By Victoria Willingham • December 01, 2020•Writers in Residence
Working in the legal field, I find that I am most often intrigued by the emergence of new laws where precedence does not exist. Fortunately, the intersection of technology and law creates a space where that scenario plays out on a regular basis.
As big tech continues to evolve, various government bodies have started directly addressing competition concerns within the digital market. In efforts to grant consumers more control and choice regarding their data and to ensure the fair treatment of businesses, the U.K. has created a new competition regime within the Competitions and Markets Authority (CMA). The Digital Markets Unit (DMU), the task force dedicated to this new regime, will collaborate with regulators to enforce a new code that will specifically function as a means to ensure big tech practices do not disadvantage small businesses and consumers.
In July of 2020, the CMA published a market study report addressing the dominant role big tech plays in the digital space, finding that the current competition structure is on a trajectory to cause significant negative impact. The report outlined several factors that contribute to this projected harm, including: no consumer control, diminished innovation, diminished quality, large-scale social harm, and increased prices. As it pertains to consumer control, the study asserts that consumers should have the choice to opt-in to sharing their data when using platforms – which translates to only having minimal options for partaking in services and terms. The report argues that there is no pressure on big tech companies to make any changes to their current practices, therefore, innovation is diminished because there is no new development in areas like advertisement. As the number of advertisements consumers are exposed to continues to increase on the big tech platforms, the report argues that the quality of the advertisements decreases. Additionally, the report asserts that there is a large-scale threat to the society as weaker competition can foster an environment for lower quality journalism. Finally, as it pertains to increased prices, the report found that businesses are facing higher than necessary prices due to having minimal options for advertising and other digital services.
With development work slated to begin in April of 2021, the new code is expected to govern behavior of dominant platforms in the market. The code will provide guidelines with which tech companies will be required to comply. Additionally, there is a potential for fines and other repercussions if guidelines are not met.
This regulatory development is sure to have a great impact on the constantly-evolving laws within big tech. I’m excited to follow this particular initiative and observe it’s framework in action.