes that in the course of the parliamentary deliberations it will be able to expand the possibilities for companies to appeal against decisions by the competition watchdog.
“We want to ensure that the legislation is flexible, proportionate and fair for both large and new companies,” Paul Scully, Secretary of State for Technology, told Politico. Any remedial action would need to be implemented quickly as digital markets were evolving rapidly.
In addition to the rules of the game for Big Tech, consumer protection is also said to be tightened. The cartel watchdogs want to check fake product ratings and digital subscription models more closely.
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