Google and Facebook to be scrutinized by new U.K. unit from next year

London – Britain said on Friday that a new government unit would work to deal with ongoing concerns about the concentration of power among a small number of tech giants.

The Department of Digital, Culture, Media and Sports said it plans to create a Digital Market Unit (DMU) to implement a new code to control the behavior of the platform that currently dominates markets such as Google and Facebook is.

The government said that the code has been designed to ensure that consumers, small businesses and news publishers will not be denied the work done by tech giants.

Under the new code, some of the world’s largest technology companies may have to be more transparent about the services they provide and how they use consumers’ data. They may be forced to give consumers an option to receive personalized advertising, and will not be able to ban customers that make it difficult for them to use rival platforms.

The DMU, ​​which will be part of the Competition and Markets Authority (CMA), will start operations in April 2021.

The government said that DMUs can be given the power to suspend, block and reverse decisions taken by large technology companies. The DMU may also order them to take some action to comply with the code, and impose financial penalties for non-compliance, the government said.

“I am without any pro-tech and the services of digital platforms are changing the economy positively – bringing huge benefits for businesses, consumers and society,” Digital Secretary Oliver Dowden said in a statement.

“But there is growing consensus in the UK and abroad that the concentration of power among a small number of tech companies is reducing the growth of the sector, reducing innovation and negatively impacting people and businesses who are Rely on. It’s time to find out. Dowden said to usher in a new era of technological development.

In July, the CMA called on the government to give it more powers and set up a DMU, ​​stating that it was necessary to rein in large advertising platforms. The regulator said it was concerned about how tech giants like Google and Facebook use digital advertising to fuel their business models.

Although the CMA’s recommendations had a domestic focus, the watchdog said the problems identified were “international in nature” and that it focused on “playing a leading role globally” as part of their digital strategy Will give.

CMA Chief Executive Officer Andrea Coskelli said on July 1, “Through our examination of this market, we have explored how major online platforms such as Google and Facebook operate and they use digital to fuel their business models.” How to use advertising. ” It has been found that if the market power of these companies becomes uncontrolled, people and businesses will cease. “

“Advertisers today choose from a wide variety of platforms that compete with each to deliver the most effective and innovative advertising formats and products,” said Ronan Harris, Google’s vice president for the UK and Ireland in a statement at the time.

He said: “We support regulation that benefits people, businesses and society and we will continue to work constructively with regulatory authorities and the government on these important areas so that everyone can get the most out of the web.”

Facebook previously said it would “engage with UK government bodies on regulations that protect consumers and help rebuild small businesses as the British economy” recovers from the coronovirus epidemic. “

A spokesperson for the company said in a statement on July 1, “We are facing significant competition from new entrants such as Google, Apple, Snap, Twitter and Amazon as well as TikTok, which keeps us on our toes is.” People control how their data is collected and used, which is why we have introduced industry-leading tools to control how people use their data How to notify advertisements. “

– CNBC’s Ryan Brown contributed to this story.