14 March 2019

Tech giants need more competition

Independent panel of experts calls for UK competition rules to be updated for the digital age.

Tech giants have become increasingly dominant and ministers must open the market up to increase consumer choice and give people greater control over their data, an independent review has reported.

Can do better

Harvard Professor Jason Furman has warned that UK competition rules must be updated to be fit for the digital age. He cited the benefits brought by technology firms but said the rules needed to evolve to keep pace with the market. Professor Furman urged the government to increase competition in the digital sector by setting up a new competition unit and strengthening outdated laws. He believes more companies would then be able to join the market on a more equal-footing, ushering in a new wave of innovation and the creation of new social media and online search platforms. An independent panel of experts is led by Professor Furman, who was chief economic adviser to president Barack Obama’s White House, and includes professors Diane Coyle, Amelia Fletcher, Derek McAuley and Philip Marsden. Professor Jason Furman, chair of the independent review of competition in the digital sector, said ‘the digital sector has created substantial benefits but these have come at the cost of increasing dominance of a few companies which is limiting competition and consumer choice and innovation. Some say this is inevitable or even desirable. I think the UK can do better.’


The following recommendations to address this international problem, also positions Britain to lead the world in the technological revolution: a new digital markets unit should be set up with expertise in technology, economics and behavioural science and the legal powers to back it up; the new unit should give people more control over their data by enabling people to switch between platforms more easily; it should also develop a code of conduct so the largest digital companies know the competitive rules of the game; regulators’ existing powers for tackling illegal anti-competitive practices need to be strengthened, making it quicker and simpler to prosecute breaches, such as bullying tactics by market leaders; changes to merger rules are needed so the Competition and Markets Authority (CMA) can better stop digital mergers that are likely to damage future competition, innovation and consumer choice; the CMA should launch a formal market study into the digital advertising market which is dominated by two players and suffers from a lack of transparency; powers to force the largest companies to open up to smaller firms through providing access to key data sets, when doing so does not affect privacy; and, the UK should engage internationally on all of these issues. The panel has made 20 specific recommendations for the government, and the full report can be found here.