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Summary
- UK digital minister warned having very grave concerns about Facebook’s plans to develop end-to-end encryption throughout its communications.
- British government has planned to set up a new Digital Markets Unit under CMA to better regulate competitive practices in the technology space.
The UK government has raised serious concerns about Facebook’s plans to expand end-to-end encryption to all its personal user communications. UK’s Digital minister Oliver Dowden said that such a medium can be a means to facilitate child abuse and the government might need to take protective measures before such a step is implemented. Dowden and UK home secretary Priti Patel are going to talk to the Facebook about encryption. However, the forthcoming Online Safety Bill will not contain any legislative changes in this regard, he clarified.
Facebook stock (NYSE:FB) closed at US $264.90 on the New York Stock Exchange on 10 March, marginally down 0.84 per cent from the previous day’s close.
Mark Zuckerberg, founder, Facebook has said that he would expand encryption messages from WhatsApp to all its other apps like Instagram and Messenger by default. Under the expansion, while these individual services would be operating as stand-alone apps, but their underlying technical infrastructure will get unified. This decision has drawn criticism from the UK, US and Australian justice offices by raising concerns regarding security, privacy and antitrust.
New tech regulations on cards
The UK government is currently trying to control the power of big tech firms to ensure a level-playing field for smaller firms and bring in fair market practices. It has planned to set up a new Digital Markets Unit (DMU) later this year under the Competition and Markets Authority (CMA). The new tech regulator shall write and enforce a new code of practice on technology firms, setting the limits to an acceptable behaviour. It will also have power to impose fines on internet companies.
While digital platforms like Facebook and Google made significant contribution to economic growth, but any monopolistic practices by big players can lead to lower innovation and limit consumer choices in the long run, said British cabinet minister Alok Sharma.
Monopolistic practices under lens
It is expected that DMU will scrutinise acquisitions undertaken by big tech firms such as Amazon, Apple, Facebook, Google, and Microsoft. Government data indicated that these five firms made close to 400 acquisitions between 2008 and 2018, but only few of them were reviewed by the CMA.
The size of big players can be gauged from the fact that Google controls 90 per cent of UK search revenues while Facebook dominates over 50 per cent of the UK digital display ad market. Worried over stricter rules, Zuckerberg had threatened to pull his company’s investment from Britain in December, if the UK government did not soften its stance on regulating Silicon Valley firms.
Another CMA investigation is going to consider if Apple holds dominant position with regards to the distribution of apps on its devices across Britain. It will check if the iPhone maker was imposing unfair terms on developers using its App Store, limiting user choices in return.
Apple shares (NASDAQ:AAPL) closed at a price of US $119.98, down 1.1 per cent while the Google shares (NASDAQ: GOOG) were lower by 4.17 per cent at US $2,036.19 on 10 March.
