Potential data sharing between tech giants and smaller firms under the UK government’s upcoming digital competition legislation needs to respect people’s privacy and be “reasonable, proportionate [and] necessary to facilitate fair competition”, according to digital minister Chris Philp.
On 6 May 2022, the government announced that it would be giving the Digital Markets Unit (DMU) statutory powers to enforce a “pro-competition” regime under the upcoming Digital Markets, Competition and Consumer Bill.
It said the DMU would be given powers to intervene in the root causes of market dominance, including by being able to force companies with “strategic market status” (expected to include the likes of Meta, Google, Amazon and Apple) to share data with smaller competitors, thereby limiting those larger firms’ competitive advantage.
However, the exact requirements on large tech firms are yet to be defined, which the government has said will happen when the legislation is introduced to Parliament – although there is still no firm timeline for this.
Speaking to members of trade association TechUK on 12 May about the legislation’s direction of travel, Philp clarified that he thinks the forced data sharing will only apply to “specific areas” the DMU has identified as inhibiting competition, and not to the personal information tech giants hold on users.
“It won’t be that Facebook has to hand over their whole database to anyone who asks for it… for a whole number of reasons, not least privacy,” he said. “I think it’ll be targeted, so if the DMU identifies areas where holding data in specific areas is inhibiting competition, then they’ll look to unpick that in a very targeted way.
“In doing that, they’ll have to make sure that it’s reasonable, proportionate [and] necessary to facilitate fair competition, and doesn’t violate privacy, so they’ll just have to consider those questions on a case-by-case basis.”
While Philp did not go into detail on the types of data he envisages tech giants being forced to hand over, he added that the upcoming digital competition legislation would also seek to empower consumers by giving them more choice over whether they are subject to the surveillance-based business models of many of the firms with strategic market status.
“They’ve got these data vaults of everything you’ve ever done, thought or clicked on, and there’s a question about whether there should be user empowerment that lets you better choose whether that happens to you or not,” he said, adding that consumer choice over how their data is used would be a fundamental aspect of the legislation.
Philp further added that, along with compelling interoperability and consumer choice, compelling firms to open up data access would form part of the DMU’s pre-emptive intervention capacities “to prevent dominant market positions becoming problematic in the first place, rather than trying to fix it after the event”.
Neil Ross, associate director for policy at TechUK – which represents more than 850 UK technology businesses – told Computer Weekly “that deciding to open up data from SMS firms would need to be appropriate to any anti-competitive practices that the Digital Markets Unit is seeking to address”.
He added: “A clearer picture of what data may be shared will come out as the formal strategic market status designation process and design of codes of conduct get underway. This will also be informed by the DMU’s requirement to consult with the industry more broadly.”
On which firms will be given strategic market status, Philp said the revenue threshold for being included would be very high so as to only affect the “very biggest firms”, adding he expects there to be “substantially less than 10” companies in the list.
Setting up a new digital markets regulator was one of the recommendations of the March 2019 Furman report, Unlocking digital competition, which said a watchdog should be established with skills across technology, economics and behavioural sciences to lay out “the rules of the game” for companies in the sector.
A later study by the Competition and Markets Authority in July 2020 found that a lack of competition throughout the UK’s digital markets was preventing consumers from accessing new services, as well as resulting in direct harm to smaller businesses.
“We believe the balance of control over consumers’ data is too far in favour of the platforms,” it said. “Consumers value privacy and want control over their data, but many social media platforms do not allow consumers to turn off personalised advertising. Those platforms that do provide a choice use defaults and choice architecture that make it difficult for consumers to exercise this choice.”
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