2 min

The UK government plans to put in place a Digital Markets Unit (DMU) whose sole focus will be the regulation of online platforms. It might also have the power to block business moves by companies that show anti-competitive behavior. The unit will also be able to hand down fines to violators.

The announcement was made last week, with the expectation being that the unit will be operational by April 2021.

The Digital Markets Unit is being introduced after the Competition and Markets Authority, the UK’s antitrust watchdog, proposed creating a new regulatory framework earlier this year to govern the most prominent online platform operators.

An antitrust angle

The watchdog said that the existing laws are not suitable for effective regulation to take place. The DMU will be tasked with ensuring that the online platforms with a lot of market power stick to the regulatory code of conduct undergoing implementation.

The code of conduct may mandate that companies like Facebook give their users the option to opt out of microtargeting (personalized ads). Tech giants may also be forced to tell their consumers what they plan to do with the data that they collect.

If any tech firms fail to comply with the code of conduct, the DMU will levy fines and order the company to change its practices to adhere to the regulation.

Protecting the future

It is not immediately clear what tasks the DMU will have and how far its power will extend. However, it is a move in the right direction, to find a way to protect consumers and other organizations trying to compete in the same space that these tech giants exist.

The digital platforms may make significant contributions to the economy, but a few companies’ dominance leads to less innovation, higher prices, and less choice for consumers.

Tip: Should Europe compete for technological world domination?