Zach Gibson/Getty Images
show image

Review calls for tougher competition laws to crack down on tech giants’ “bullying tactics”

The government should strengthen competition laws in order to crack down on the “bullying tactics” of US tech giants, a landmark review has concluded.

Under the plans, drawn up by former US economic advisor Jason Furman, Silicon Valley firms would be forced to hand back to users control of their data, to make it easier to switch between platforms.

The review also recommends the government should set up a new digital markets unit staffed by specialists in technology, economics and behavioural science and backed up by legal powers.

But speaking to journalists on Tuesday ahead of the report’s publication, Furman said the committee of experts had ruled out calling for the tech giants to be broken up.

“I don’t think there’s any reason that we need to do that,” he said. “Our approach is all about preserving the good, avoiding large unintended consequences while getting more of that potential and trying to strike that balance was the whole goal here.”

Silicon Valley is facing growing pressure from politicians and regulators in light of last year’s Cambridge Analytica scandal and fears over the market dominance of firms such as Google, Facebook, Amazon and Apple.

The US Democratic presidential candidate Elizabeth Warren has called for the four firms to be broken up. Under her plans, Facebook would be forced to jettison Instagram and WhatsApp, while Google, Apple and Amazon would have to spin out marketplaces in which they sell their own products.

Facebook faced a barrage of criticism earlier this week after removing and then reinstating ads posted by Warren calling for the social media giant to be broken up. Warren tweeted: “Curious why I think FB has too much power? Let’s start with their ability to shut down a debate over whether FB has too much power.”

In addition to launching a new digital markets unit, the government should create a code of conduct for competition and strengthen regulators’ existing powers for tackling anti-competitive practices, the review stated. The Competition and Markets Authority should have the power to stop mergers which could quash competition, for example.

“The UK leads the world in embracing technology and the opportunities it delivers for people,” said the chancellor Philip Hammond. “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 added: “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 CEO of TechUK, Julian David, said: “While the report contains some positive suggestions, significant further detail is needed on what a proposed code of conduct might look like. Equally, there must be a full assessment of the risks and benefits of requiring companies to open up data sets. Such issues raise important questions around the protection of personal data which may not easily be overcome.”