Big Tech lobbying against UK's Digital Markets Bill

Tech firms want to slow regulatory process, say campaigners

A coalition of organisations has urged Prime Minister Rishi Sunak to reject calls made by Big Tech firms for a lengthy appeals process under the proposed Digital Markets, Competition, and Consumers (DMCC) Bill.

The group - made up of trade associations, charitable foundations, publishing firms and smaller e-commerce websites - says the government must uphold the Judicial Review standard for appeals under the Digital Markets, Competition and Consumers (DMCC) Bill, as the 'full merits' review process tech firms are calling for could impede the entire regulatory framework.

Introduced in April, the DMCC Bill aims to address the excessive dominance of Big Tech in digital markets.

It aims to empower the UK competition watchdog, the Competition and Markets Authority (CMA), with the necessary authority to enforce a new code of conduct on some of the most influential companies globally, ensuring effective regulation and oversight.

As part of the DMCC legislation, the Digital Markets Unit (DMU), a branch of the CMA, will receive specific powers to identify large companies with substantial market influence.

Once identified, these firms will have to adhere to a particular code of conduct in the sectors they dominate.

The Code is designed is to prevent firms from distorting or undermining competition among their service users, by misusing their market power and strategic position.

Under the DMCC the CMA will have more resources to investigate competition issues and take action, including where companies collude to increase prices at the expense of consumers.

The proposed reforms will also enhance the penalties for companies found to violate consumer law.

Both the CMA and the courts will have the power to impose fines of up to 10% of a company's worldwide turnover, ensuring more substantial consequences for non-compliance.

Tech firms call for slower regulation

A technical dispute has now emerged in the DMCC, leading to intense lobbying efforts by major tech companies.

Companies like Apple, Meta and Microsoft have told the House of Lords that they want the option to appeal against the DMU's decisions in a "full merits" review.

This step would give tech firms the opportunity to contest unfavourable decisions by undergoing a complete rehearing of all the evidence involved.

This stance contradicts the current version of the bill, where businesses have the ability to request a judicial review of cases - although it is limited to assessing whether the DMU has adhered to its own regulations.

During discussions with peers on Tuesday, Apple legal VP Kyle Andeer argued that a judicial review would not be suitable for such an exercise.

"The JR standard is more focused on process and procedure," said Andeer.

"From our perspective, there really needs to be a strong merit-based review that focuses on the evidence supporting the outcomes here."

Chloé MacEwen from Microsoft said the judicial review standard could introduce "uncertainty" into the system.

Campaigners support "tried and tested" approach

In a joint letter, coordinated by News Media Association and addressed to Rishi Sunak, the coalition of organisations who oppose Big Tech's lobbying efforts urged the government to resist yielding.

The letter says permitting appeals based on merits would enable "powerful firms with unlimited legal budgets" to exploit their resources and influence within the judicial system, impeding and prolonging the entire regulatory framework.

"The judicial review standard for appealing CMA decisions must be maintained to ensure that the objectives of the new pro-competition regime can be realised," the letter says.

"Judicial review is a tried and tested mechanism for appealing regulatory decisions across forward-looking regulatory regimes in the UK, including the CMA's existing merger control and market investigation powers."

The group emphasised the importance of swift decision-making in ensuring the fairness of digital markets, and maintaining fairness over time.

Tina Stowell, the chair of the Lords committee, said Apple reportedly has a legal budget of $1 billion annually. She noted that a single legal staff member at the company received a salary of $26 million in 2021.

The figures illustrate the substantial financial resources Big Tech firms can throw at legal matters.

"I suspect that is larger than the whole of the CMA's legal budget," she added.