In a nutshell: Big Tech is the term conventionally given to the largest technology companies. This group of financial and economic titans essentially “owns” the IT market and is subject to increasingly tighter scrutiny from government authorities around the world.
The UK Parliament recently approved a new bill concerning digital markets and consumer rights, designed to significantly impact IT companies operating in the country. The government-sponsored Digital Markets, Competition, and Consumers Act (DMCC) of 2024 will amend existing laws to enhance and regulate competition in the technology market, granting the Competition and Markets Authority (CMA) new regulatory powers that do not require prior court approval.
Under the DMCC, the UK’s competition authority can swiftly act against technology companies with strategic market status (SMS) in the IT sector. As explained by the UK government earlier this year, SMS corporations are designated after an “evidence-based investigation” and public consultation. If an SMS company is using its monopolistic grip to gain an unfair competitive advantage, the CMA can force the company to change its business practices.
One of the most significant provisions in the DMCC is the CMA’s ability to impose hefty fines on Big Tech corporations, which can amount to up to 10 percent of an organization’s global revenue. The CMA essentially operates beyond the UK’s judiciary system under the DMCC, although the targeted companies must be world-class “giants” with more than £25 billion in total revenue or £1 billion in UK revenue.
The DMCC also includes new protections for UK consumers, forcing companies to ban fake reviews and be more transparent about subscriptions. Hidden fees are no longer allowed, and IT corporations could be required to report mergers to the CMA. The law also introduces new regulations for secondary ticket sales.
The UK’s new stringent law against Big Tech companies closely resembles the Digital Markets Act (DMA) approved by European authorities to regulate Europe’s digital business. Compared to the DMA, however, the DMCC requires the CMA to closely study how tech “gatekeepers” conduct business to determine whether they can be classified as having strategic market status.
After the UK Parliament approved the DMCC, Spotify welcomed the law as new ammunition in the fight for “fair competition” against IT monopolies. Spotify founder and CEO Daniel Ek highlighted Apple’s conduct in digital marketplaces, noting the significant amounts spent “in country after country” to try and circumvent laws like the DMCC.
