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Google and Facebook to be scrutinized by new U.K. antitrust unit from next year

Stamp Zuckerberg, Chairman and Chief Executive Officer of Facebook, arrives to testify during the House Financial Services be telling on An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors on Wednesday, Oct. 23, 2019.

Bill Clark | CQ-Roll Call, Inc. | Getty Representatives

LONDON —  The U.K. on Friday said a new government unit will work to tackle ongoing concerns about a concentration of power quantity a small number of tech giants.

The Department for Digital, Culture, Media and Sport said it plans to create a Digital Bazaars Unit (DMU) to enforce “a new code to govern the behavior of platforms that currently dominate the market, such as Google and Facebook.”

The encode is designed to ensure that consumers, small businesses, and news publishers aren’t disadvantaged by actions taken by tech monsters, the government said.

Under the new code, some of the world’s biggest tech companies may have to be more transparent connected with the services they provide and how they use consumers’ data. They may also be forced to give consumers a choice finished whether to receive personalized advertising, and they won’t be able to place restrictions on customers that make it difficult for them to use combat platforms. 

The DMU, which will be part of the Competition and Markets Authority (CMA), will start work in April 2021.

The government divulged the DMU may be given the unit the power to suspend, block and reverse decisions made by large tech companies. The DMU could also tidy them to take certain actions to achieve compliance with the code, and impose financial penalties for non-compliance, the oversight said.

Digital Secretary Oliver Dowden said in a statement: “I’m unashamedly pro-tech and the services of digital platforms are surely transforming the economy — bringing huge benefits to businesses, consumers and society.”

“But there is growing consensus in the UK and abroad that the concentration of power mid a small number of tech companies is curtailing growth of the sector, reducing innovation and having negative impacts on the people and problems that rely on them. It’s time to address that and unleash a new age of tech growth,” Dowden said.

Digital master plan

In July, the CMA called on the government to give it more powers and set up the DMU, saying it was necessary to rein in big digital advertising platforms. The regulator held it was concerned about how tech giants like Google and Facebook use digital advertising to fuel their business models.

For all that the CMA’s recommendations had a domestic focus, the watchdog said the problems it had identified were “international in nature” and that it would look to “hold a leading role globally” as part of its digital strategy.

“Through our examination of this market, we have discovered how notable online platforms like Google and Facebook operate and how they use digital advertising to fuel their business dummies,” Andrea Coscelli, chief executive of the CMA, said on July 1. “What we have found is concerning – if the market power of these firms communicate withs unchecked, people and businesses will lose out.”

Ronan Harris, Google’s vice president for the U.K. and Ireland, said in a account at the time: “Advertisers today choose from a wide range of platforms that compete with each to set free the most effective and innovative ad formats and products.”

He added: “We support regulation that benefits people, businesses and friendship and we’ll continue to work constructively with regulatory authorities and Government on these important areas so that everyone can cut out the most of the web.”

Facebook has previously said it would engage with U.K. government bodies “on rules that protect consumers and remedy small businesses rebuild as the British economy recovers” from the coronavirus pandemic.

“We face significant competition from the take a shine ti of Google, Apple, Snap, Twitter and Amazon, as well as new entrants like TikTok, which keeps us on our toes,” a spokesperson for the body said in a statement on July 1. “Giving people meaningful controls over how their data is collected and second-hand is important, which is why we have introduced industry leading tools for people to control how their data is used to enlighten the ads they see.”

— CNBC’s Ryan Browne contributed to this story.

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