Competition Experts Call For Action On Tech Platforms
Competition experts have called for action to level the playing field between the tech platforms and news publishers by giving the Digital Markets Unit the tools it needs to do the job, adding that the time for consultation is over.
Competition lawyers Professor Damien Geradin and Dr Liza Lovdahl-Gormsen answered questions this week on the Digital Markets Unit from the Lords Select Committee on Communications and Digital.
Professor Geradin, professor of competition law and economics, Tilburg University, stressed the vital importance of the Competition and Markets Authority taking action to regulate the digital market. He said: “In 2018, the UK clearly had the lead and since then, things have stalled.
“Four years later, there is no legislation. I think I must say there is a bit of a British disease, which is consultation on top of consultation, I always thought consultations were good, but there must be a time for action.
“In the meantime, the CMA has used its existing powers to launch market studies and investigations. When their market study on online platforms and digital advertising came out in 2020, I was disappointed that the CMA did not pursue a market investigation.
“If it had done so, we would have remedies in place. In fact, we’re still waiting for the enabling legislation.
“We may see some remedies in place by the end of 2023, or 2024. But it is regrettable that the CMA did not seize the opportunity to proceed more quickly.”
Responding to a report in The Mail On Sunday this week, the News Media Association welcomed reports that the legislation to put the Digital Markets Unit on statutory footing was underway.
NMA chief executive Owen Meredith said: “The NMA has consistently called for urgent legislation to put the DMU on a statutory footing.
“For too long the tech platforms have been able to abuse their dominant position to leech advertising revenues away from the publishers who invest in news content while contributing next to nothing back into the sector.
“It is vital that the new regime brings this unfair and unsustainable imbalance of power to an end once and for all, ensuring consumers have access to trusted sources of news and information online.”
Professor Geradin also stressed the importance this legislation had for publishers: “News publishers have been challenged in recent years for various reasons.
“One of the reasons is their ad revenue has largely been taken away by digital platforms, this was made clear in the market study on digital advertising.
“This market study pointed to several remedies that could have been adopted to resolve the situation. Nothing has been done. These problems are still ongoing. Publishers are still suffering from the lack of competition and choice in the space. Every month that passes means more damage is being done.”
When asked on how can the tech platforms be brought to heel, Professor Geradin said: “A country like the UK has a big digital market. Some degrees of fines can be helpful to ensure compliance, if they are sufficiently high – but with an unwillingness to comply, one should consider personal sanctions.
“People have come to realise something needs to be done to curb the market power of these companies. They had a free rein for many, many years. The goal is simply to make sure that they allow competition to make space for rivals and new entrants and that they are not allowed to exploit their customers.
“If these rules are in place and properly enforced, they can still do very well, but it also means others can too.”
Dr Lovdahl-Gormsen, director of the competition law forum and senior research fellow in competition law, British Institute of International and Comparative Law, warned of the harm to consumers from delaying further: “It is time for the CMA to stop writing reports and get action going. The delay has forced many people to take private action in the UK against tech platforms.
“I am a claimant in a case against Facebook which has been launched on behalf of 44 million UK users. The slowness has created harm to UK consumers on a daily basis – they are being exploited.
“The CMA have not used their powers that are readily available to them. The DMU will be responsible for enforcing the code of conduct – but how will they enforce this and ensure compliance? It is important that they provide support and guidance so that firms understand what they are supposed to do.
“The ICO also have limited remedies at hand. They can only impose a four per cent fine of a company’s annual turnover, which is not enough.
“With the DMU, as long as it is judicial review only, the court can only look into the decision, rather than the rights or wrongs of the conclusion reached by the DMU.
“The DMU will also have to liaise with the ICO, Ofcom and other regulators in the country -these companies operate globally and across many areas of law. The ICO will have to look hard at what they have done and not done.”