Government to create competition regime tackling ‘fundamental imbalance of power’ between platforms and publishers

A new competition regime designed to rein in the dominance and power of platforms such as Google and Facebook has been announced.

The Department for Digital, Culture, Media and Sport and Department for Business said the Digital Markets Unit will rebalance the relationship between news publishers and the tech giants.

It will govern their commercial relationships, ensuring the platforms are not imposing terms that limit the publishers’ ability to monetise their content.

The unit will attempt to give people more choice and control over their data, as well as ensuring businesses are fairly treated.

A statutory code of conduct could force platforms to be more transparent about the services they provide and how they are using consumers’ data.

The new unit, which will be set up within the Competition and Markets Authority and co-ordinate with regulators including Ofcom and the Information Commissioner’s Office, is set to begin work in April.

Powers to suspend, block and reverse decisions of tech giants, as well as the ability to order them to take certain actions to achieve compliance with the code, have been proposed, with the threat of financial penalties for failure to follow the rules.

Culture Secretary Oliver Dowden said: “As more and more news moves online we want to make sure our world-renowned publishers get a fair deal from the tech platforms so we can help guarantee their long-term sustainability.

“Today we are announcing plans that will benefit news publishers by preventing the application of unfair terms, conditions and policies by the tech firms using their content.

“This is a really important change to help bolster the news industry.”

Dowden added: “I’m unashamedly pro-tech and the services of digital platforms are positively transforming the economy – bringing huge benefits to businesses, consumers and society.

“But there is growing consensus in the UK and abroad that the concentration of power among a small number of tech companies is curtailing growth of the sector, reducing innovation and having negative impacts on the people and businesses that rely on them.

“It’s time to address that and unleash a new age of tech growth.”

The code could be used to ensure platforms are not applying unfair terms, particularly on strained news publishers which have long lost out on a greater slice of digital advertising in the face of dominant tech giants.

Business Secretary Alok Sharma said: “Digital platforms like Google and Facebook make a significant contribution to our economy and play a massive role in our day-to-day lives – whether it’s helping us stay in touch with our loved ones, share creative content or access the latest news.

“But the dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers.

“Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren’t pushed out.”

Parliament warns tech platforms present ‘existential threat’ to journalism

The move comes as the House of Lords Communications and Digital Committee warned that a “fundamental imbalance of power” between news publishers and platforms must be fixed to save journalism from an “existential threat”.

In its Future of Journalism Inquiry report, the committee urged the Government to stop “dragging its feet” and set up a Digital Markets Unit “as a matter of urgency”.

The committee had heard evidence the Department for Business had briefed that legislation would not be ready until the end of 2021 with the Digital Markets Unit set up in 2022 at the earliest.

“The news industry cannot afford to wait that long,” the report said.

The Government said on Friday it will consult on the form and function of the Digital Markets Unit in early 2021 and legislate “as soon as parliamentary time allows”.

Lord Gilbert of Panteg said: “Publishers need platforms far more than the platforms need them and are disadvantaged by a dysfunctional online advertising market.

“It’s essential that the Government acts swiftly to remedy this and sets up the Digital Markets Unit as a matter of urgency.”

Michelle Stanistreet, general secretary of the National Union of Journalists, had agreed there is a “need for the tech giants to be brought to book for their stranglehold on the media industry and the unfair competition for advertising revenue”.

Peers also urged the Government to give Ofcom greater powers to regulate public service broadcasters’ online news content, which is not currently covered under its remit, as well as ensuring it monitors the accuracy and impartiality of their journalists’ public social media posts.

The UK News Media Association said: “We welcome the Government’s response today to the CMA’s market study into the digital advertising market which unearthed evidence of systematic anti-competitive behaviour and the detriment this is causing, not only to publishers but to advertisers and consumers.

“The NMA has called for a dedicated Digital Markets Unit to regulate the tech platforms and a code of conduct to govern the relationship between publishers and the platforms.

“This should include a statutory obligation for the platforms to carry and surface news publishers’ content and to pay for its use. We are pleased that the Government has accepted the CMA’s recommendations and committed to setting up the DMU and an enforceable code which will help underpin a sustainable future for journalism. We urge the government to implement these without delay.”

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