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Digital Markets, Competition and Consumers Bill - Sitting 3

15 June 2023

Proposing MP
Philip Hollobone Con
Kettering
Type
Public Bill Committee

At a Glance

Issue Summary

The statement discusses concerns about the Digital Markets, Competition and Consumers Bill and its impact on various technology firms in the UK. Philip Hollobone is managing a quickfire round of questions for Neil Ross regarding the Digital Markets, Competition and Consumers Bill. MP Philip Hollobone leads the questioning of witnesses Gene Burrus and Tom Smith about the Digital Markets, Competition and Consumers Bill. Gene Burrus addresses concerns raised regarding the Digital Markets Bill and its potential impacts on innovation and competition. The statement addresses the need for regulation of dominant digital firms and the impact of current market conditions on innovation and competition. The statement discusses how Google's practices have negatively impacted digital market competition and consumer choice. Mark Buse discusses the impact of Apple and Google's control over app stores on user access, pricing, and online safety. Tom Fish discusses the need for data owners, particularly consumers, to access and benefit from their personal information managed through Gener8's service. The statement discusses potential unintended consequences of the Digital Markets, Competition and Consumers Bill and addresses concerns about lobbying efforts by tech giants like Google and Apple. The discussion revolves around the impact of high commission fees charged by app store providers like Apple and Google on investment and growth in online dating companies. Tom Fish discusses the need for greater scrutiny and transparency in digital markets, particularly regarding conflicts of interest involving big tech companies.

Action Requested

The speaker outlines that the digital markets unit must ensure consultation with smaller and challenger firms to prevent them from being unfairly disadvantaged by larger companies. He also highlights the need for clear confidentiality measures and a balanced appeal standard to avoid lengthy legal challenges deterring regulatory action.

Key Facts

  • techUK represents about 1,000 technology companies in the UK.
  • The Bill aims to boost competition in digital markets through powers conferred on the Digital Markets Unit (DMU).
  • The DMU must ensure consultation and engagement with smaller firms at every stage of discussion.
  • Neil Ross discusses the potential impact of the Bill on innovation.
  • The concern raised is that companies might feel they need permission from DMU or CMA to innovate.
  • Ross mentions the JR approach to appeals and suggests a judicial review-plus system.
  • Gene Burrus represents the Coalition for App Fairness with over 70 mobile app developers from various countries.
  • Tom Smith is a competition lawyer who formerly worked at CMA's digital markets taskforce.
  • The bill aims to break the distribution monopoly of Apple and Google, giving app developers other options.
  • The DMU has discretion under the Bill to develop bespoke solutions for market issues.
  • Concerns raised about subscription traps requirements being onerous.
  • Third-party input is crucial for the DMU's understanding and implementation process.
  • The Bill aims to force SMS firms to innovate more due to competitive constraints.
  • The EU is seeking to ex ante regulate digital markets.
  • India has rulings against Google, Korea has app store legislation, Netherlands has a ruling against Apple’s app store, Australia proposes similar regime as the UK Bill.
  • Digital platforms charge a 30% tax on in-app purchases for digital goods since around 2012.
  • Google charges 30%-40% more than Bing to reach the same audience eyeballs.
  • Richard Stables is CEO of Kelkoo Group.
  • Kelkoo was a popular shopping price comparison site before being impacted by Google's actions.
  • Google was fined £2.4 billion in 2017 for antitrust violations related to shopping comparison sites.
  • Less than 1% of Tinder’s users go to the website.
  • 98% of Match's revenue is from subscriptions.
  • Gener8 faces unpredictable review processes and barriers to entry due to Google and Meta's dominance.
  • In Southend-on-Sea, there are 372 active Gener8 users.
  • Excess profits in the advertising sector contribute to higher prices for goods and services across the economy.
  • The Bill is expected to encourage investment and innovation by creating a level playing field against big tech.
  • The UK Bill gives flexibility to the CMA to adjust and adapt.
  • Google submitted a proposal offering a 26% fee, accepted by the CMA due to lack of authority to demand more.
  • Big tech companies have spent over $300 million in the last two years on advertising alone against anti-trust change in the US.
  • Mark Buse's company pays around $700 million annually in commissions to Apple and Google.
  • Tinder generates over $3 billion in revenue per year.
  • Other companies are reluctant to speak out due to fear of penalties from app store providers.
  • Tom Fish addresses concerns about polarised debates on big tech issues.
  • The issue of subscription traps is noted for further examination in the Bill's progression.
  • Operating systems should be designated as having strategic market status to enable potential interventions.
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