Legislation gives digital watchdog powers to rein in Big Tech

New legislation gives digital watchdog powers to rein in the dominance of Big Tech and protect Brits from online scams

• Digital Markets Unit will target online giants such as Google and Facebook 
• More control will be placed on digital advertising which risks online journalism

A new digital watchdog aiming to rein in the dominance of Big Tech will finally be empowered under new legislation introduced today.

The Digital Markets Unit (DMU) will target the very biggest online giants such as Google and Facebook – with the power to dish out multi-million-pound fines.

The Government has confirmed this will include reining in their grip over digital advertising, which currently poses an existential risk to high-quality journalism, by ensuring they pay a fair price to news publishers for content.

The legislation, known as the Digital Markets, Competition and Consumers bill, is also set to offer Britons more protection from online scams and rip-offs that cost them £1.6billion a year.

This includes cracking down on the scourge of fake reviews and subscription traps, while also boosting competition in digital markets.

The legislation will offer Britons more protection from online scams and rip-offs. File image

Ministers said the new measures would come into effect as soon as possible following parliamentary approval.

The DMU, which operates within the Competition and Markets authority, will target tech firms who are deemed to have entrenched and significant market power.

This will only affect a small number of companies, who, according to the Financial Times, will have to generate at least £25bn in global turnover or £1billion in the UK.

If a firm is deemed to have an unfair advantage in key services, ministers said the DMU would step in to set ‘tailored rules on how they behave and operate’.

Any found to have breached the rules could face fines of up to ten per cent of global turnover. Executives will also be liable to fines if they fail to comply with information requests.

The watchdog will also tackle competition issues by carrying out targeted interventions, such as opening up paths for start-ups or smaller firms that had struggled to grow in these markets.

The Bill will also strengthen the rights of consumers, with new rules ensuring people can exit subscription in ‘a straightforward, cost-effective, and timely way’.

Businesses will also be required to issue a reminder when a free trial or introductory offer is coming to an end.

It will further tackle fake reviews by banning anyone writing or commissioning them. This will also include advertising consumer reviews without taking reasonable steps to check they are genuine.

There will also be a crackdown on the scourge of fake reviews and subscription traps. File image

The legislation will also provide the CMA with stronger tools to investigate competition problems – such as firms colluding to bump-up prices – and take ‘faster, more effective action’.

The CMA beefed up powers will include the ability to enforce consumer law without having to go through a lengthy court process.

Business and Trade Minister Kevin Hollinrake said: ‘From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap – consumers deserve better.

‘The new laws we’re delivering today will empower the CMA to directly enforce consumer law, strengthen competition in digital markets and ensure that people across the country keep hold of their hard-earned cash.’

Consumer watchdog Which? said empowering the DMU was a ‘major step forward’.

Rocio Concha, director of policy and advocacy, said: ‘It needs the right powers to loosen the vice-like grip of a handful of tech giants that will foster innovation and give consumers more choice and lower prices.’

Sarah Cardell, Chief Executive of the CMA, said: ‘The new powers in this bill help the CMA take swift, decisive action to tackle rip offs, protecting consumers whether they are shopping online or on the high street.

‘The new fining powers will provide an important deterrent to businesses seeking to take advantage of people while also ensuring fair dealing businesses can thrive.

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