UK Moves To Regulate Big Tech With Proposed New Watchdog Group

The U.K. government is moving to regulate Big Tech by establishing a new watchdog group aimed at encouraging competition within the digital sector.

In recommendations issued Tuesday (Dec. 8) by the U.K.’s Competition and Markets Authority (CMA), the proposed regulatory regime is intended “harness the full potential of digital markets, driving greater competition and innovation,” according to the CMA’s statement.

If implemented, the new regulatory regime will regulate large tech firms that the government has classified as having “strategic market status,” or SMS, meaning that authorities consider them to have substantial and entrenched market power.

The recommendations include the establishment of a new watchdog group, the Digital Markets Unit (DMU), which will sit within the CMA. The DMU will be part of an enhanced regulatory framework that will also oversee regulations aimed at curbing harmful online content and protecting personal data. The agencies will coordinate through the Digital Regulation Forum. Other forum members include the Office of Communications, or Ofcom; the Information Commissioner’s Office (ICO); and the Financial Conduct Authority (FCA).

The proposed regulations include having SMS entities abide by a new legally binding code of conduct, tailored to each firm; pro-competitive interventions, such as the imposition of interoperability requirements and the enabling of consumers to better control their data; and enhanced scrutiny for proposed mergers.

The guidance also proposed a fine of up to 10 percent go global revenue for companies that breach the code, noting that it “reflects the size of the firms likely to be designated with SMS.”

The CMA said the U.K. government will consult on the new proposals in early 2021 and then move to establish the DMU when parliamentary time allows.

Britain has been contemplating enhanced regulation of the digital sector for some time. Earlier this week, the Financial Times reported that British regulators were close to outlining new rules for Big Tech.

On Oct. 9, Britain’s top antitrust regulator proposed that the country contemplate creating a new regulatory unit whose approval would be required before any dominant technology company could make an acquisition in the country.

Meanwhile, reports have been circulating since October that European Union regulators are also hard at work crafting a “hit list” of roughly 20 companies — Big Tech marquee names among them — that will face tougher rules over market competition and other operational activities.