UK to establish big tech regulator

By on 29/12/2019
Two reviews have concluded that big tech companies such as Facebook and Google should have to comply with a code of conduct to protect citizens’ data.

The UK government is to create a regulator next year that would be responsible for policing big tech companies such as Facebook and Google, post-Brexit.

According to the Financial Times (FT), which broke the news having spoken to “several people who were involved in the process”, the new watchdog would be given powers to implement a range of new rules, including an enforceable code of conduct for the biggest tech companies and greater data protections for consumers.

Individuals within the Department of Business, Energy and Industrial Strategy have been meeting with competition lawyers and academics over the past few months to establish the scope of a new regulator, according to the FT.

The move follows a government commissioned review led by Jason Furman, chief economic adviser to former US president Barack Obama. The report, published in March, explored the tech sector and made recommendations on changes to competition policy “to help unlock the opportunities of the digital economy” whilst producing better outcomes for consumers and promoting “data openness”. It proposed a dedicated regulator be established.

“It’s quite rare that one makes a set of quite radical policy proposals and within 12 months the government is actually implementing them,” Diane Coyle, an economist who was part of the Furman review, told the FT. “There is an emerging international consensus around the scope of new regulation. A reckoning is coming for the biggest digital platforms.”

Philip Marsden, a professor of law and economics at the College of Europe, Bruges, who was also on the Furman review panel, told the FT that, while he did not envisage the new regulator being “a 1,000-person quango”, he believed the unit should be “funded well and have a lot of digital and competition expertise”.

He added that the watchdog should have the power to hand out fines for non-compliance.   

In control of your data?

News of the move to establish a new regulator came in the same week that a report by the UK’s Competition and Markets Authority (CMA) called for government to implement tougher rules for online giants amid concerns that their dominance in digital advertising could be harming competition and that people using the platforms may not be in control of their data.

The CMA’s interim market study, published on 18 December, looked at how big tech firms collect and use people’s data; how they monetise that data; and what use of such data means for rival companies who want to compete, and for the people and businesses using big tech firms’ services.

“We are concerned that [Google and Facebook] are both now so large and have such extensive access to data that potential rivals can no longer compete on equal terms,” the CMA said.

It found that for the past decade, Google has controlled more than 90% of the UK’s £6bn (US$7.8) search advertising market, while Facebook accounts for almost half of the £5bn (US$6.5bn) internet display advertising market.

“Both for privacy and competition reasons, it is essential that people feel in control of their data. At the moment, the CMA is concerned that this is not always the case,” the competition authority said.

It said, for example, that Facebook forces consumers to “share considerable amounts of personal data as a condition for using the service”, and that privacy settings are difficult to access.  

“While there are examples of better practice, with search engines such as Google giving consumers better control, overall, we have found that consumer engagement with privacy settings and controls is low and, that, as a result, most consumers follow the default settings set by platforms – which may result in them giving up more data than they would like,” the CMA said.  

It identified steps that could open up competition and said it believed there was a “strong argument for the development of a new regulatory regime”, explicitly backing the Furman review’s conclusion.

The watchdog is considering a “a range of potential interventions” including an enforceable code of conduct and rules to improve transparency and give users greater control over data.

CMA chief executive Andrea Coscelli said: “At the end of the study, we’ll present our findings to the government as they decide whether and how to regulate what is an increasingly central sector in all our lives.”

The government would consider the CMA’s recommendations and, should it accept them, they could be adopted under the remit of the new regulator. However, the CMA has said that it “stands ready to act directly through any or all of its powers if, ultimately, these issues are not addressed in other ways, whether domestically or internationally”.

The CMA’s final report is expected in 2020.

About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

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