A new U.K. government report has found that big tech companies — like Amazon, Google, and Facebook — are in need of some serious new antitrust rules.
Commissioned by Britain’s finance minister, the Digital Competition Expert Panel’s report pushes back against the idea that digital platforms produce “natural monopolies.”
Instead, the report points out how big tech companies are stifling competition and innovation, calling for the U.K.’s laws to be “updated for the digital age” because competition among digital platforms is “not only necessary but also possible.”
Jason Furman, former chief economic advisor to Barack Obama, chaired the group behind the report. He told CNBC, “The digital sector has created substantial benefits but these have come at the cost of increasing dominance of the few companies which is limiting competition and consumer choice and innovation.”
Take some of the recent mergers in big tech as an example — Amazon now owns WholeFoods plus Facebook acquired both Instagram and Whatsapp.
The report specifically notes the anti-competitive nature of these mergers, stating, “It appears that some of these acquisitions have been of platforms and other companies that could have provided much-needed competition in these concentrated markets.”
The report says a new “digital market unit” should be established to put pro-competition rules in place and have the power to enforce them. It also calls for data mobility, allowing people to switch between platforms with ease. That means big companies would have to share users’ personal data with competitors.
“These pro-competition tools offer a better, more targeted, more pro-business and pro-consumer solution to fostering competition in digital markets than one based upon changing antitrust law to drive breakup or structural separation of dominant businesses,” the report said.
This report is coming on the back of a wave of people across Europe looking at big tech companies with a new level of scrutiny. Last year, the European Commission hit Google with a record $5 million fine for antitrust violations, as reported by The Verge. Last week, France introduced a 3 percent digital tax specifically aimed at big tech.
The report also proposed a “code of conduct” for companies, which worries some. TechUK, which represents more than 900 tech companies, said it would need more details on that kind of code.
“Bad regulation can be as big a barrier to competition and innovation as monopolistic activities,” TechUk’s CEO Julian David said, according to Reuters. “The UK must remain a welcoming place for digital business from around the world, and ensure that the UK competition and wider regulatory framework is not in conflict with the other leading digital economics with which we must compete.”
Watching European countries develop regulations is important, because they serve as inspiration for the United States. The celebrated California Consumer Protection Act is modeled off the EU’s General Data Protection Regulation, for example.
As Congress begins looking into a federal data privacy law, what happens around the world can definitely impact the laws made here.