UK to establish new watchdog to regulate tech giants after Brexit, amid calls to curb their power

UK to establish new watchdog to regulate tech giants after Brexit, amid calls to curb their power
Legal

The UK will create a new regulator next year, tasked specifically with monitoring and regulating large tech companies following the UK’s withdrawal from the European Union, the Financial Times reported Wednesday. The watchdog will wield new powers to enforce a code of conduct for tech giants. 

The move was recommended in a review of large tech sector companies, led by former US president Barack Obama’s chief economic adviser, Jason Furman. It also comes as governments throughout Europe and the rest of the world are scrutinizing tech giants and implementing new efforts to curb their power, promote competition, and protect consumers. 

Antitrust experts say the move is necessary for Britain post-Brexit, since the European Commission has been dealing with its largest antitrust cases. 

The UK’s Competition and Markets Authority (CMA) also said in an interim report published Wednesday that the UK should implement stricter rules for tech giants when it comes to user control of personal data and the dominance of a handful of companies over the digital advertising market. Google accounts for about 90 percent of search advertising sales in the UK, while Facebook earns about half of display advertising revenue. 

“We are concerned that they are both now so large and have such extensive access to data that potential rivals can no longer compete on equal terms,” the CMA said in the report

“Weak competition in digital advertising can increase the prices of goods and services across the economy and undermine the ability of newspapers and others to produce valuable content, to the detriment of broader society.”

They also warned that while “big is not necessarily bad” the anti-competitive atmosphere could hold back “the next great new idea from a potential rival.”

They noted that Google has taken actions to maintain its control of the market, including paying £1 billion last year to ensure its role as the default search engine on mobile devices. Most of that payment went to Apple, another tech giant. 

The report also criticized tech companies’ handling of user data, saying the release of “considerable amounts of personal data” is presented as a take-it-or-leave-it condition for using a service like Facebook. 

The Department for Business, Energy and Industrial Strategy (BEIS) has been meeting with competition lawyers and experts in recent months to determine the extent of the new agency’s powers and responsibilities.

Philip Marsden, a member of the Furman review, said the new agency should be empowered to issue fines that exceed the cap on those from the CMA. 

Photo by Outreach Pete [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)]

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