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UK Government Sets Out Plans to Tackle Big Tech’s Power

UK Government Sets Out Plans to Tackle Big Tech’s Power
Source: Financial Times

The government announced that large digital giants like Google and Facebook would have to follow new competition laws in the UK or face large fines.

The new Digital Markets Unit (DMU) will have the authority to prosecute companies that engage in “predatory behavior.”

If corporations do not comply, the regulator will have the authority to penalise them up to 10% of their global revenue.

The laws aim to offer customers greater control over their data while also increasing competition among tech corporations.

The media contacted a number of major tech companies, including Apple, Meta, and Google, but received no answer.

According to the Department for Digital, Culture, Media and Sport (DCMS), in addition to huge fines, IT companies might face further penalties of 5% of daily worldwide turnover for each day the offense persists.

This might amount to tens of billions of dollars for firms like Apple.

“If their enterprises fail to participate effectively with demands for information, senior management will risk civil fines,” the government stated.

However, the precise date of implementation is unknown, since the administration has said that the appropriate legislation would be submitted “in due course.”

The government wants to “balance the playing field” in the IT business, where a few American corporations have been accused of abusing their market dominance, according to digital minister Chris Philp.

“A few tech behemoths are drowning out competition and suffocating innovation,” he remarked.

Along with holding Big Internet accountable, the DMU will work to give individuals greater control over how their data is used by tech companies, such as through targeted customised ads.

It will also enable switching between phone operating systems like Apple iOS or Android and social media accounts easier without losing data and messages.

Closed systems have been dubbed “walled gardens” by critics because they bind customers to a single brand.

The regulator will also look into Google’s search engine, which is presently the default search engine for Apple gadgets, according to the government.

It further said that news publishers should be compensated appropriately for their work, and that the regulator should have the authority to handle any disputes.

Meta, Google, and news publishers have been at odds, prompting this step. While many local and national news organizations struggle to stay afloat, Big Tech corporations are raking in record revenues and increasing advertising income from the stories they generate, according to the argument.

Meta and Google say that the arrangement is mutually beneficial, directing traffic to news organizations.

Last year, the issue worsened when a proposed rule in Australia aimed at “leveling the playing field” resulted in Facebook temporarily barring Australian news organizations pending a resolution.

The UK government claims that the new laws will provide national and regional newspapers more “bargaining power.”

A measure to award companies like Meta and Apple “strategic market status” is also in the works, which will require them to submit takeovers before they close to the Competition Markets Authority (CMA) for possible inquiry.

Big Tech has long been chastised for acquiring competitors as part of a “copy, acquire, kill” strategy.

The complaint is that little businesses are taken up before they can become too large, endangering the dominant position of major corporations.

Separately, it had been speculated that the DMU would not be given a legal standing, and so would lack teeth, but the government has said that legislation to place the regulator on a statutory footing will be introduced in “due time.”

For the benefit of UK consumers and companies, Which? stated it was “critical that the Digital Markets Unit is adequately equipped.”