UK launches new watchdog to promote online competition

Online platforms make it easier for people and businesses to stay in touch, but a small number of companies dominate the market which can lead to less choice and higher prices.

In the UK today sees the launch of the Digital Markets Unit (DMU) intended to create a new pro-competition regime to cover platforms with considerable market power.

The government announced plans for the new unit in November last year and it starts work today looking at how codes of conduct could work to govern the relationship between digital platforms and groups such as small businesses which rely on them to advertise or use their services to reach customers. It will take a sector neutral approach in examining the role of platforms across a range of digital markets, with a view to promoting competition.

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It will work with communications regulator Ofcom to look specifically at how a code would govern the relationships between platforms and content providers such as news publishers, including ensuring they are as fair and reasonable as possible.

Digital Secretary Oliver Dowden says:

Today is a major milestone in the path to creating the world’s most competitive online markets, with consumers, entrepreneurs and content publishers at their heart.

The Digital Markets Unit has launched and I've asked it to begin by looking at the relationships between platforms and content providers, and platforms and digital advertisers.

This will pave the way for the development of new digital services and lower prices, give consumers more choice and control over their data, and support our news industry, which is vital to freedom of expression and our democratic values.

The unit will work closely with the Competition and Markets Authority (CMA) enforcement teams already taking action to address practices by digital firms, which may harm competition and lead to poor outcomes for consumers and businesses. This includes taking enforcement action against Google and Apple, and scrutinising mergers involving Facebook and eBay.

Andrea Coscelli, chief executive of the CMA says, "Today is another step towards creating a level playing field in digital markets. The DMU will be a world-leading hub of expertise in this area and when given the powers it needs, I am confident it will play a key role in helping innovation thrive and securing better outcomes for customers."

The DMU will also collaborate with other regulators including the Information Commissioner's Office, Ofcom and the Financial Conduct Authority to ensure that consumers and businesses are protected and the new regime is coherent and effective.

The work being announced today will inform future legislation in this area and follows the CMA's market study into online platforms and digital advertising.

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