Minister defends digital economy legislation before Lords

UK method to regulating digital markets “superior” to that of European Union (EU), which “runs the risk of stifling innovation”, digital minister Chris Philp tells Lords committee.

The EU is at the moment within the technique of concurrently introducing each a Digital Markets Act (DMA, which can introduce new competitors guidelines for digital firms) and a Digital Services Act (DSA, which can introduce new guidelines on web security).

Although the UK is trying create comparable legislation – by organising a Digital Markets Unit (DMU) inside a pro-competition legislative framework and introducing a separate Online Safety Bill (OSB) – the Lords expressed concern that it was falling behind its European neighbours.

Addressing the House of Lords Communications and Digital Committee in regards to the authorities’s forthcoming pro-competition regime for digital markets, Philp stated “what we believe, strongly, is the superiority of the approach that we’re taking here compared to the European one”.

“We think our approach is more flexible, it’s more proportionate, it will better enable innovation, it’ll avoid the risk of squashing developing tech businesses,” he added. “We think it’s better than the EU approach, which runs the risk of stifling innovation being rather blunt in its approach.”

He stated that the UK’s method is “more pro-innovation, more pro-growth” and that “we are keen to get it onto the statute books as quickly as possible”.

However, whereas the EU is nearing the adoption of each its DMA and DSA, the UK authorities has not but even launched its DMU legislation to Parliament, and its OSB remains to be present process pre-legislative scrutiny in its draft kind.

According to the UK Competition and Market Authority’s (CMA) digital markets strategy (printed early February 2021), the DMU will “oversee and enforce the new pro-competition regime for digital firms with Strategic Market Status [SMS]”, which is predicted to incorporate the likes of Facebook, Google, Amazon and Apple.

Although the DMU has already begun its work on creating legally binding codes of conduct to forestall anti-competitive behaviour in digital markets, it’s at the moment working in a restricted capability and won’t be able to take motion in opposition to tech firms till legislation has been authorised to formally set up its oversight powers.

On bringing the payments before Parliament, Philp stated that whereas the OSB will likely be launched before the tip of the present session, he didn’t have a sign of when the DMU guidelines could be launched, as there may be at the moment no cross-government settlement on a legislative timetable.

“The government has to look at parliamentary time and things like OPC [Office of the Parliamentary Counsel] capacity…so it’s simply a question of prioritising among different departments the various bills they want to take forward. DCMS are very strongly making the case this needs to be done as quickly as possible,” he stated.

A consultation on the pro-competition regime was opened in July 2021, however the authorities has but to problem a proper response. Philp informed Lords that the federal government would publish its response to the session in “the fairly near” future.

Citing the CMA’s July 2020 market study – which discovered {that a} lack of competitors all through the UK’s digital markets was stopping customers from accessing new companies and leading to direct hurt to smaller companies – Philp added that firms, significantly Google and Facebook, do have the facility to take motion to deal with the problems within the digital economy.

“I would strongly urge them to do so, it certainly isn’t too late. But I do take the view in this area, as with online safety, that where there is evidence that they are not taking appropriate action to remedy the mischief – and as far as I can see, they are not – then legislative intervention and regulatory intervention is both desirable and, in fact, necessary,” he stated.