Tech giants could pay 10% of turnover under draft UK law
Competition? We've heard of it
Nearly two years after its creation, the UK's Digital Markets Unit (DMU) – meant to bring Big Tech to heel in much the same way as the EU's DMA – might finally get some teeth, with a draft law allowing it to fine anti-competitive behemoths up to 10 percent of their turnover for strangling rivals and eating all the pie.
The Digital Markets, Competition and Consumers (DMCC) bill, if enacted, means the subsidiary of the Competition and Markets Authority (CMA) could take aim at "firms with substantial and entrenched market power, in at least one digital activity" with a strategic position.
The CMA at no point mentioned any company by name, but these will be the companies widely known to have market dominance in the UK, Europe, the US, and most of the rest of the world, with the exception of China, Russia, North Korea, and a few other outliers. These shadowy characters (*cough* Google, Amazon, Apple, and Microsoft *cough*) will be designated with Strategic Market Status (amusingly acronymned SMS) by the DMU, making them "subject to the new regime."
If the idea of companies suffering from SMS sounds familiar, it's because the EU's DMA has a very similar designation for Big Tech companies, where certain platforms, according to market power and revenue, are known as "Gatekeepers" – also making them subject to new obligations in terms of fairness. Just as well the country went through Brexit to really define its own legislation in opposition to what everybody else is doing. (We're kidding a bit; this is still way better than a situation where tech giants manage to lobby the government to the point that no such laws are put into place.)
The competition body adds that a "threshold will apply meaning that only firms with a global turnover above £25bn, or UK turnover above £1bn, will be in scope."
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Alex Haffner, a partner and competition lawyer at law firm Fladgate, told The Reg: "The CMA itself has been very much in 'preparation mode' hiring in people from big tech to bolster its resources within a newly created 'digital markets' unit and getting its teeth into several ongoing investigations of Apple, Amazon and Google amongst others.
"If it becomes law, however, the bill will up the ante significantly by requiring big tech to actively demonstrate to the CMA how it is complying with competition law principles as opposed to requiring the competition regulator to bring its own challenges to those companies' behaviors."
Haffner added: "To that extent, it marks a major shift in the way in which the UK government makes good on its promise to create the conditions for tech companies of all shapes and sizes to innovate and grow."
Sarah Cardell, chief exec of the CMA, said in a statement: "We welcome this flagship bill which provides the CMA with new powers to do even more to protect people, businesses and support the economy."
She added: "Digital markets offer huge benefits, but only if competition enables businesses of all shapes and sizes the opportunity to succeed. This bill is a legal framework fit for the digital age. It will establish a tailored, evidenced-based and proportionate approach to regulating the largest and most powerful digital firms to ensure effective competition that benefits everyone."
The UK's business and tech departments said in a joint statement that the law, if enacted, would mean companies could be instructed by the DMU to open up their data to rival search engines, or to increase the transparency of how their app store or marketplace review systems work.
Not only will the DMU have the power to fine rule breakers up to 10 percent of their global turnover, they will also be able to make senior managers "personally responsible for ensuring their company complies with the DMU's requests."
So there's a moderate amount of popcorn to be had when that happens. But we can't have everything. That "senior manager" rule still wouldn't bring Mark Zuckerberg to London should the unit want to chat to the Meta chief about anything. ®