UK’s tech regulator Digital Markets Unit to be given powers to levy huge fines on tech giants, but smaller businesses express ‘frustration’ with timing
More details on the government’s planned tech watchdog, the Digital Markets Unit (DMU), are expected to emerge this week with the Queen’s speech on Tuesday, as digital businesses expressed frustration with delays in bringing the unit into being.
The government said last week that the DMU, which was established last year and operates within the Competition and Markets Authority (CMA), is to be given a legal footing that will allow it to levy large fines on tech giants.
But the Department for Digital, Culture, Media and Sport said only that ministers would introduce legislation to underpin the DMU’s powers in “due course” amidst speculation that only a draft bill would be mentioned in the Queen’s speech.
The DMU is intended to protect small businesses from predatory practices by large tech firms while giving consumers greater control over how their data is used, the government said.
It is to enforce new codes of conduct for the biggest tech companies operating in the UK, making it easier for users to choose which search engines they use and for consumers to opt out of personalised adverts.
“The customer is always right, but sometimes they don’t get a choice,” said consumer minister Paul Scully.
“We’ll stop companies from using their power to harm customers, whether they’re limiting shoppers’ choices to certain software on their devices or making it hard for people to decide how their data is used.”
Tech companies are to be required to inform businesses of significant changes that would affect them, such as algorithm adjustments that affect which sites receive traffic.
The unit is to be given powers to resolve disputes between tech platforms and news providers in order to ensure providers are paid fairly for their content.
App developers are to be able to market their products on fairer and more transparent terms over providers’ app stores, the government said.
The DMU is to be given the power to impose fines of up to 10 percent of a company’s global turnover – which could reach into the tens of billions for the biggest firms – or 5 percent of daily global turnover for each day that an offence continues.
In addition, senior managers at tech companies are to face civil penalties if their firms fail to comply with Ofcom investigations.
“The CMA welcomes these proposals and we’re pleased that the government has taken forward a number of our recommendations that will allow the DMU to oversee an effective and robust digital markets regime in the UK,” said CMA chief executive Andrea Coscelli.
Simon Elliott, senior director at digital content platform provider Acquia, said the plans were “encouraging”, but he noted there is “frustration” over the fact that there are “still no concrete plans” as to when the rules will be introduced.
“The business practices of these tech giants need to be subjected to greater scrutiny so that we can steer away from opaque data usage, which has eroded consumer trust and has put fledgling businesses at an unfair disadvantage against dominant market incumbents,” Elliott said.