On Tuesday 27 June, PICTFOR hosted their event, The Implication of the Digital Markets, Competition, and Consumers Bill, which explored what wide-ranging reforms would mean for the tech industry.
The virtual roundtable featured insights from Will Hayter, CMA’s Senior Director, Digital Markets Unit, Lord Clement-Jones, Liberal Democrat House of Lords spokesperson for Science Innovation and Technology, Katie Eyton, Chief Ethics and Compliance Officer at Omnicom Media Group UK, and Professor Tommaso Valletti, Head of the Department of Economics & Public Policy at Imperial College London. The event was chaired by Darren Jones MP, PICTFOR Co-Chair and Chair of the Business and Trade Select Committee.
Darren provided opening remarks before handing over to Will Hayter, Senior Director of the Competition and Markets Authority’s (CMA) Digital Markets Unit (DMU). Will began by highlighting that the DMCC Bill must be evidence based. He shared that the CMA’s intention is to make the application of the Bill participative rather than adversarial. The DMU, he argued, needs to be highly accountable through the CMA and traditional scrutiny. He also acknowledged that the DMU might not operate perfectly at first and that its initial application should be a learning process.
The Chair then passed over to Lord Clement-Jones, Liberal Democrat House of Lords spokesperson for Science Innovation and Technology. Lord Clement-Jones started by sharing that he was pleased that the Bill has come so far. He added that it has been interesting to see the evidence the big tech companies have been giving to the Lords. He argued that big tech companies do have power in key markets and hoped that the DMCC Bill will counteract this power. He argued in favour of a flexible approach to designation of businesses as having Strategic Market Status (SMS), while suggesting that the time taken to designate SMS may need to decline. Lord Clement-Jones added that ex-ante and interim powers should be to be granted to the regulator. He also noted some areas of concern, arguing that the Bill must move faster, and advocating for provisions for the high court to get interim injunctions to stop anti-competitive actions. He also said that the CMA should be given the power to arbitrate on pricing.
Darren then introduced Katie Eyton, Chief Ethics and Compliance Officer at Omnicom Media Group UK. Katie began by detailing Omnicom’s work helping businesses understand target audiences and locations for their advertising. She noted that the majority of advertising budget is spent by big tech and detailed the kinds of data collected by advertisers. Katie argued that large platforms hold a major digital advantage through their data tracking methods as they receive data both from themselves and from third party companies. This offers value to consumers and advertisers but makes it difficult for smaller companies to break into the market. She suggested that the current drafting of the DMCC Bill introduces an element of uncertainty, for example by asking the regulator to consider what a company may look like in a few years’ time. She noted that larger companies could use their legal resources to delay the SMS designation process for years to protect their current market status.
The Chair then passed over to Professor Tommaso Valletti, Head of the Department of Economics & Public Policy at Imperial College London. Tommaso started by suggesting that, from an economics perspective, the DMCC Bill makes a lot of sense in principle. He said that unregulated market forces are not expected to work in this kind of market and that we are working with de-facto monopolies right now. He noted that there is also a political problem caused by the current system as monopoly is poor for democracy, and having core sectors of the UK controlled by US tech giants is not ideal. He said that the pandemic also proved the dangers of economies becoming reliant on a few bottlenecks and noted that monopoly is anti-resilient. This Bill, he argued, is trying to give competition a chance. In terms of implementation, Tommaso argued redrafting should be done on the forward-looking element of SMS designation, which is open to delay. Also, a concern was that there are too many consultations, and checks and balances. He argued that, in an ideal world, SMS status would be designated on a case-by-case basis, but we don’t have the resources. He suggested that, in this case, the resources of the CMA and DMU might not be up to the task of enforcement as the CMA, while effective, is contending with companies with huge market capitalisations. He argued that international conversation is important as a global problem like an uneven tech market needs a global solution. He also said that entrepreneurs should be able to input in the drafting process of the Bill.
The Chair then opened the session for discussion. Will Stewart, from the Institute of Electrical and Electronics Engineers, moved the discussion onto the global borderless nature of digital markets, asking whether this helpful or unhelpful for the consumer. Saoirse Purtill, from the Authors’ Licensing & Collecting Society discussed how the Bill’s final offer mechanism will work in practice. Stephen Tulip from ACT, The App Assocation, then moved the conversation on to the details of small companies being acquired by large tech firms. Darren Jones MP, then asked whether political focus should be directed more towards consumer protections at some point. Lord Clement-Jones concurred, suggested that he would prefer more attention being placed on alternative dispute resolution. The Chair then brought the session to a close.
PICTFOR would like to thank our Parliamentary, Civil Service, Academic and Industry speakers, as well as those who brought their insightful questions to the discussion.