The UK’s Competition and Markets Authority has called for a new regime to regulate the online economy, after its digital advertising study found the market power of Google and Facebook is causing substantial harm to “society as a whole”.
The enforcer today asked the UK government to create a digital markets unit and empower it to break up big tech companies and enforce a code of conduct among online platforms to resolve competition concerns in that sector. It did not specify if the new unit should function within an existing body or be created as a new standalone regulator.
The EU enforcer launched a public consultation on its proposed market investigations tool in May. EU competition commissioner Margrethe Vestager has cited the CMA’s similar power as an efficient way of tackling competition concerns in fast-moving markets.
Euclid Law partner Becket McGrath, who advised a publisher during the UK enforcer’s market study, said it is understandable why the CMA asked the government to introduce a new regulatory regime. Conduct that is not good for competition does not necessarily infringe antitrust law, but it could be addressed through careful, targeted regulation, he said.
Combating concerns related to the market power of big tech requires difficult public policy trade-offs that extend well beyond competition law, McGrath added.
“With all these moving pieces, there has to come a point when the CMA, as an independent and unelected agency, hands over to the government,” he said.
McGrath also questioned if the UK could effectively implement some of the CMA’s proposals without aligning with reforms emerging elsewhere, particularly in the EU. “Solutions need to be closely coordinated – it’s not good for businesses if there is too much divergence,” he warned.
To read the full article on GCR website, click here.