Tech giants ‘do not face enough competition – reducing consumer choice and innovation’

UK competition rules should be overhauled to tackle the dominance of technology giants like Facebook, Google and Amazon, and increase consumer choice, a Government-commissioned review has said.

A ‘Digital Markets Unit’ with expertise in the sector should be set up and innovation should be encouraged by giving people control over their own data so they could switch between rival services and platforms easily. Smaller companies should also have access to the data that social media platforms hold on their users, the review recommended.

Big technology companies have been criticised by politicians in the United States and in Europe in recent years over issues ranging from Facebook losing track of users’ data to how Google ranks the results of searches. France, Italy, Britain and Spain have also proposed new digital taxes to narrow loopholes that allow large multinational firms to cut tax bills.

Jason Furman, Professor of Practice at Harvard Kennedy School, who chaired the review, said the digital sector had created substantial benefits but they had come at the cost of the increasing dominance of a few companies.

“My panel is outlining a balanced proposal to give people more control over their data, give small businesses more of a chance to enter and thrive, and create more predictability for the large digital companies,” he said. “These recommendations will deliver an economic boost driven by UK tech start-ups and innovation that will give consumers greater choice and protection.”

Philip Hammond, the Chancellor of the Exchequer said he would set out Government measures later this year to ensure digital markets are competitive.

“The UK leads the world in embracing technology and the opportunities it delivers for people. Competition is fundamental to ensuring the market works in the interest of consumers, but we know some tech giants are still accumulating too much power, preventing smaller businesses from entering the market,” he said.

“The work of Jason Furman and the expert panel is invaluable in ensuring we’re at the forefront of delivering a competitive digital marketplace. I will carefully examine the proposals put forward by the panel before responding later this year, setting out how the Government will implement the changes needed to ensure our digital markets are competitive and consumers get the level of choice they deserve.”

TechUK, which represents more than 900 tech companies that collectively employ 700,000 people, said the report contained some positive suggestions, but it needed further detail on what any proposed code of conduct for big tech might look like. It also said there had to be a full assessment of the risks and benefits of opening up data sets.

“Bad regulation can be as big a barrier to competition and innovation as monopolistic activities,” said Julian David, TechUK’s chief executive. “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 economies with which we must compete.”