You know your company has tremendous market power when an agency is created just to watch you.
That’s practically what has happened in the U.K. where the Competition and Markets Authority (CMA) has increased oversight of ad-driven digital platforms, namely Facebook and Google, by establishing a dedicated Digital Markets Unit (DMU). While it was created to enforce new laws to govern any platform that dominates their respective market, when the new unit starts operating in April 2021 Facebook and Google will get its full attention.
The CMA says the intention of the unit is to “give consumers more choice and control over their data, help small businesses thrive, and ensure news outlets are not forced out by their bigger rivals.” While acknowledging the “huge benefits” these platforms offer businesses and society, helping people stay in touch and share creative content, and helping companies advertise their services, the CMA noted the growing concern that the concentration of market power among so few companies is hurting growth in the tech sector, reducing innovation and “potentially” having negative effects on their individual and business customers.
The CMA said a new code and the DMU will help ensure that the platforms are not forcing unfair terms on businesses, specifically mentioning “news publishers” and the goal of “helping enhance the sustainability of high-quality online journalism and news publishing.”
The unit will have the power to suspend, block and reverse the companies’ decisions, order them to comply with the law, and fine them.
The devil will be in the details of what the new code will require, and questions remain about what specific conduct the DMU will target and what actions it will take. Will it require the companies to pay license fees to publishers for presenting previews of their content? Will the unit reduce the user data the companies may access, something that would threaten their ad revenue? Will Facebook and Google have to share data with competitors? We will learn more when the code is drafted and when the DMU begins work in April.
Once again a European nation has taken the lead on the global stage to control the downsides of technologies and platforms that have transformed how people communicate and get their news, and how companies reach them to promote their products. With the U.S. deadlocked on so many policy matters, change in the U.S. appears most likely to come as the result of litigation, such as the Department of Justice’s suit against Google, the FTC’s anticipated suit against Facebook, and private antitrust actions brought by companies and individuals.
Edited by Tom Hagy for MoginRubin LLP.
