UK regulator will have the power to impose heavy fines on Big Tech

UK was established recently Major Technology Regulatory Authority would have broad authority to penalize giant companies it deems anticompetitive. As TechCrunch NoteThe country’s Ministry of Digital, Culture, Media & Sports (DCMS) has disclosure that the Digital Market Unit will have the right to levy fines of up to 10% of a company’s worldwide annual revenue if it fails to comply with its codes of conduct, plus up to 5% of its annual sales. days for each day of continued violation. Companies will also have to make it easier to switch between platforms (such as mobile and social), decouple from default apps (including search), and control multiple than data sharing.

Big Tech will also have to report the acquisition to the Competition and Markets Authority before they close to determine if “further investigation” is needed. DMUs can block acquisitions that are intended to stifle competition, reducing the likelihood that the entity will have to adjust once damage has already occurred. CMA may not dictate Meta undo the acquisition of Giphyas an example.

The moves could require large tech companies to notify smaller companies when they change algorithms that could affect their businesses, DCMS said. For example, Google may have to warn stores if changes will affect search rankings, while Meta may alert media outlets if they less prominent in the Facebook feed. Meanwhile, app creators can also expect “fairer and more transparent terms” for offering their products.

The UK also intends to borrow signals from Australia and Canada by ensuring that news publishers are “fairly paid” for online content. For example, the DMU may intervene to resolve price disputes. While CMA clarify that it would consult with all concerned before implementing the code of conduct, it recognized the need to address the “negligibility imbalance” that allows platforms to Online is the powerful arm of publishers.

The effectiveness of the DMU will depend on the exact codes set and it has not been promised by the authoritative DCMS. It is not yet clear when that will happen. However, if the new promises hold, they could demand sweeping changes from the big tech companies. Apple and Google may have to relax restrictions on apps and operating system defaults, while Amazon and Meta may have to increase transparency and be cautious when changing recommendation algorithms. While global revenue-cutting fines are nothing new, DMU’s maximum penalties are exceptionally high and could leave Big Tech with no choice but to line up.

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