Chancellor backs calls to curb tech giants' market power

Chancellor of the Exchequer Philip Hammond MP

The chancellor Philip Hammond has hinted that a fresh set of measures aimed at curtailing the corporate power of tech giants such as Facebook and Apple are imminent.

An independent report, commissioned by the chancellor into digital competition across the UK, has just been published ahead of the Spring Statement, which is set to be delivered before Parliament today.

In the 150-page report, a competition expert panel led by Harvard professor Jason Furman has called for a comprehensive upgrade to competition policy and the formation of a pro-competition digital markets unit.

The Competition and Markets Authority (CMA), meanwhile, must take more frequent and firmer action against mergers and acquisitions between tech firms, with a set of refreshed and tougher enforcement powers.

The current landscape, the report also argues, is detrimental to digital startups who are being motivated primarily by the aim of being bought out by a major tech firm, rather than seeking to disrupt the field.

"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," Hammond 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."

The government has responded positively to the findings, with Hammond set to make an initial response in his Spring Statement speech this afternoon, with a concrete set of responses due this summer.

This is in addition to an online harms white paper jointly-devised by the Home Office and the Department for Digital, Culture, Media and Sport, which due to be released before the end of the winter.

The 20 recommendations issued by the independent panel is headlined by the formation of the digital markets unit, which the group says should be filled with sufficient expertise in technology, economics and behavioural science to effectively regulate the market.

The new unit should also give consumers more control over their data by allowing people to switch between platforms more easily.

The CMA should also formally launch a market study into the digital advertising market which is dominated by two players, namely Google and Facebook, and is said to also suffer from a lack of transparency.

"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," chair of the independent review Jason Furman said.

"The Chancellor, Philip Hammond, was right to recognise there is a better way than just continuing with the status quo. 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.

"These recommendations will deliver an economic boost driven by UK tech start-ups and innovation that will give consumers greater choice and protection."

The report follows a host of similar findings from a variety of voices, including a House of Commons select committee and the Labour Party. Both organisations have independently called for a new regulatory regime to govern the growing power of big tech firms, including the formation of an independent regulator for the digital industry.

The findings of the report also largely correlate with a diagnosis set out by presidential hopeful Elizabeth Warren, who over the weekend echoed Labour's calls major tech companies to be "broken up". However, the chancellor is not expected to introduce a remedy as extreme when he sets out the governments position later today.

Keumars Afifi-Sabet

Keumars Afifi-Sabet is a writer and editor that specialises in public sector, cyber security, and cloud computing. He first joined ITPro as a staff writer in April 2018 and eventually became its Features Editor. Although a regular contributor to other tech sites in the past, these days you will find Keumars on LiveScience, where he runs its Technology section.