Watchdog must maintain powers to scrutinise big tech firms, says Rocio Concha of Which?

Dear Rocio, How can ministers ensure disputes over tech giants' powers don't drag through the courts?

The Digital Markets Unit (DMU) might just be the most important regulator you’ve not heard of. It’ll work out of the Competition and Markets Authority (CMA), the country’s competition regulator, and its chief mission is to promote greater competition and innovation in digital markets dominated by a small group of big tech with substantial power. By doing so, it’ll help to level the playing field between Big Tech (those many of us use everyday to work, socialise and look up information - such as Google, Apple, Amazon and Meta/Facebook - and other companies trying to compete with them, as well as making sure consumers and businesses that rely on those powerful tech firms are not exploited.

In practice, that means introducing checks and balances on Big Tech’s dominance. The DMU will be able to assign a digital company ‘strategic market status’ if it is particularly powerful in one digital market, with a significant number of users in the UK such as Google, Meta and Apple. For example, we know that some tech companies automatically install their own software on their own devices or platforms but this prevents rival companies from getting a foothold. So the DMU could stop those big tech companies from having that unfair advantage, and help consumers to install the software that works best for them.

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Unsurprisingly, the tech giants are lobbying to weaken the DMU’s powers. Much of this has centred on the mechanism for appealing DMU decisions - where lawyers and lobbyists have spotted a backdoor route to undermine the new regulator’s ability to do its job effectively.

The Digital Markets Unit (DMU) might just be the most important regulator you’ve not heard of, says Rocio Concha of Which? (Photo by Dominic Lipinski/PA Wire)The Digital Markets Unit (DMU) might just be the most important regulator you’ve not heard of, says Rocio Concha of Which? (Photo by Dominic Lipinski/PA Wire)
The Digital Markets Unit (DMU) might just be the most important regulator you’ve not heard of, says Rocio Concha of Which? (Photo by Dominic Lipinski/PA Wire)

Under current plans, firms would take their grievances to a Judicial Review in the Competition Appeal Tribunal, a specialist body that is already well experienced in presiding over competition disputes.

Crucially, Judicial Review means that cases can only be heard if the regulator is believed to have not followed due processes correctly - and not simply because tech firms argue the decision itself is wrong or want to delay the outcome with spurious litigation. It’s a tested legal level playing field.

Tech giants would prefer a different approach, where they can challenge the decisions in a ‘merits appeal’, where they reopen the whole decision. This would not only undermine the authority of the DMU, an independent regulator with strong expertise in these complex digital markets, whose decisions could then be rejected by a higher power, but any appeal could take years to complete. Lengthy legal processes can be eye-wateringly expensive - although small change for some of the deepest-pocketed tech companies in the world - and while any appeal drags on, the tech companies could continue to cement their products or services with consumers at an uncompetitive advantage. This would be closer to maintaining the Goliath status a few firms enjoy and exploit on the global stage.

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So far the government has resisted siren calls for this approach. However, there are now rumours that the Prime Minister is looking at a compromise which would give powerful tech companies a new legally untested route for challenging and dragging out decisions.

Judicial Review, which will provide a vital check on the DMU's decisions, must be maintained so that the regulator can focus on its main aim: promoting competition in digital markets.

What good is a regulator that constantly finds itself devoting significant resources to fighting legal battles when it instead can have a direct impact on enabling businesses with the best products and services to compete fairly?

The more choice you or I have to shop around, the more innovation springs because challengers to tech giants know they have a realistic chance of competing. More choice could also lead to lower prices - something millions of us are more wary of amid the worst cost of living crisis in decades.

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The UK has shown so far that it is more than prepared to go it alone with a regulatory regime, divergent from its European counterpart, that has the chance to be genuinely world-leading to ensure digital markets in the UK continue to thrive and deliver benefits for consumers.

It could send a message to emerging tech firms that the country is open for business because there’s a real chance of them being able to compete with Big Tech. It’s no surprise that they have become resistant to change. Ministers must drown out the noise and focus on the bigger prize.

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