Owen Meredith is Chief Executive of the News Media Association and a former Conservative parliamentary candidate.
The unchecked dominance of global tech monopolies represents the antithesis of free market competition. So, it is sad to see think tanks and academics that claim the free market as their guiding principle be so eager to support Big Tech’s efforts to maintain and bolster their entrenched market power over UK businesses and consumers.
The Institute of Economic Affairs (IEA) and the International Center for Law & Economics claim that the Digital Markets, Competition and Consumers Bill, currently before Parliament, will result in a ‘tech turn off’.
Nothing could be further from the truth. It is in fact the unbridled control that Big Tech holds over the UK’s digital economy that is blocking start-ups from innovating, holding back the growth of challenger firms, and locking businesses, such as news publishers, into unfair commercial relationships. The result for consumers is a smaller range of poorer products at a higher price.
In a free market, consumers and businesses should be able to vote with their feet. Yet the current situation is more akin to Soviet-style central planning, with supply and demand in a digital market dictated by one or two companies. In fact, Big Tech now wield more power than most countries. They don’t just influence the market; they govern it.
The questions for Parliament and the Prime Minister as the Bill progresses are clear. Are we content for US tech giants to continue to dictate the development of the UK economy? Are we so pessimistic about the ingenuity of UK entrepreneurs and businesses that the future success of our economy is dependent on the continued dominance of digital monopolies? And are we happy to let other jurisdictions such as the EU forge ahead and set the rules for these firms, leaving the UK to be a ruletaker, not a rule-maker?
The answer must be a resounding “No.” Prime Minister Sunak must resist Big Tech pressure to water down the legislation. Critical to the Bill’s success is the retention of the ‘Judicial Review’ appeals standard, a thorough and systematic assessment of the Competition and Markets Authority’s (CMA) decision-making.
Any deviation from this standard will allow Big Tech to harness its unparalleled strength in the courts to obstruct and delay pro-competitive remedies and maintain its dominance. Every day of delay benefits Big Tech and harms consumers. The need for fast enforcement is one of the main reasons that ex-ante regulation in digital markets is necessary. There is no trade-off between speed and the standard of decision-making, as the CMA is an internationally renowned regulator with unparalleled digital expertise.
Crucially, the UK regime is specifically designed to be highly targeted, flexible, and a collaborative regime between the regulator and the regulated. This is a key advantage over the EU Digital Markets Act which is far more prescriptive and less targeted. However, a protracted appeals process would allow Big Tech firms to turn this key advantage into an opportunity to frustrate enforcement, introducing appeals at multiple points in the enforcement process.
In short, only Judicial Review can ensure that the regime works as it was designed, and see the UK retain its place as a global tech leader.
As well as looking to tie up the regulator in endless appeals, Big Tech are also eager to avoid compliance by claiming that its anti-competitive conduct has ‘countervailing benefits’ for consumers that outweigh competition concerns.
The Bill already ensures that these benefits – including privacy and data security – are considered, but the tech lobby wishes to amend the legislation so that anticompetitive conduct need not be ‘indispensable’ to achieving consumer benefit in order to be exempted.
We cannot allow Big Tech firms to proceed with anti-competitive conduct that is unnecessary to achieve consumer benefits. Again, the Prime Minister must stand firm.
Next week, the news media industry will come together for its annual Journalism Matters campaign which celebrates the good journalism does for our democratic society. The Bill will look to rebalance the relationship between publishers and platforms by ensuring publishers can negotiate commercial terms with Big Tech. These negotiations would encompass the value that platforms bring to publishers, as well as the myriad benefits that news publishers bring to platforms – this ensures that negotiations would be fair and reasonable.
The IEA has sought to argue that the impact of new technologies on the news industry is an example of ‘creative destruction’, yet platforms do not create trusted journalism and they rely on such content to monetise their services.
In any case, if platforms sincerely believe that their services are worth more to publishers than vice versa, why not support the legislation and reap the benefits of negotiation?
The UK has developed a world-leading digital competition regime that can cement our place as a science and technology superpower. Far from walking a tightrope between regulation and innovation, the Bill will unleash innovation by taking a proportionate approach and regulating only a handful of global monopolies, bolstering the UK’s position as a global tech investment hub.
The Government must hold firm and not water down the Bill; only by handing control back to UK businesses and consumers can we guarantee the fiercely competitive markets that spur economic growth.