‘Pro-competition’ rules for Big Tech succeed in UK pre-election dispute

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The UK will soon get its own rulebook for Big Tech after the House of Lords agreed on Thursday afternoon to pass the Digital Markets, Competition and Consumer Bill (DMCC) – clearing the last hurdle for the bill to become law in the limited parliamentary time remaining for the government.

The pro-competition reform, which has been in the works for years, increases the powers available to the UK’s competition watchdog, the Competition and Markets Authority (CMA). This improvement allays the concerns of tech giants like Apple and Google. As they have become more powerful, the digital market they dominate has perhaps become worthless to competitors and consumers.

Fines in the DMCC could reach 10% of global annual turnover, so the upcoming legislation has real substance. The CMA will also be able to impose fines directly for breaches of consumer law – cases will not have to go through the courts. Therefore, its implementation should be expedited.

Originally proposed by the government in 2020 – following a 2019 Competition Markets Review headed by Professor Jason Furman, former US president Barack Obama’s chief economic adviser – the plan was kicked into the long grass by former prime minister Boris Johnson. Last year, it was revived by current 10 Downing Street incumbent Rishi Sunak, who insisted on some consumer protection additions.

However, the hugely unpopular current prime minister announced a surprise general election in the summer earlier this week – putting the bill’s passage in jeopardy. 30 May is the date when the UK parliament is dissolved.

As it turns out, though – in a final, final twist – the DMCC has pulled it off with a “wash-up.” This refers to the final days and hours of parliamentary time, before legislators leave their seats so election campaigning can begin.

On Thursday afternoon, Politico Pro reported that the bill had passed the Lords, as peers rushed to consider the remaining amendments. It added that the bill would receive royal assent on Friday – marking the final step on its journey to the statute books.

One element that contributed to the rapid passage of this last-ditch effort at DMCC is the fact that the legislative plan to rein in the market power of Big Tech has broad support from all political parties. While this legislation was proposed, drafted and introduced under several Conservative governments, the opposition Labor Party threw its support behind this bill.

During the debate in the House of Lords this afternoon, Baroness Jones of Whitchurch, from the Labour Party, said: “We think overall this is a good bill. And it takes the first steps to regulate the behaviour of big tech companies, which is a long-overdue step. And it provides some protection to challenger firms and safeguards consumer rights.”

Speaking on behalf of the Government, Lord Offord of Garwell welcomed the passing of the Bill: “This Bill will be vital in driving growth, innovation and productivity. And protecting consumers.”

“I’m honored to see it on its final stages today,” he said. “I hope it becomes an Act of Parliament. The Bill has benefited from broad support from both Houses, as well as detailed scrutiny from a number of noble Lords and Members. I want to thank the honorable Lords for supporting our position and wishing the Bill well.

When contacted for comment on the bill’s passage, a CMA spokesperson told TechCrunch: “The new powers in this bill increase the CMA’s ability to take action against firms that breach consumer law and help level the playing field between online businesses, ensuring that the most powerful digital firms act responsibly towards competitors and their customers.”

We understand that the CMA will shortly set out the next steps for the Digital Markets Unit. This existing unit is the division that has been tasked with formulating and implementing special rules for a handful of tech giants that are expected to come under the pro-competition rulebook.

While the DMCC has been compared to the EU’s flagship competition reform, the Digital Markets Act – which has been in place since February – there is one major difference. The EU approach imposes a set of fixed rules on “gatekeepers”, while UK law would give the country’s competition enforcer more leeway to design measures suited to individual platforms.

That element may be particularly important in light of rapid developments in platform technology, such as the rise of generative AI – an area the CMA is already focusing carefully on.

The regulator gave a sample of its plans for rolling out the DMCC in January. At the time, it said it expected to conduct 3-4 investigations of tech giants in the first year to determine whether they meet the law’s standard – a so-called “strategic market position” – for imposing special abuse control arrangements.

Although no names have been confirmed, Apple and Google have long been in the CMA’s crosshairs over their mobile monopolies – so it seems certain the pair will be high on its list for assessment.

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