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Digital Markets, Competition and Consumers Bill - Sitting 4

15 June 2023

Proposing MP
Rushanara Ali Lab
Bethnal Green and Stepney
Type
Public Bill Committee

At a Glance

Issue Summary

The discussion focuses on the challenges faced by small digital businesses due to the dominant positions of Apple and Google in the app store ecosystem. Rushanara Ali discusses the Digital Markets, Competition and Consumers Bill and its implications on competition and consumer rights. The statement discusses concerns about Google's dominance in the UK search advertising market. The speaker discusses Google's market dominance, innovation efforts, and the potential impacts of the Digital Markets, Competition and Consumers Bill on consumer benefits and competition. Tom Morrison-Bell addresses concerns about the Digital Markets, Competition and Consumers Bill, emphasizing the importance of consumer-centric regulation and checks and balances to prevent market failures. The statement discusses the concerns regarding the high payment processing fees and delays imposed on British start-ups using app marketplaces like Google Play, compared to web-based approaches. It also addresses the ongoing reforms proposed by the Competition and Markets Authority (CMA) for these issues.

Action Requested

Kelli Fairbrother highlights the need for regulatory measures to address unfair practices by large tech companies, such as forced use of their payment systems at high fees and delayed payments, which hinder innovation and growth for smaller players.

Key Facts

  • Kelli Fairbrother is the co-founder and CEO of xigxag, a digital books company.
  • Apple and Google charge about 15% to 30% on in-app purchases compared to 3% online payments.
  • xigxag's revenue from January 1 was received by Apple until March 9.
  • Rushanara Ali addresses questions regarding the Digital Markets, Competition and Consumers Bill.
  • The bill is seen as a first step towards creating a free and fair ecosystem in the mobile space.
  • There are concerns about the depth of remediation needed to level the playing field for businesses.
  • Tom Morrison-Bell is a public policy manager at Google.
  • The Competition and Markets Authority reported in 2019 that Google had over a 90% share of the UK search advertising market.
  • Google spent $145 billion on research and development between 2018 and 2022.
  • The Bill gives extensive powers to the Digital Markets Unit (DMU) which will be highly discretionary and open-ended.
  • The participative approach encourages dialogue with all market parties involved.
  • Google contributes around £55 billion annually to the UK economy.
  • Google Workspace has saved approximately 600 million hours of work time for UK workers through improved productivity tools.
  • The Play store supports about 240,000 developer jobs in the UK and generates revenues of about £2.8 billion.
  • The start-up faces up to 30% payment processing charges with delays of two months when using an app marketplace like Google Play.
  • Web-based approaches, such as Stripe payments, incur only 3%-4% fees with payments received within seven days.
  • Developers can choose their billing system under the proposed 'developer choice billing' model.
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