Digital Markets Unit launches to fight tech giants’ market dominance

The Digital Markets Unit (DMU) has been launched in the UK today aimed at tackling the “abuse of dominant market positions by big tech”.

Amazon, Facebook and Google are from today “on notice”, according to the UK’s secretary of state for digital, culture and media Oliver Dowden, who said the new body will take action to address some of the tech giants’ “potential abuses of their market position”.

The body was set up by the Competition and Markets Authority (CMA) after it was decided that Google had a significant market influence in search and in search advertising while Facebook dictated a similar situation in social media and display advertising.

“The Digital Markets Unit has launched and I’ve asked it to begin by looking at the relationships between platforms and content providers, and platforms and digital advertisers,” Dowden added.

However, the watchdog is unlikely to be able to enforce any new regulations to curtail big tech until next year after it has devised codes of conduct, which will need to be approved by parliament.

A combination of the pandemic, Brexit and the ‘online harms bill’ have caused a lengthy backlog of laws to be considered by parliament, meaning the DMU could be left toothless for some time.

READ MORE: Ebay’s $9.2bn sale of Gumtree under threat as CMA steps in

The watchdog’s role will be to introduce regulations for Silicon Valley’s big tech brands to level the playing field for smaller businesses and give people more control over their data.

Business secretary Alok Sharma added: “The dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers.”

The government has said the DMU could be given the powers to reverse decisions made by big tech as well as ordering them to comply with codes of conduct.

Parliament is becoming increasingly wary of the amount of influence big corporations are having on international markets, with the UK’s Chancellor Rishi Sunak vowing to implement an “Amazon Tax” on the e-commerce giant.

Geradin Partners’s competition partner Damien Geradin said: “The government has committed to regulating digital platforms and decided that the DMU go ahead.

“But for the DMU to start adopting codes of conduct and imposing interventions (on tech companies) they will need new powers.”

Dowden has said that the CMA will spend time researching how big tech regulations will work in practise until the DMU has the power to implement regulations.

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