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17 September 2020

CMA Calls For Strong International ‘Coherence’ In Tackling The Tech Giants  

The Competition and Markets Authority has called for “strong coherence between different regimes internationally” in tackling the issues caused by the dominance of the tech giants.

In its response to the European Commission’s consultations on the Digital Services Act package and the New Competition Tool, the CMA reiterated its view that competition is not working well in the digital advertising markets leading to “substantial” harm for consumers and society as a whole. 

The CMA welcomed the Commission’s focus on online platforms and digital markets, adding that many of the proposals in the Digital Services Act were similar to those made in its own market study on digital advertising which was welcomed by the News Media Association.

In the report, the CMA said that the “exploitation” of commercial relationships with news media publishers by Google and Facebook was likely to lead to consumer harm as publishers were less likely to be able to monetise their content.

But industry is calling on the UK Government to act fast to save news media and journalism by introducing swift support measures for news media, and enacting the proposals to tackle the dominance of the tech giants outlined by the CMA in its report.

The new regime would be comprised of an enforceable code of conduct to mitigate the effects of the market power of the tech giants by governing their behaviour, and a range of “pro-competitive interventions” to tackle the sources of market power and promote competition.

“This review found that competition is not working well in these markets, leading to substantial harm for consumers and society as a whole. The final report recommended the UK Government establish a new pro-competition regulatory regime, overseen by a Digital Markets Unit," the CMA said.

“The CMA is now leading a Digital Markets Taskforce to consider the design and implementation of a forward looking, procompetitive framework for digital markets. The Taskforce will provide its advice to the UK Government by the end of this year.” 

In its response to the Commission consultations, the CMA highlighted the need for international cooperation to tackle the tech giants. “We believe it is desirable that there is strong coherence between different regimes internationally, particularly in relation to large platforms acting as gatekeepers,” it said.

The NMA has urged the UK Government to follow Australia’s lead in tackling the tech giants to ensure that the UK does not get left behind.