Ask Rocio: How can we limit the ability of big tech companies to unfairly exploit consumers?

Dear Rocio,
How can ministers ensure disputes over the power of tech giants don’t end up in court?
Name and address provided

Rocio says: The Digital Markets Unit (DMU) may be the most important regulator you’ve never heard of. It is run by the Competition and Markets Authority (CMA), the country’s competition regulator, and its main task is to promote greater competition and innovation in digital markets dominated by a small group of large technology companies with significant power.

In doing so, it will help level the playing field between big tech companies like Google, Apple, Amazon and Meta/Facebook, as well as other companies that try to compete with them, and ensure that consumers and businesses that rely on these powerful tech companies , will depend on them. if they don’t, they will be exploited.

In practice, this means putting checks and balances on the dominance of big tech companies. A DMU can grant strategic market status to a digital company if it is particularly strong in a particular digital market and has a significant number of users in the UK, such as Google, Meta and Apple.

For example, we know that some tech companies automatically install their own software on their devices or platforms, but this makes it difficult for competing companies to gain a foothold. In this way, DMU can stop these big tech companies from gaining this unfair advantage and help consumers install the software that is best for them.

It’s no surprise that tech giants are lobbying for the DMU’s power to be weakened. Much of this effort has focused on the DMU’s appeals mechanism, with lawyers and lobbyists identifying a loophole that could undermine the new regulator’s ability to do its job effectively.

Related article

Chase

Concerns over the tech dominance of Amazon and Microsoft lead to an investigation by British regulators.

read more

Under current plans, companies will refer their complaints to the Competition Appeal Tribunal, a specialist body with extensive experience in resolving competition disputes.

It’s important to note that judicial review means that cases can only be heard if the regulator is deemed not to have followed the correct processes properly, and not just because tech companies claim the decision itself was wrong or want to delay result due to fictitious claims. This is clearly a level playing field.

The tech giants would prefer a different approach, where they could challenge the decisions through a “substantive appeal” and review the entire decision. Not only would this undermine the authority of the DMU, ​​an independent regulator with extensive experience in these complex digital markets, whose decisions could then be overturned by higher powers, but any appeal could take years.

Lengthy legal processes can be incredibly expensive—even if the changes are small for some of the world’s best-funded tech companies—and as long as the momentum continues, tech companies can continue to market their products or services to able-bodied consumers. Competitive advantage. .

This would bring closer the Goliath status that some companies enjoy and exploit on the world stage.

So far the government has resisted loud calls for such an approach. However, there are now rumors that the Prime Minister is considering a compromise that would give powerful tech companies a new, legally untested way to challenge and delay decisions.

Judicial review, which is an important check on DMU decisions, must be maintained so that the regulator can focus on its main goal: promoting competition in digital markets.

What good is a regulator that continually devotes significant resources to litigation when it could instead have a direct impact on ensuring fair competition for companies with the best products and services?

The more choices you or I have, the more innovation will happen because the tech giants’ rivals know they have a real chance of keeping up. More choice could also lead to lower prices – something millions of us increasingly fear amid the worst cost of living crisis in decades.

The UK has so far demonstrated that it is more than willing to go it alone, using a regulatory regime that is different from that in Europe and which offers the opportunity to become a true global leader in ensuring the UK’s digital markets continue to develop. thrive and benefit consumers. .

This could signal to emerging tech companies that the country is open for business as there is a real chance to compete with big tech companies. It is not surprising that they began to resist change. Ministers need to drown out the noise and focus on the larger goal.

Rocio Concha is Director of Policy and Advocacy at Which.co.uk. If you would like your request to be listed on this page, please send an email to [email protected]