The concentration of power in a small number of tech firms is curtailing growth and reducing innovation, says the UK’s digital secretary.
The United Kingdom will impose a new competition regime next year to prevent Google and Facebook using their dominance to push out smaller firms and disadvantage consumers.
The code will be enforced by a dedicated unit within the Competition and Markets Authority (CMA), which this year said it needed new laws to keep the tech giants in check.
The CMA wants to crack down on internet giants swallowing up smaller firms and is set to issue detailed plans in December.
The advertising revenues that generate profits for Google and Facebook are increasingly coming under antitrust scrutiny, often prompted by complaints from media companies as advertising spending shifts to the web.
Google and Facebook dominate digital advertising, accounting for approximately 80 percent of the 14 billion pounds ($18.7bn) spent in 2019, the CMA said.
The two US companies have said they are committed to working with the British government and regulator on digital advertising, including giving users greater control over their data and the ads they are served.
The growing power of big tech is attracting intense antitrust scrutiny across the globe with the United States stepping up enforcement and the European Union planning to give itself new powers to crack down on so-called “gatekeepers” that can control access to online stores or apps.
The CMA will emerge from the shadow of the European Commission, the region’s main antitrust watchdog, when the UK leaves the EU’s internal market at the end of the year.
“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,” Andrea Coscelli, chief of the CMA, said.
The newly created Digital Markets Unit, which will begin work in April, could be given powers to suspend, block and reverse decisions made by technology firms and to impose financial penalties for non-compliance.
Companies will have to be more transparent about how they use consumer data and restrictions that make it hard to use rival platforms will be banned, the government said, adding that the rules will also support the news industry, rebalancing the relationship between publishers and platforms.
The CMA said on Monday it was assessing whether a complaint about Google technology warranted a formal investigation.
Marketers for an Open Web (MOW), a coalition of technology and publishing companies, said Google was modifying its Chrome browser and Chromium developer tools to give it greater control over publishers and advertisers.
Google said advertising practices needed to adapt to changing expectations about how data was collected and used.