Google and Facebook will be reviewed by the new UK unit from next year

LONDON – The UK on Friday said a new government unit would work to address lingering concerns about a concentration of power among a small number of tech giants.

The Digital, Culture, Media and Sports Department said it plans to create a Digital Markets Unit (DMU) to enforce “a new code to govern the behavior of platforms that currently dominate the market, such as Google and Facebook “.

The code is designed to ensure that consumers, small businesses, and news publishers are not disadvantaged by actions taken by tech giants, the government said.

Under the new code, some of the world’s biggest tech companies may need to be more transparent about the services they provide and how they use consumer data. They may also be forced to give consumers the choice of whether or not to receive personalized advertising, and they will not be able to impose restrictions on customers that prevent them from using competing platforms.

The DMU, ​​which will be part of the Competition and Markets Authority (CMA), will start its work in April 2021.

The government has said DMU may have the power to suspend, block and reverse decisions made by big tech companies. The DMU could also order them to take certain measures to comply with the code and impose financial penalties for non-compliance, the government said.

Digital Secretary Oliver Dowden said in a statement: “I am unabashedly pro-tech and digital platform services are positively transforming the economy – bringing huge benefits to businesses, consumers and society.”

“But there is a growing consensus in the UK and abroad that the concentration of power among a small number of tech companies slows the growth of the sector, reduces innovation and has negative impacts on people and businesses. companies that depend on it. do that and spark a new era of technological growth, ”said Dowden.

In July, the CMA called on the government to give it more power and create the DMU, ​​saying there was a need to curb large digital advertising platforms. The regulator has expressed concern about how tech giants like Google and Facebook are using digital advertising to fuel their business models.

Although the CMA’s recommendations are national in scope, the watchdog said the issues he identified were “international in nature” and that he would seek to “play a global leadership role” in as part of its digital strategy.

“Through our review of this market, we found out how major online platforms like Google and Facebook work and how they use digital advertising to power their business models,” said Andrea Coscelli, CMA CEO, July 1. found worrying – if the market power of these companies is not controlled, people and companies will lose. “

Ronan Harris, Google vice president for UK and Ireland, said in a statement at the time: “Advertisers today choose from a wide range of platforms that each compete to deliver the formats and the most effective and innovative advertising products. “

He added: “We support regulation that benefits people, businesses and society and we will continue to work constructively with regulators and government on these important areas so that everyone can get the most out of the web. “

Facebook has previously said it will engage with UK government bodies “on rules that protect consumers and help small businesses rebuild as the UK economy recovers” from the coronavirus pandemic.

“We face significant competition from Google, Apple, Snap, Twitter and Amazon, as well as new entrants like TikTok, which keeps us on our toes,” a company spokesperson said in a statement. July 1. “People have significant control over how their data is collected and used. That’s why we’ve introduced cutting-edge tools for people to control how their data is used to inform the ads they see. “

– CNBC’s Ryan Browne contributed to this story.