Britain’s proposed regulation of Big Tech must not be weakened, US economist warns

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The UK risks disrupting the “careful balance” of its proposed legislation to regulate Big Tech platforms if it pursues changes sought by the industry, a former Obama adviser has warned Rishi Sunak.

Economist Jason Furman, along with other high-profile academics who were part of an official UK digital competition panel in 2018, issued the warning in a letter sent to the prime minister on Thursday.

The letter, provided to the Financial Times, came after reports that the government might water down the proposed Digital Markets, Competition and Consumers Bill making its way through parliament.

The bill is set to give a new tech regulator the power to set radical rules for groups such as Meta and Alphabet, and to impose hefty fines for violations.

The tech industry, including Apple and Microsoft, have lobbied the government for changes to the bill that would make it easier to appeal against the regulator’s decisions.

The letter said that Sunak was giving “serious consideration to possible changes to the legislation” requested by the tech industry.

It did not specify which changes but warned Sunak against allowing “big tech platforms to escape effective regulation by entangling the regulator in a web of tactical and adversarial litigation and delay”.

“What we need is a UK regulator that can get ahead of competition problems in digital markets and work participatively and nimbly with all interested parties,” the letter said.

The bill was introduced to parliament in April after Furman carried out a government-commissioned review, published in 2019, which concluded that tech giants were using their dominance to stifle competition and boost profits.

The letter to Sunak this week was also signed by academics who contributed to that report, including Philip Marsden, a professor at the College of Europe in Bruges.

The UK tech sector is valued at around $1tn and the government is keen to remain attractive for investment in the space, which includes Big Tech.

The letter adds to a growing chorus of concerns being raised with government after reports that Big Tech firms were seeking amendments to the bill to make it easier for them to appeal against enforcement decisions. Baroness Tina Stowell, chair of the House of Lords communications and digital committee, also wrote to Sunak this week calling for him to uphold the draft legislation on appeals.

The Competition and Markets Authority will regulate the industry through a new digital markets unit. This was set up in 2021, but until the legislation is passed it cannot set rules or issue fines.

Under the current proposals, companies can use a judicial review to challenge decisions. Judicial reviews assess only the process and legal basis for a decision, not the merits.

The tech industry is seeking to widen the appeals options to allow decisions to be challenged on the merit of the underlying enforcement action.

The CMA declined to comment on the letter or any proposed changes.

The Department for Science, Innovation and Technology said the bill “will drive innovation, grow the economy and deliver better outcomes for consumers”.

 “We will continue to work closely and engage with regulators as we bring forward this bill,” it added.

Additional reporting by Kate Beioley