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Summary
- UK to introduce new regime requiring tech companies to pay for using content.
- This pro-competitive intervention by CMA will handle issues like lack of data control and monopolistic practices reducing innovation.
Big Tech giants including Google and Amazon are expected to face a series of antitrust investigations this year by the CMA (Competition and Markets Authority), UK’s competition watchdog. This move is seen as a sign of closer scrutiny of practices of global tech firms.
In a latest development, Silicon Valley businesses including internet companies would have to comply with the regime regulated by newly formed UK Digital Markets Unit (DMU) that reports to CMA. DMU has been authorized to impose fines and police the tech giants.
Under the new regime, a code based on “fair trading, trust and transparency” would be imposed on the tech giants to ensure that publishers are treated fairly by them. Notably, tech companies such as Google and Facebook reproduce content such as excerpts, headlines or preview images as they usually forge commercial deals for the same.
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Earlier this month, social media giant, Facebook paused the sharing and publishing of news content in Australia as the company reciprocated to a proposed media law, which pushes the tech titan to pay the publishers and content creators for using their content. The new media laws would push the global tech titans to negotiate with content creators/ publishers over payment for using their content.
Also read: Will Facebook Block News in Canada After Australia?
Need for DMU
In recent times, the conventional media industry has been witnessing shrinking readership base and is struggling to cope up with modern day digital platforms due to paucity of funds. Thus, CMA sensed a potential threat to competition by the global tech titans.
Under the new regime, firms like Facebook and Google would have to provide publishers with more choice, control over data and pay them appropriately. The new regime has been set up by CMA to ensure consumers and small businesses are not at a disadvantage by increased dominance of tech giants.
In the pandemic led environment, the reliance on these tech titans has increased manifolds as they brought huge benefits for businesses and society. Their services helped people remain indoors throughout the lockdowns. Millions of businesses are joining forces with these tech giants for promoting their content or products.
However, the flip side was that the concentration of power lied with the tech titans. These tech giants can control the use of content and have access to zillion amounts of user data. The increased amount of reliance on them could reduce innovation in the long run and harm the consumers of their services.
The new code is expected to set clear expectations for both, tech titans and consumers. The tech giants are expected to be transparent about the services they provide and vigilant about the use of consumer’s data under the new code.
The Tech companies often tend to escape the legal & taxation framework of nations as their scale of operations which transcend geographical boundaries. For instance, Google Inc was recently accused by the US justice department for unlawfully maintaining its dominant position in search & advertising. Also, Facebook’s founder, Mark Zuckerberg hinted towards pulling out of operations from the UK in December. The idea of the new regimen should be to ensure proportionate legislation that encourages collaborative working and innovation.
