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27 November 2020

NMA Welcomes Government’s Response To CMA Market Study Into Online Platforms

The News Media Association has welcomed the Government’s response to the Competition and Markets Authority’s market study into online platforms and digital advertising, urging it to implement the measures “without delay.”

The Government announced this morning that it will set up a Digital Markets Unit - which will begin work in April and sit within the CMA - to oversee a “pro-competition regime” for platforms including those funded by digital advertising, such as Google and Facebook  

A new code will be introduced to govern commercial arrangements between publishers and platforms to help keep publishers in business - helping enhance the sustainability of high-quality online journalism and news publishing in the UK.  

The NMA 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.”

Digital Secretary Oliver Dowden said: “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." 

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.”  

The DMU will could be given powers to suspend, block and reverse decisions of tech giants, order them to take certain actions to achieve compliance with the code, and impose financial penalties for non-compliance, the Government said. 

It will be informed by the work of the Digital Markets Taskforce, which was set up earlier this year to provide advice to the Government on the potential design and implementation of pro-competitive measures – including the methodology which will determine what companies should be designated as having strategic market status, and how a regime would work in practice.  The Taskforce is due to report later this year.   

The Government will consult on the form and function of the Digital Markets Unit in early 2021 and legislate "as soon as Parliamentary time allows."  

CMA chief executive Andrea Coscelli said: "We welcome the Government's response to the findings of our digital advertising market study. Only through a new pro-competition regulatory regime can we tackle the market power of tech giants like Facebook and Google and ensure that businesses and consumers are protected.

"We will soon be providing advice to Government on how this new regime should work, as requested earlier this year, and stand ready to support the setup of the Digital Markets Unit."

Separately, the House of Lords Communications and Digital Committee this morning published its report ‘Breaking news? The Future of UK Journalism’ which called for the DMU to be set up "as a matter of urgency."  

In the report, peers also urged the Government to legislate for a mandatory news bargaining code modelled on the Australian Competition and Consumer Commission’s proposal.

"Once it is set up, the Digital Markets Unit should take on responsibility for this and keep under review publishers’ concerns about the ways in which platforms use their content. The Government and regulators should work closely with international partners on this issue," the committee said.