The UK government has outlined the powers of its new digital regulator, the Digital Markets Unit (DMU), which will have the authority to issue fines of up to 10% of a company's annual turnover.
The new powers are part of a proposal that aims to help British startups compete against the tech giants that dominate the market, such as Google and Amazon.
The DMU was launched in April and sits within the Competition and Markets Authority (CMA). It will work alongside tech firms to "inject" stronger competition into the digital sector, according to the government.
The unit will be given powers to "designate" tech firms that hold substantial and entrenched market power with 'Strategic Market Status' (SMS) which will force them to follow new rules within the market. These rules are still in a proposal stage, but could include a ban on pushing customers into using default or mandatory services, or blocking third-party firms.
The proposals will be underpinned by powers of investigation and significant penalties, such as the 10% fine. In addition, the DMU will also have the authority to suspend, block and reverse code-breaching behaviour by tech giants. As an example, the government cites unfair changes to an algorithm or Terms and Conditions that either impact the consumer experience or affect a rival company.
RELATED RESOURCE
Money management: How the top 10 Forbes billionaires made their fortune
Sample our exclusive Business Briefing content
The DMU will also look at the root cause of competition issues in the digital market, which could result in measures to support interoperability, essentially forcing digital platforms to be more compatible with each other.
"The UK's tech scene is thriving but we need to make sure British firms have a level playing field with the tech giants, and that the public gets the best services at fair prices," the digital secretary, Oliver Dowden.
"So we will be giving our new Digital Markets Unit the powers it needs to champion competition and drive growth and innovation, with tough fines to make sure the biggest tech firms play by the rules."
-
AI is helping bad bots take over the internetNews Automated bot traffic has surpassed human activity for the first time in a decade, according to Imperva
-
Two years on from its Series B round, Hack the Box is targeting further growthNews Hack the Box has grown significantly in the last two years, and it shows no signs of slowing down
-
How to empower employees to accelerate emissions reductionin depth With ICT accounting for as much as 3% of global carbon emissions, the same as aviation, the industry needs to increase emissions reduction
-
Worldwide IT spending to grow 4.3% in 2023, with no significant AI impactNews Spending patterns have changed as companies take an inward focus
-
Report: Female tech workers disproportionately affected by industry layoffsNews Layoffs continue to strike companies throughout the tech industry, with data showing females in both the UK and US are bearing the brunt of them more so than males
-
How can small businesses cope with inflation?Tutorial With high inflation increasing the cost of doing business, how can small businesses weather the storm?
-
How to deal with inflation while undergoing digital transformationIn-depth How can organizations stave off inflation while attempting to grow by digitally transforming their businesses?
-
How businesses can use technology to fight inflation
TUTORIAL While technology can’t provide all the answers to fight rising inflation, it can help ease the pain on businesses in the long term
-
Embattled WANdisco to cut 30% of workforce amid fraud scandalNews The layoffs follow the shock resignation of the company’s CEO and CFO in early April
-
Is Rishi Sunak’s ‘Unicorn Kingdom’ a reachable goal or a mere pipedream?Analysis Plunging venture capital investment and warnings over high-growth company support raise doubts over the ‘Unicorn Kingdom’ ambition
