Mark Zuckerberg, Facebook Chairman and Chief Executive Officer, arrives to testify during House Financial Services’ hearing on an investigation into Facebook and its impact on the financial services and housing sectors on Wednesday, October 23, 2019.
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LONDON – The UK announced on Friday that a new government entity will work to address lingering concerns about the concentration of power among a small number of tech giants.
The Ministry of Digital, Culture, Media and Sports plans to set up a Digital Markets Unit (DMU) to “enforce a new code to control the behavior of platforms that currently dominate the market, such as Google and Facebook”.
The code is designed to ensure that consumers, small businesses and news publishers are not put at a disadvantage by actions by technology giants, the government said.
Under the new code, some of the world’s largest technology companies may need to be more transparent about the services they provide and the use made of consumer data. They may also be forced to give consumers a choice of whether to receive personalized advertising, and not be able to impose restrictions on customers that make it difficult for them to use competing platforms.
The DMU, which will be part of the Competition and Market Authority (CMA), will start work in April 2021.
The government said the DMU could give the entity the power to suspend, block, and roll back decisions made by large tech companies. The DMU could also order them to take certain measures to achieve compliance with the code and impose financial penalties for violations, the government said.
Digital Secretary Oliver Dowden said in a statement: “I’m outrageously pro-tech and the services of digital platforms are transforming the economy positively – and bringing tremendous benefits to businesses, consumers and society.”
“However, there is a growing consensus in the UK and abroad that the concentration of power among a small number of tech companies is holding back the growth of the sector, reducing innovation and having a negative impact on the people and businesses that depend on them. It is on Time to look into it. ” that and usher in a new age of technological growth, “said Dowden.
In July, the CMA asked the government to give it more powers and establish the DMU. She said it was necessary to contain large digital advertising platforms. The regulator said it was concerned about how technology giants like Google and Facebook are using digital advertising to power their business models.
Although the CMA’s recommendations had a domestic focus, the watchdog said the issues it identified were “international in nature” and they were trying to “lead the world” as part of their digital strategy.
“Through our research into this market, we have found out how major online platforms like Google and Facebook work and how they are using digital advertising to drive their business models,” said Andrea Coscelli, managing director of the CMA, on July 1, is worrying – if the market power of these companies remains uncontrolled, people and companies will lose. “
Ronan Harris, Google’s Vice President for the United Kingdom and Ireland, said in a statement at the time, “Advertisers today choose from a variety of platforms that compete with one another to deliver the most effective and innovative ad formats and products.”
He added, “We support regulations that benefit people, businesses and society, and we will continue to work constructively with regulators and government in these important areas to help everyone get the most out of the Internet.”
Facebook previously announced that it would be working with UK government agencies “on rules to protect consumers and rebuild small businesses as the UK economy recovers” following the coronavirus pandemic.
“We’re facing significant competition from Google, Apple, Snap, Twitter, and Amazon, as well as newcomers like TikTok keeping us busy,” a company spokesman said in a statement on July 1, providing a strong scrutiny of how their data is collected and used is important. That’s why we’ve introduced industry-leading tools to help people control how their data is used to inform about the ads they see. “
– CNBC’s Ryan Browne contributed to this story.