The UK government has published an independent report on the state of competition in digital markets, which also covers proposals aimed at boosting competition and innovation for the benefit of consumers and businesses.
The report is from the Digital Competition Expert Panel. It makes recommendations for changes to the UK’s competition framework that it says are needed to face the economic challenges posed by digital markets, in the UK and internationally. The report recommends updating the rules governing merger and antitrust enforcement, as well as proposing a set of pro-competition measures to open up digital markets. The key points are:
- the review finds that tech giants do not face enough competition
- new markets unit needed to set and enforce rules
- existing rules need updating to tackle mergers and improve enforcement
- action is needed to increase choice and innovation for consumers
The Panel also notes that:
- a new digital markets unit should be set up with expertise in technology, economics and behavioural science and the legal powers to back it up
- the new unit should give people more control over their data by enabling people to switch between platforms more easily
- it should also develop a code of conduct so the largest digital companies know the competitive rules of the game
- regulators’ existing powers for tackling illegal anti-competitive practices need to be strengthened – making it quicker and simpler to prosecute breaches, such as bullying tactics by market leaders
- changes to merger rules are needed so the Competition and Markets Authority can better stop digital mergers that are likely to damage future competition, innovation and consumer choice
- the CMA should launch a formal market study into the digital advertising market which is dominated by two players and suffers from a lack of transparency
- powers to force the largest companies to open up to smaller firms through providing access to key data sets, when doing so does not affect privacy
- the UK should engage internationally on all of these issues
The UK government is expected to formally respond to the report’s recommendations in the summer.