Latest News

UK Weighs New Regulatory Unit To Police Tech Firms

Britain’s top antitrust regulator proposed Friday (Oct. 9) that the country contemplate creating a new regulatory unit whose approval would be required before any dominant technology company could make an acquisition in the country.

Andrea Coscelli, chief executive of the Competition and Markets Authority (CMA), noted in a 3,000-word speech delivered digitally from London to a virtual Fordham University event that a year-long examination already established that Google and Facebook have enormous advertising-market power in England.

But even proposed remedies already being considered, such as increasing government watchdog powers over the companies, may not be enough, he said in his virtual keynote speech to the Fordham Competition Law Institute conference. “We are also considering a third pillar which would form part of the new (pro-competition) regime — a parallel merger regime for acquisitions by companies with Strategic Market Status. We are considering whether the evidence supports a policy justification for such a regime, based on the particular features of digital markets that increase the risks of consumer harm arising from acquisitions by particularly powerful companies, and the heightened risks of under-enforcement. In particular, we are analyzing the extent to which such concerns cannot be fully addressed under the standard mergers regime.”

Any new regulatory entity, he said, would have “its own jurisdictional and substantive tests,” and “companies subject to the special regime could be required to notify all transactions to the CMA, subject to certain limited exemptions.”

Concerns regarding competition “could be assessed under the standard ‘substantial lessening of competition’ test. However, the inherent uncertainty that often characterizes developments in these digital markets, combined with the increased risks of consumer harm where the acquirer already has Strategic Market Status, may justify the use of a more cautious standard of proof than the ‘balance of probabilities’ threshold under the standard regime.”

In addition to addressing competition concerns, he said, the new unit could also assess other issues such as data protection.

Coscelli said the U.K.’s approach to regulating FinTech companies could offer insights into the best ways to increase regulation of Big Tech firms.

“It means not being afraid to try using new tools and approaches. Our work on Open Banking, for example, has demonstrated the potential that opening up access to data can have in driving innovation,” he said. “Just last week we announced that users of products enabled by Open Banking topped 2 million — demonstrating clear demand for these services which have been enabled by this intervention.”

The U.K.’s move to consider more stringent regulation of tech mergers comes as a recent European Union settlement with chip-maker Broadcom has some technology industry watchers fearing that Europe, and potentially the U.K., may be entering an era of more robust regulation.

In the United States, the largest technology companies are fighting new calls from lawmakers who want them broken up. Earlier this week, the House Judiciary Committee joined the chorus.

Also in Friday’s speech, Coscelli said the CMA is following up on last year’s crackdown on fake product review operations with an ongoing examination of companies that have such reviews on their eCommerce sites.

“We have taken this work into a second phase and are now investigating a number of major websites to consider whether they are doing enough to protect consumers from reading fake reviews on their sites,” he said. “We’ve involved our expanding team of data and behavioral specialists in this work, helping to identify key patterns of behavior and likely indicators of fake content. We’ll be holding these businesses to account if we discover that they are not effectively policing their sites or addressing loopholes that allow fake reviews to appear.”

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News