Silicon Valley tech giants face UK crackdown with newly proposed consumer protection rules

Under the proposals, a new Digital Markets Unit can impose additional obligations on firms with ‘strategic market status’ and global revenue of US$31 billion

The rules could force tech firms to open up data to rivals and impose fines of up to 10 per cent of global revenue for breaking consumer laws

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Union Jack flags are seen in front of the Elizabeth Tower, known as Big Ben, beside the Houses of Parliament in London on June 24, 2022. Photo: AP

Published: 10:05am, 25 Apr 2023Updated: 6:24pm, 25 Apr 2023

Big Tech firms from Google to Meta Platforms face beefed-up oversight and potential fines of as much as 10 per cent of global sales for practices that hurt consumers, under sweeping new legislation set to be unveiled on Tuesday by the UK government.

Under the proposals, a new Digital Markets Unit (DMU) in the nation’s antitrust regulator will have powers imposing additional obligations on some of Silicon Valley’s biggest companies earmarked as having “strategic market status”. The new regime would target firms with entrenched market power in at least one digital activity and global sales above £25 billion (US$31.2 billion), or UK revenue in excess of £1 billion.

“This has the potential to be a watershed moment in the way we protect consumers in the UK and the way we ensure digital markets work for the UK economy, supporting economic growth, investment and innovation,” said Sarah Cardell, chief executive of the Competition and Markets Authority (CMA).

Britain first laid out potential plans to create new digital competition rules in early 2019, at the time making the country a front-runner in the global push to rein in Big Tech. The new powers come after delays to introduce the proposals last year meant the European Union was significantly ahead of the UK with its landmark Digital Markets Act. The measures mirror strengthened powers handed to German antitrust regulators to probe companies that play a “paramount significance”.

The draft Digital Markets, Competition and Consumers Bill, which includes a range of powers for the CMA, still needs to get parliamentary approval and go through a further legislation process before it can kick-start.

Details of how the UK’s new regime will be enforced include:

The DMU will hold senior managers at tech companies responsible for ensuring compliance with information requests.
Firms will be able to appeal DMU decisions to the specialist competition court, the Competition Appeal Tribunal.
Tech firms can be asked to open up their data to rival search engines or increase the transparency of apps stores or marketplace review systems.
Tackle fake reviews and so-called subscription traps.
Update of mergers regime to increase the thresholds to review a deal from £70 million to £100 million.
Tougher fines for companies breaking consumer laws including as much as 10 per cent of global revenue.