More powers for tech regulator to boost competition proposed

Plans to empower a new competition regulator with the ability to stop tech giants abusing their dominant position have been included in the Queen’s Speech.

The Government’s draft Digital Markets, Competition and Consumer Bill would boost the Digital Markets Unit (DMU), giving it broader powers to enforce pro-competition rules on larger social media platforms and search engines such as Facebook and Google.

The DMU launched last April within the Competition and Markets Authority (CMA) and under the plans would be given statutory powers.

Under the proposed legislation, the DMU would have the power to enforce new tailored codes of conduct for firms dominating digital markets, outlining how they should treat their users and other companies fairly, with tough sanctions including large fines for those who breach the rules.

This could include imposing interventions to inject competition into the market, including obligations on tech firms to report new mergers and give consumers more choice and control over their data.

Elsewhere, the Bill also proposes boosting the powers of the CMA, giving the regulator the ability to decide for itself when consumer law has been broken and issuing fines for those breaches.

In addition, the Government said the Bill would update consumer law to clamp down on fake reviews, strengthen consumer rights and better protect the public from scams.

In response, Rocio Concha, director of policy and advocacy at consumer champion Which?, said the substance of the draft was promising, but a full Bill must be brought forward “urgently”.

“The Government’s own research estimates that consumer detriment costs £54 billion a year, so it’s good to see that the Government is moving forward with plans to hand the CMA stronger powers to clamp down on firms that behave poorly,” she said.

“The ability to impose significant fines on firms that break the rules should act as a deterrent for breaches of consumer law and prevent consumer rip-offs. In digital markets, it is vital that the Digital Markets Unit is given the appropriate powers to tackle the dominance of a handful of tech giants.

“However, it is disappointing that this Bill is only in draft form. The Government must urgently prioritise the progress of this draft Bill so as to bring forward a full Bill to enact these vital changes as soon as possible.”