Google and Facebook face regulation from the Digital Markets Unit, a new digital watchdog in the UK

The UK government has announced the creation of a new digital watchdog, the Digital Markets Unit. The news won’t be welcomed by tech companies already fighting multiple battles around the world – the Digital Markets Unit will increase pressure on the tech giants around issues of personalized advertising and their relationship with publishers.

However, there are no set plans as to what regulation will look like, or even which platforms will be targeted. Facebook and Google have hit headlines as they were specifically referenced by Business Secretary Alok Sharma in the announcement and Andrea Coscelli, the Chief Executive of the UK’s Competitions and Markets Authority (the Digital Markets Unit will sit within the CMA). Coscelli is quoted in The Guardian as saying “only through a new pro-competition regulatory regime can we tackle the market power of tech giants like Facebook and Google and ensure that businesses and consumers are protected.” Establishing rules and the scope of any regulation appears to be the Digital Markets Unit’s first job.

Although tech giants will be watching things closely, in the context of ongoing Brexit challenges and the pandemic it’s questionable just how prepared the UK government is to take on some of the largest tech companies on the planet.

Read more stories about antitrust in the tech industry.

Why now?

In The Guardian, Alex Hern writes that the move is a response to a 2019 CMA investigation into digital advertising. Sharma, meanwhile, spoke in broad terms about the challenges that large tech platforms pose.“The dominance of just a few big tech companies” he said, “is leading to less innovation, higher advertising prices and less choice and control for consumers. Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren’t pushed out.”

The aim is ultimately to ensure fairness for consumers. But as you can see from Sharma’s statement, the way out of this unfairness is through enabling greater “innovation.” What that means in practical terms is hard to say – if the internet has taught us anything over the last decade it’s that digital innovation has a habit of creating and consolidating monopolies. It appears to be a feature rather than a bug of our current reality.

It’s important to note that if the DMU is to protect consumers it will need to work in the interests of both end users and businesses that depend on large technology platforms. Yes, it will need to ensure more transparency and control for those of us that engage with content and purchase products through these platforms, but it will also have to work to improve the situation for businesses too. These include – but aren’t limited to – content publishers, whose content absolutely essential to platforms like Google and Facebook.