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10 December 2020

CMA: Government Must Move Quickly On Legislation To Regulate The Tech Platforms  

Government must “move quickly” in taking forward legislation to underpin a new regulatory regime for the tech giants which will reset the relationship between publishers and the platforms, the Competition and Markets Authority has said. 

In its advice to Government this week, the CMA’s Digital Markets Taskforce said the legislation underpinning the Digital Markets Unit was needed quickly to “take advantage of the clear opportunity for the UK to lead the way in championing a modern pro-competition, pro-innovation regime.”

The CMA specifically referenced the relationship between publishers and the platforms saying that the new legally binding codes must address concerns about the effect of the power and position of the tech platforms when dealing with publishers.  

The News Media Association welcomed the Government’s announcement of a new regulator for the tech giants and this week echoed the CMA’s call for Government to move quickly to bring forward the legislation.

The NMA said: “The unfair imbalance between the platforms and publishers – who invest in independent journalism which provides so much benefit to our society – has gone for long enough.

“There is no time to waste. Government must now act quickly and decisively to bring forward in the next Parliamentary session the legislation needed for a tough and effective regulatory regime which enables news media to fairly rewarded for the journalism they invest in.”

Speaking at the Society of Editors virtual conference Minister for Media and Data John Whittingdale said his preference was for the legislation backing the Digital Markets Unit to be enacted in the next Parliamentary session.   

In its advice this week, the CMA listed the three key proposed pillars of the regime as new, legally binding code of conduct tailored to each firm to govern elements of how they do business with other companies, pro-competitive interventions, and enhanced merger rules.

The CMA added: "The DMU could set out in guidance how the code principles should apply to trading between SMS firms and publishers. Under our proposed approach to the code, the terms on which publishers trade with SMS firms could be assessed through a principle under the objective of fair trading.

"For example, the DMU could consider the extent to which it is reasonable for platforms to republish ‘snippets’ of content, and whether the terms on which they do this are fair.

"We agree with the Cairncross Review’s view that establishing what is a fair value exchange between two commercial parties would be difficult for a DMU or arbitrator to establish. The remedy powers associated with the code that we are recommending in this report do not include direct outcome regulation and would not enable the DMU to set prices.

"However, the code could allow the DMU to determine whether terms are fair and reasonable, taking into consideration the volume of content published, the price paid, and the service provided. If the DMU had concerns that a term might breach the code and was not fair and reasonable it would have a range of tools available to address this."