Following a government request, the CMA and Ofcom have published joint advice which sets out how a code of conduct, if introduced into law, would mean that big tech firms with significant bargaining power would have to agree fair and reasonable terms for the content they use on their platforms. It identifies several methods of doing this, including:
- addressing concerns about the transparency of how algorithms work and which factors are used to determine where different publishers’ content appears in searches;
- giving publishers appropriate control over presentation and branding of their content;
- driving improved practices in the sharing of user data between publishers and those platforms that host their content; and
- redressing the imbalance in bargaining power in negotiations between publishers and the biggest platforms, by providing a framework for fair financial terms for publishers’ content where this is hosted by the largest platforms with significant market power.
Under the government’s proposals, the code would consist of a set of legally-binding obligations on the biggest tech firms, providing clarity about how these firms should act when dealing with consumers and businesses, including publishers. If there is a dispute between a platform and a publisher about the application of a code, the Digital Markets Unit would decide if a contract or certain behaviour by the firm was compliant. The advice says that as well as more traditional enforcement powers to ensure compliance, the DMU should be given a backstop enforcement power to impose binding arbitration to ensure code breaches do not persist for long periods and provide incentives for swift resolutions.
The CMA expects this code to sit alongside other pro-competitive interventions, such as mandating that different services can work together, or that consumers are given choice instead of the same firm’s supporting product being the default. Such interventions would help directly tackle the sources of these platforms’ market power and address market features like barriers to entry, which prevent challenger tech firms driving greater competition and innovation.
The advice sets out the authorities’ view on how a code of conduct could work in the specific instance of the relationship between platforms and content providers, including news publishers. Other countries, such as Australia, have recently made efforts to consider the situation between platforms and publishers. One of the key differences between the UK government’s proposals and the approach followed in Australia in relation to news media is that the proposed regime in the UK has a broader focus. It is intended that codes of conduct for the biggest tech firms will shape their behaviour and reduce the imbalance of bargaining power across a range of digital markets. The advice published sets out the CMA’s current thinking on what guidance on assessing fair and reasonable compensation for content should look like under the proposed regime. It also discusses how approaches such as that being taken in Australia could provide incentives to adhere to conduct requirements that may be imposed on the biggest tech firms by the DMU in the future.
