Digital Markets, Competition and Consumers Bill opens door for stricter regulation of news platforms

The question

How might the proposed Digital Markets, Competition and Consumers Bill (the Bill) affect news reporting by digital platforms?

The key takeaway

The new rules present an avenue for the UK Government to designate large scale tech companies as having a “strategic market status”, and thus create tailored rules for them to pay for news services on their platform.

The background

The UK has introduced legislation that could pave the way to compelling Google, Facebook and other tech companies to pay to distribute news content by as early as 2024. The long-awaited Bill’s proposed changes have now been presented to Parliament and raise significant new developments in this area. The Bill seeks to improve competition online while affording consumers greater protections online.

This development is a key part of promoting competition by ensuring that bargaining power is restored to media outlets and that they are not left behind in terms of the means by which consumers access the news. The proposals are reminiscent of legislation that has already been introduced in other jurisdictions (most notably in Canada and Australia).

The development

The legislation would allow the Competition and Markets Authority’s Digital Market Unit (DMU) to designate certain platforms as having “strategic market status”. A classification of this kind would give the DMU the authority to create codes of conduct for these businesses as well as customise specific conduct rules for the business’s interactions with users and content providers. According to the Department for Digital, Culture, Media and Sport (DCMS), companies could be forced to alter their interactions with news publishers in order to ensure that publishers are “paid fairly for their online content” by using these behaviour criteria as a legal requirement. These rules are somewhat vague and arguably allow the DMU the power to create rules as they see fit.

Why is this important?

This change is a huge step up in the power of the DMU, who were set up with no powers beyond the CMA’s basic enforcement options. Through creating these tailored rules for “strategic market status” companies, the DMU has been given freedom in what it requires such a company to do, including paying for news. Alongside the other large-scale reforms that the Bill proposes for the UK, the change will have profound impacts on online platforms. Many of these platforms vehemently opposed Australia’s version of the legislation, believing that it could distort digital market competition and leave publishers uncertain about which companies would financially support the news publishing ecosystem. As a result of the opposition, commercial agreements were reached between publishers and online platforms before the Australian legislation was passed.

Any practical tips?

Tech companies which may fall within the DMU’s remit should start assessing how they may be designated once these proposals become law next year and start thinking hard about how they may limit the impact it may have on them. Considering a commercial deal, similar to those pursued in other jurisdictions, may provide a shield from the most extreme of these effects.

Summer 2023