UK tackles big tech with digital markets bill

The UK government on Tuesday introduced its digital markets bill, a move designed to improve competition and protect consumers.

Mary Lennighan

April 25, 2023

3 Min Read
UK houses of parliament

The UK government on Tuesday introduced its digital markets bill, a move designed to improve competition and protect consumers.

Essentially, the bill constitutes Westminster’s latest attempt to crack down on the big technology companies – Google, Amazon, Facebook and so forth – and give a leg up to smaller potential competitors. As well as helping to address market dominance, it seeks to tackle fraud and subscription traps.

It has been a long time coming, but is now good to go, following parliamentary approval, of course, and a couple of other hoops to jump through.

Amongst other things, the bill will formally confer actual powers on the Digital Markets Unit (DMU), a body within the Competition and Markets Authority (CMA) that the government launched two years ago.

The DMU’s new powers will enable it “to tackle the excessive dominance that a small number of tech companies have held over consumers and businesses in the UK,” the government said, in a statement. It claims that this market dominance has stifled innovation and growth, preventing smaller players from reaching their target market.

It doesn’t name names, but we all know who it is talking about.

What the government actually says is that if a firm is deemed to have “strategic market status in key digital services” then the DMU can step in and make rules governing how it behaves and operates.

“For example, the biggest tech firms may be instructed by the DMU to provide more choice and transparency to their customers. If firms don’t abide by these rules, the DMU will have the power to fine them up to 10% of their global turnover,” the announcement states.

It’s difficult to imagine the UK government squeezing billions of dollars out of Google for being too big, but if them’s the rules…

The state is also talking about “targeted interventions” to address the root causes of competition issues in digital markets, which could see big firms told to give customers more flexibility when buying products online and to remove the types of technical barrier that block users from using products across different devices and systems.

At a broader level, the bill will also enable the government to ban the use of fake reviews, or at least put a greater onus on companies to ensure the reviews they publish are genuine, and will make it easier for consumers to exit subscriptions, amongst other things requiring businesses to send reminders when a free trial or introductory offer is coming to an end.

The CMA itself will have stronger tools to investigate competition issues, including collusion between companies that bumps up prices, for example, and it will be able to enforce consumer law directly, rather than going through the courts, which can take time.

“The new powers in this bill help the CMA take swift, decisive action to tackle rip offs, protecting consumers whether they are shopping online or on the high street,” said CMA chief executive Sarah Cardell. “The new fining powers will provide an important deterrent to businesses seeking to take advantage of people while also ensuring fair dealing businesses can thrive.”

Paul Scully, Minister for Tech and the Digital Economy, talked up the government’s “pro-growth and pro-innovation” agenda in the technology sector, as you would expect. More tellingly though, the government shared quotes of support from certain consumer advocacy big guns.

“Whether it’s fake reviews by dishonest businesses or people getting trapped in unwanted and costly subscriptions, our consumer protections are overdue an upgrade,” said Rocio Concha, Which? Director of Policy and Advocacy, noting that her company has been campaigning for stronger powers for the CMA.

“The empowerment of the CMA’s Digital Markets Unit will also be a major step forward. It needs the right powers to loosen the vice-like grip of a handful of tech giants that will foster innovation and give consumers more choice and lower prices,” Concha said.

Strong words. Let’s see how it all pans out in practice.

Get the latest news straight to your inbox. Register for the newsletter here.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

Get the latest news straight to your inbox.
Register for the newsletter here.

You May Also Like