Competition review in UK calls for a new digital markets unit
Tech giants have become increasingly dominant and ministers must open the market up to increase consumer choice and give people greater control over their data, an independent review for the UK government has advised. Harvard professor, Jason Furman, who was chief economic adviser to President Barack Obama’s White House and who led the review, warned that UK competition rules must be updated to be fit for the digital age. He cited the benefits brought by technology firms but said the rules needed to evolve to keep pace with the market. He has urged the government to increase competition in the digital sector by setting up a new competition unit and strengthening outdated laws. He believes more companies would then be able to join the market on a more equal-footing – ushering in a new wave of innovation and the creation of new social media and online search platforms. Among the recommendations are 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 unit should give people more control over their data by enabling people to switch between platforms more easily; and it should also develop a code of conduct so the largest digital companies know the competitive rules of the game. Further, regulators’ existing powers for tackling illegal anti-competitive practices need to be strengthened, and changes to merger rules are needed so the UK competition authority (CMA) can better stop digital mergers that are likely to damage future competition, innovation and consumer choice; and 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. The UK should also engage internationally on all of these issues. The government is expected to formally respond to the recommendations in the summer. Read the report.
- Monday, 18 March 2019