Tech giants around the world could face multibillion-pound fines if they breach rules designed to protect consumers and businesses from the UK’s new regulator.
The Digital Markets Unit (DMU) has been established to monitor and contain the actions of top tech businesses to prevent harm from being done to smaller businesses and give consumers greater control over their data.
New legislation is being introduced to underpin the DMU’s powers, which include limiting ‘predatory practices’ used to damage smaller enterprises.
Established last year, this new unit operates alongside the UK’s competition watchdog, the Competition and Markets Authority (CMA), to enforce new codes of conduct for the biggest tech firms active in the UK.
The creation of the DMU will see several new rules enforced, including making it easier for smartphone users to choose which search engines they use and giving consumers the option to opt-out of targeted advertising.
Consumer Minister, Paul Scully said: “The customer is always right, but sometimes they don’t get a choice. We’ll stop companies from using their power to harm customers, whether they’re limiting shoppers’ choices to certain software on their devices or making it hard for people to decide how their data is used.”
As part of its new powers, the DMU will require tech companies to inform businesses of significant changes that would affect them, such as adjustments to algorithms that send traffic to other websites.
To further limit the power of the likes of Google, Apple and Meta, app developers will also be able to sell their apps on fairer and more transparent terms via these popular platforms.
This could help the UK’s fast-growing tech firms get a better start when working with larger platforms to create new apps and systems.
Those tech businesses that do not comply with the DMU and its rules could face fines of up to 10 per cent of their global turnover, or five per cent of daily global turnover for each day that an offence continues.
Andrea Coscelli, the Chief Executive of the CMA, said: “The CMA welcomes these proposals and we’re pleased that the government has taken forward a number of our recommendations that will allow the DMU to oversee an effective and robust digital markets regime in the UK,”
The DMU’s focus is very much on the larger side of the tech sector and should, if effective, open up new opportunities to developers and smaller tech firms.
If you need assistance with tax, accounting or business advice for your tech firm, please speak to us.