The US Justice Department recently sued Google accusing it of illegally abusing a monopoly on digital advertising technologies. Europe will move fast to name the gatekeepers subject to its new Digital Markets Act in later 2023. And now, the UK is preparing a Digital Markets Competition and Consumer Bill.
Andrea Coscelli, former chief executive of the UK’s Competition and Markets Authority, argues that the upcoming UK reform will be more flexible than the European rules. His interview with EURACTIV has been edited for length and clarity.
Question: The Digital Markets Competition and Consumer Bill is expected to be introduced to Parliament this spring, meaning it could be in place before the end of the year. Andrea, could you give us a brief overview of the bill?
AC: The bill essentially does three things. It sets up the UK’s first digital regulatory framework. Second, it upgrades the powers of competition market authorities, and third, it changes quite substantially the UK consumer protection enforcement laws.
Question: How significant of a shift does this represent in terms of tech regulation?
AC: The Competition and Markets Authority has been addressing the issues in tech using the powers given to it by parliament almost 20 to 25 years ago. Obviously, at that time, there was very little in terms of digital activity.
This draft bill essentially reflects discussions and reports that have been published over the past three or four years in the UK, discussions in the European Union, and several other jurisdictions. There would be significant new powers given to a new Digital Markets unit and the legal power to regulate a handful of companies with strategic market status.
Question: The bill also contains some significant updates on consumer law. Could you tell us what it could mean for online platforms?
AC: The current consumer protection regime in the UK was conceived at a time when the economy was analogue. At the time, Parliament didn’t give the Office of Fair Trading (which then became the Competition and Markets Authority) the power, for instance, to levy fines against companies.
When firms engage in problematic and potentially illegal practices but don’t cause direct financial harm to consumers, it is very difficult to think in terms of redress. For example, we struggled to address the problem of fake reviews because we were unable able to levy fines, so these platforms regarded these investigations as less of a priority.
That’s why the Competition and Markets Authority has asked the government for upgraded powers.
Question: How do you compare what the EU has done in their Digital Markets Act?
AC: There are strong parallels. The two sets of reforms are trying to address similar problems. The discussion in the European Union right now is about the implementation of existing law. In the UK, we are still waiting for a draft bill, so essentially the UK is now behind what’s happening in Europe.
The UK plans to give significant powers are given to the Digital Markets Unit to work through codes of conduct monitoring markets. There is a lot of room for significant exchanges between the companies, the regulator, third parties, and litigation, so there is the benefit of flexibility.
The risk in the UK is that the new system starts feeling too much like the competition cases and potentially takes too long. The choice in the European Union was to go for something which is more rigid, and potentially more difficult to upgrade over time as things change. But has the benefit of quick and effective implementation.
Question: The British framework will be tailored to the firms that have been deemed to have strategic market status – while under the Digital Markets Act, gatekeeper platforms will be subject to standardized obligations. Why is the UK taking this approach?
AC: We felt this targeted approach will be able to change over time as technologies and our understanding of the issues change. The institutional framework in the EU made it less attractive to design a system with a sizeable regulator engaged in extensive conversations on codes of conduct.
Implementation will be key. All of this is a bit of an experiment. This is the first time that something like this is happening on a global scale. I think other jurisdictions outside of Europe will go down similar routes. Look at what’s going to happen in the United States in the next few years in terms of litigation on a number of big cases, and potential legislation.
Molly Killeen is a Brussels-based tech reporter for EURACTIV.com. Romy Hermans, an intern with the Center for European Policy Analysis in Brussels, transcribed and edited the interview
This article was originally published by EURACTIV. EURACTIV is an independent pan-European media network specialized in EU affairs including government, business, and civil society.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.