According to Alok Sharma, controlling various major firms harms innovation and restricts customer options.
The business secretary, Alok Sharma, recognized the ‘substantial contribution’ that digital platforms provide to the economy and everyday life.
The government said a new tech regulator will work at decreasing the power of Facebook, Google, and other tech platforms to facilitate an equal playing arena for smaller rivals and a just market for customers.
These plans stipulate that the CMA (Competition and Markets Authority) will attain a dedicated Digital Markets Unit. It has the authority to run and implement a new code of practice on technology firms, which will lay out the limits of satisfactory conduct.
The only firms that the code will affect are the ones considered to have ‘strategic market status.’ However, the meaning of this has not yet been ascertained, nor the limitations that will be implemented.
Alok Shara, the business secretary stated, ‘Digital platforms such as Facebook and Google contribute generously to our economy, and have a significant impact on our everyday lives. For instance, enabling us to communicate with our loved ones, share interesting content, or get the latest news.
‘However, when only a fraction of major tech firms become dominant, it reduces innovation, costs of advertising rise and consumers have fewer options and control.’
‘Our latest, pro-competition digital markets system will make sure that consumers have options, and it means that smaller companies are not excluded.’
The country’s strategies are a result of a CMA investigation that started as a casual examination of the digital advertising sector. However, afterward, it advanced to include Facebook and Google’s market control.
The code aims to act as an intermediary between news publishers and platforms, for example, to try and make sure they can generate income from their content. It might also be a requirement for platforms, to offer consumers an option on whether to get customized advertising or compel them to put in more effort to enhance their operations with competitor platforms.
CMA’s Chief Executive, Andrea Coscelli, was happy about this step. ‘The only way we can deal with the market power of tech giants such as Google and Facebook is through a new pro-competition regulatory system and ensure the protection of businesses and consumers.’
‘Before long, we shall offer suggestions to the government about how this latest system should operate, as requested at the beginning of this year, and be prepared to support the Digital Markets Unit’s structure.’
The digital secretary, Oliver Dowden, remarked, ‘The UK and overseas are in total agreement that when a minority of tech companies monopolises power, it slows down the industry’s development, decreasing innovation and adversely affects people and businesses that are dependent on them.’
‘The time has come for dealing with this, and present a new era of tech development.’
However, the UK may face challenges in their attempt to implement stringent terms on multinational firms. For example, in France, digital tax payments imposed on major tech firms are regarded by the U.S. government as unjust discrimination. It resulted in threats of revengeful taxes on French items like cosmetics and handbags.