In recent years, regulators have taken a newfound interest in the powerplay among technology giants. From time to time, regulators worldwide have been taking proactive steps to ensure a healthy competition in the market. Recently, the government of the United Kingdom has announced plans to impose new regulations next year aimed at preventing Facebook and Google from abusing market dominance.
Under the plans, the CMA (Competition and Markets Authority) will gain a new Digital Markets Unit, empowered to create and implement a new code of practice on technology firms which will set out limits of acceptable behavior.
Sources cite that the code will impact those firms deemed to have a ‘leading market position’. The government’s move comes in response to the CMA’s investigation which began as a narrow look at the digital marketing industry but was later extended out to cover Facebook and Google’s dominance of the market.
Under the new code, platforms that are funded by digital marketing could be needed to be more transparent regarding their services. They are likely to give users a choice over whether to receive customized advertisements or not and are prohibited from placing limitations on their users that make it hard for them to use competing platforms.
Alok Sharma, the business secretary of state for business, energy and industrial strategy said that digital platforms such as Facebook and Google make a considerable contribution to the economy and play a pivotal role in our day-to-day, be it helping people stay in touch with beloved ones, access the latest news, or share creative content.
However, the dominance of just a few major companies is leading to decreased innovation, higher advertising costs, and less control and choice for customers, Mr. Sharma said while adding that the nation’s new regime for digital markets would ensure that consumers have enough choice and mean small scale companies aren’t pushed out.