UK's New Rules for Big Tech Could Lead to Eye-Watering Fines

The UK government on Friday set out its plans to regulate the power of big tech, including warnings of huge fines for those that break the rules.

Companies, including Silicon Valley tech giants, will be forced to abide by "fair-play rules" meant to prevent them using their size and ubiquity from excluding smaller players from entering and competing for people's money, time and attention. Rules include preventing companies from preinstalling their own products on devices and ensuring that it's easy for people to swap between mobile operating systems. Trust and transparency rules will also require search engines to inform businesses of algorithm changes that could impact them.

"The customer is always right but sometimes they don't get a choice," said Consumer Minister Paul Scully in a statement. "We'll stop companies from using their power to harm customers, whether they're limiting shoppers' choices to certain software on their devices or making it hard for people to decide how their data is used."

A newly established Digital Markets Unit, sitting inside the country's competition regulator, will have the power to rein in big tech and issue fines of up to 10% of global annual revenue. For the biggest tech companies, the fines could easily stretch into tens of millions of dollars -- especially as the regulator will have the power to add an additional 5% onto the penalty for each day an offense continues.

The UK is far from alone in striving to ensure tech's biggest names don't abuse their power in a way that's detrimental to users. Over the past two months, the European Union has agreed on revised legislation on the regulation of digital markets and social media platforms. Similar conversations are underway in the US, but the EU has an established track record of pursuing antitrust cases against big tech cases that have shaped the conversation about regulation globally. Following the UK's departure from the EU in January 2020, the country has had to decide how it will regulate big tech all on its own.

It first laid out its plans to create a dedicated regulator for big tech in 2019, with Friday's announcement detailing its latest steps. But the questions of when the DMU will gain the power to distribute the fines, and how it will do so, remain unanswered for now. In a press release, the government simply said it will "introduce legislation to put the Digital Markets Unit on a statutory footing in due course."

The rules also include measures to ensure publishers are paid fairly for news content. In the case of disputes, the DMU will have powers to step in and make the final call. In a separate announcement today, the Competition and Markets Authority published code of conduct advice for platforms and publishers, drawn up together with media watchdog Ofcom. The DMU's role, said Andrea Coscelli, chief executive of the CMA, will be to create a "level playing field" between platforms and publishers.

"Having a wide range of news sources and opinions is the cornerstone of our democracy, values and society," added Ofcom CEO Melanie Dawes. "Today marks an important step towards securing a fair outcome in the relationship between online platforms and news publishers."