Government sets out plans for how tech regulator will tackle dominance of major firms

The government has set out its vision for how the new digital markets regulation will boost competition and how small businesses will be protected from predatory practices of bigger firms.

The majority of UK companies now rely on powerful tech firms to ensure customers find their business online. These firms control key online gateways for millions of internet users and give preference to their own apps and browsers. They are also able to set their own prices for the online services they provide businesses without challenge, which can be passed on to consumers.

The impact of weakened competition is stark – the Competition and Markets Authority estimated that Google and Facebook made excess UK profits of £2.4 billion in 2018 alone – harming consumers through higher prices.

In response to its consultation issued last year, the government has set out its plans to give statutory powers to the Digital Markets Unit (DMU) to allow it to enforce pro-competition rules and rebalance the relationship tech giants have with consumers and businesses so they are better protected from unfair practices. The DMU is a new watchdog to make sure tech companies don’t abuse their market power.

The proposals aim to make it easier for people to switch between Apple iOS and Android phones or between social media accounts without losing their data and messages. Smartphone users could get more choice of 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 new regulations mean that tech firms could need to warn smaller firms about changes to their algorithms that drive traffic and revenues.

The measures will also make sure news publishers are able to monetise their online news content and be paid fairly for it, with the DMU given the power to step in to solve pricing disputes between news outlets and platforms. App developers would be able to sell their apps on fairer and more transparent terms.

More competition across digital markets will create incentives for internet companies to deliver better quality services. Lower fees for advertisers and businesses will stop costs from being passed on to consumers leading to lower prices for the goods they buy online.