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Regulation set to challenge the ‘dominance’ of tech giants Google, Amazon and Facebook

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The issue of encryption has become a pressing conundrum for both tech companies and lawmakers involved in the UK's Online Safety Bill.
The issue of encryption has become a pressing conundrum for both tech companies and lawmakers involved in the UK's Online Safety Bill. (Getty Images)

Plans to toughen up UK regulation of some of the world’s largest tech companies will go before MPs for the first time, with the competition watchdog’s dedicated digital unit set to be given sharper teeth.

New laws to regulate big tech firms, such as Google, Amazon and Meta, have been long awaited, with MPs last autumn urging the government to speed up progress on reforms.

Now a draft of the Digital Markets, Competition and Consumers (DMCC) Bill proposes giving statutory status to a key digital unit within the UK’s top competition watchdog, the bill will aim to stamp out unfair practices and promote competition.

The digital markets unit (DMU) within the Competition and Markets Authority (CMA) will get regulatory powers to target big tech firms and tackle “excessive dominance” of the sector.

Government says this has “stifled innovation and growth across the economy” and that its plans will help start ups and smaller firms gain access to markets and consumers. 

Powers to administer fines of up to 10 per cent of big tech firms global turnover will also be given to the DMU if companies don’t follow the rules.

Protecting consumers online by cracking down on rip offs, unfair subscription ‘traps’ and fake reviews will also come under the legislation, which will be introduced by minister Kevin Hollinrake today.

“Proposals to give the CMA stronger enforcement powers when firms break consumer law – including the ability to directly impose fines for the first time – are crucial to ensure we can continue cracking down on rip-offs and underhand deals, helping to deter firms from taking advantage of people,” the regulator said. 

The imminent publication of the bill also raises questions over how big tech could appeal against decisions.

Appeals are likely to have to follow the standard process of querying a decision made by the CMA through judicial review, the Financial Times reported, a move which is likely to raise concerns for corporations. 

“One way or another, I’m pretty sure there will be an opportunity for big tech and other parties to intervene in that decision making,” said Mark Lewis, a senior consultant at Macfarlanes law firm. 

“It’s going to be a question not only of the detail in the legislation and the code of conduct, but we also have to ask whether a new regulator will have sufficient resources to take on big tech,” he added.

Tech regulation: Could it bring giants to heel?

Government previously pledged to crack down on big tech but action has been delayed – with this new bill following a string of legislation enacted in the EU last year. 

“The new consumer proposals propel the CMA from having no right to fine into having the most aggressive fining powers of any consumer regulator in any country I know,” says Clive Gringras, Head of the Consumer Protection Defence Group at law firm CMS.

Neil Ross, associate director for policy at the trade group, TechUK, said proposals to put the DMU on statutory footing “stand a better chance of taking targeted action to boost competition in digital markets than approaches in the EU and the US.”

Ross added: “Additionally, the Bill must include robust checks and balances, including supporting an appeals process that enables quick resolutions to disputes while allowing the full facts of a case to taken into account for the most significant regulatory decisions.”