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March 18, 2019
The Digital Competition Expert Panel was established by the Chancellor in September 2018. The Panel was composed of experts in economics, competition policy, law and computer science. The Panel’s terms of reference were to consider the potential opportunities and challenges the emerging digital economy may pose for competition and pro-competition policy, and to make recommendations on any changes that may be needed. In particular, the Panel was asked to examine:
- the impacts of the emergence of a small number of big players in digital markets such as social media, e-commerce, search, and online advertising;
- appropriate approaches to mergers, takeovers and anti-competitive practices in digital markets;
- opportunities to enhance competition, to increase business innovation and expand consumer choice; and
- how best to assess consumer impacts in ad-funded products and services that are “free” to consumers.
The Panel ran a call for evidence between October and December 2018. It has now published its final report, making recommendations for changes to the UK’s competition framework that are needed to face the economic challenges posed by digital markets, in the UK and internationally:
- a new digital markets unit should be set up with expertise in technology, economics and behavioural science and the legal powers to back it up;
- the new unit should give people more control over their data by enabling people to switch between platforms more easily;
- it should also develop a code of conduct so the largest digital companies know the competitive rules of the game;
- regulators’ existing powers for tackling illegal anti-competitive practices need to be strengthened, making it quicker and simpler to prosecute breaches, such as bullying tactics by market leaders;
- changes to merger rules are needed so the Competition and Markets Authority can better stop digital mergers that are likely to damage future competition, innovation and consumer choice;
- the CMA should launch a formal market study into the digital advertising market which is dominated by two players and suffers from a lack of transparency;
- powers to force the largest companies to open up to smaller firms through providing access to key data sets, when doing so does not affect privacy; and
- the UK should engage internationally on all of these issues.
As for the next steps, the Government is expected to formally respond to the Panel’s recommendations in the summer. To read the Government’s press release in full, click here. To access the report and other associated documents, click here.