UK launches new competition watchdog targeting Big Tech

The UK launched a new regulatory body aimed at policing allegations of anticompetitive behavior among the world’s largest technology companies, adding another agency to a growing list of watchdogs scrutinizing how tech giants use their market heft.

Britain’s new Digital Markets Unit will be tasked with making sure tech giants like Facebook Inc. and Alphabet Inc.’s Google don’t exploit any market dominance to crowd out competition, officials here said. The new unit was unveiled last year but launched officially—with limited powers at first—late Tuesday.

It won’t be able to levy fines until Parliament approves legislation governing its oversight power, a legal framework that is expected to be in place by next year. Meanwhile, the agency is hiring staff and will begin drawing up what would become a legally binding code of conduct for companies once that legislation passes.

The new U.K. unit comes amid Europe’s biggest expansion of global tech regulation in years. The continent has often led the world in regulating technology companies, but Washington and Beijing have both begun to increase their own scrutiny recently. The U.S. filed two major antitrust lawsuits against Google and Facebook in December. The two companies have argued that they don’t abuse their market power.

U.S. merchant groups are forming a national coalition to campaign for stricter antitrust laws, including measures they hope could force Amazon.com Inc. to spin off some of its business lines, The Wall Street Journal reported earlier Tuesday. An Amazon spokesperson said the company’s critics “are suggesting misguided interventions in the free market.”

In November, China unveiled its first draft guidelines overseeing competitive behavior by digital giants. The U.K., which has left the European Union, is also planning to introduce one-of-a-kind online safety legislation later this year.

Britain’s new watchdog will be housed inside the country’s main antitrust regulator, the Competition and Markets Authority, or CMA. That agency is already pursuing probes and enforcement issues with a handful of tech giants, but in the past it has sometimes deferred investigations to EU regulators.

The new Digital Markets Unit will have a staff of around 60 people and plans to spend its first year of operation gathering evidence from businesses, government and academics. Once legislation is passed fully standing the new body up, the regulator is envisioned to have the power to levy fines, reverse corporate mergers and force companies to comply with its new code of conduct.

Britain is creating the watchdog as it steps onto the global stage post-Brexit and during its presidency of the G-7 group of rich nations. Later this month, the U.K. government will host a meeting of digital ministers to discuss joining up regulatory and policy approaches.

The Digital Markets Unit will be led by Will Hayter, a former regulatory director who spent much of the past year working on the U.K.’s transition out of the EU.

“Today is a major milestone in the path to creating the world’s most competitive online markets, with consumers, entrepreneurs and content publishers at their heart,” U.K. Digital Secretary Oliver Dowden said in a statement. Wall Street Journal