UK Parliament approves law to strictly regulate Big Tech companies

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Alfonso Maruccia

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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.

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UK Parliament approves law to strictly regulate Big Tech companies

 
It might of been easier to just implement European laws which would save everybody time. I have my suspicions that they'll find it hard to get the money out of global companies though. Apple, Microsoft and Alphabet (Google) seem to easily avoid tax laws here.

If they do go ahead by themselves then why not set minimum standards for data security, minimum times to report breaches and a simple standard popup to either accept, refuse or allow a minimum of cookies on web sites. I'm sure there are lot's of other things they could also specify.
 
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mbk34 said:
Apple, Microsoft and Alphabet (Google) seem to easily avoid tax laws here.
Click to expand...
When that government can restrict or stop them doing business in the UK, which is a very lucrative market, they will sit up and take notice. These three companies, as well as all the others, desperately need to learn where their proper place is.

In case it was obvious by my statement, I think this is a good thing for consumers and the individual citizen.
 
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Hidden fees never should have been allowed. It's 2024, hidden fees have been there the whole time with no one lifting a finger to stop it until now. When are contracts in the UK going to protect the consumer? They just protect companies right now. Your rates can be increased in the middle of a contract, and they often are making a contract pointless for consumers.
 
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mbk34 said:
It might of been easier to just implement European laws which would save everybody time.
Click to expand...
Imagine if we'd just stayed as an EU member... When you look back, it's still pretty impressive how many people believed the side of a bus...
mbk34 said:
If they do go ahead by themselves then why not set minimum standards for data security, minimum times to report breaches and a simple standard popup to either accept, refuse or allow a minimum of cookies on web sites. I'm sure there are lot's of other things they could also specify.
Click to expand...
Something I can weigh in on here, there's already a minimum time to report a breach, 3 days. As an MSP, we are legally obligated to tell our clients this once we have confirmed there is a breach, we are not however, legally required to report it ourselves, the client have to report it directly. Which eeerrrmmm, some smaller companies (or even bigger) companies tend to just... you know... what they don't know won't hurt them...

It's disgusting I know, I have anonymously reported issues to various government agency's in the past, sometimes they do go and investigate, sometimes they don't. In either case though, they don't seem to hit anyone with fines or any real telling off at all. Guessing that effort is reserved for the big boys like Apple, Google, Meta etc...
 
ZedRM said:
When that government can restrict or stop them doing business in the UK, which is a very lucrative market, they will sit up and take notice. These three companies, as well as all the others, desperately need to learn where their proper place is.

In case it was obvious by my statement, I think this is a good thing for consumers and the individual citizen.
Click to expand...
It's not that the UK can't get them to pay taxes, it's that creative accountancy allows them to move profits to tax haven countries and so get away with paying minimal taxes everywhere. This admittedly brings prices down (at least for places like Amazon) but it also means that smaller companies, that do pay taxes, can never compete. That leads to empty highstreets and unemployment.

In case it's not obvious in my statement, I think it's a bad thing that large companies can get away with avoiding taxes as those taxes pay should be paying for things like public services.
 
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mbk34 said:
It might of been easier to just implement European laws which would save everybody time. I have my suspicions that they'll find it hard to get the money out of global companies though. Apple, Microsoft and Alphabet (Google) seem to easily avoid tax laws here.

If they do go ahead by themselves then why not set minimum standards for data security, minimum times to report breaches and a simple standard popup to either accept, refuse or allow a minimum of cookies on web sites. I'm sure there are lot's of other things they could also specify.
Click to expand...

Disagree. That which constitutes a monopoly in the EU is not necessarily the same thing in the UK. The legislation in the EU is far more complex, due to the numerous tax frameworks in place across Europe. While the definition of the text is largely the same, the EU legislation is riddled with caveats and "buts" that are specific to situations like the Netherlands, Luxembourg, etc... In the UK, the tax framework is mostly homogeneous and you can't/shouldn't do that.

On the other hand, most of this legislation was already underway when the UK left the EU, so we have mostly the same framework without the nuisance of making exceptions for EVERY country.

If you recall the DPA of 2018, it was developed in the UK but the EU took most of the text for GDPR. The UK had more experience with data protection than the heterogeneous mass of the EU, so they simply annotated it and called it GDPR.

And yes. The UK will fall in the gaps between the US and the EU, because from a corporate point of view, it is an extension of the US.
 
"The UK will fall in the gaps between the US and the EU, because from a corporate point of view, it is an extension of the US."

An extension with a lot less influence and respect these days.
 
LemmingO said:
Disagree. That which constitutes a monopoly in the EU is not necessarily the same thing in the UK. The legislation in the EU is far more complex, due to the numerous tax frameworks in place across Europe. While the definition of the text is largely the same, the EU legislation is riddled with caveats and "buts" that are specific to situations like the Netherlands, Luxembourg, etc... In the UK, the tax framework is mostly homogeneous and you can't/shouldn't do that.

On the other hand, most of this legislation was already underway when the UK left the EU, so we have mostly the same framework without the nuisance of making exceptions for EVERY country.

If you recall the DPA of 2018, it was developed in the UK but the EU took most of the text for GDPR. The UK had more experience with data protection than the heterogeneous mass of the EU, so they simply annotated it and called it GDPR.

And yes. The UK will fall in the gaps between the US and the EU, because from a corporate point of view, it is an extension of the US.
Click to expand...
It's not a question of who's tax system is the more straight forward. It's a question of having a tax systems that can't be steered around by creative accounting. It's about having systems that don't isolate UK businesses from European consumers (or vice versa). It's about having tax systems that are fair to everyone. In 2017, Google was found to be moving $23 billion profits to it's subsidiary in Bermuda where it pays no taxes. This allowed it to legally avoid paying taxes on these profits. Apple did the same with $14B in Ireland.

That's just plain wrong and something needs to change. I understand that businesses don't want to pay more taxes than they can get away with but it seems straightforward to look at overall profits, apply a baseline tax and then distribute the money by the percentage of sales. I'm not a tax guy but a system where Microsoft Singapore showed profits of $22B but paid just $15 in taxes (that's $15.00) is obviously not working.
 
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mbk34 said:
It's not a question of who's tax system is the more straight forward. It's a question of having a tax systems that can't be steered around by creative accounting. It's about having systems that don't isolate UK businesses from European consumers (or vice versa). It's about having tax systems that are fair to everyone. In 2017, Google was found to be moving $23 billion profits to it's subsidiary in Bermuda where it pays no taxes. This allowed it to legally avoid paying taxes on these profits. Apple did the same with $14B in Ireland.

That's just plain wrong and something needs to change. I understand that businesses don't want to pay more taxes than they can get away with but it seems straightforward to look at overall profits, apply a baseline tax and then distribute the money by the percentage of sales. I'm not a tax guy but a system where Microsoft Singapore showed profits of $22B but paid just $15 in taxes (that's $15.00) is obviously not working.
Click to expand...
The problem in the EU is that there are countries that effectively act as tax havens, and no one has the balls to cancel them.

As for the creative accounting, we all know that creative accounting is what the law allows companies to do, and until someone takes the lead on making an example out of a few big businesses, no one will pay their fair due of taxes.
 
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