Chancellor to make fresh attempt to curb power of tech giants

Philip Hammond to promise action on plan to tackle Google, Facebook, Amazon, Microsoft and Apple

A fresh bid to curb the market power of US tech giants will be signalled by Philip Hammond on Wednesday when he welcomes the findings of an independent review calling for government action to ensure companies including Google, Facebook and Apple face stiffer competition.

The chancellor will use his annual spring statement to promise action after a review conducted for the Treasury by Jason Furman, Barack Obama’s chief economic adviser, concluded that the dominance of the big digital players was curbing innovation and reducing consumer choice.

Furman, now a Harvard professor, said a new digital markets unit should be set up in Whitehall staffed by people with technological expertise and equipped with the powers to set and enforce greater competition.

The review says individuals should be given more control over their personal data to enable them to switch between platforms more easily, that the biggest tech companies – Google, Facebook, Amazon, Microsoft and Apple – should have to sign up to an enforceable code of conduct, and that merger policy should be toughened up.

“Over the last 10 years the five largest firms have made over 400 acquisitions globally. None has been blocked and very few have had conditions attached to approval, in the UK or elsewhere, or even been scrutinised by competition authorities,” the review said.

“Ensuring that competition is vibrant requires ensuring that there are competitors. Merger control has long had this role and in the context of the digital economy it needs to become more active with an approach that is more forward-looking and more focused on innovation and the overall economic impact of mergers.”

The Treasury said the Furman review was part of a package that also included Hammond’s proposals for a UK digital sales tax, an upcoming white paper to prevent online harms, and the Cairncross review into the future of journalism.

“The UK leads the world in embracing technology and the opportunities it delivers for people. Competition is fundamental to ensuring the market works in the interest of consumers, but we know some tech giants are still accumulating too much power, preventing smaller businesses from entering the market,” Hammond said.

“The work of Jason Furman and the expert panel is invaluable in ensuring we’re at the forefront of delivering a competitive digital marketplace. I will carefully examine the proposals put forward by the panel before responding later this year, setting out how the government will implement the changes needed to ensure our digital markets are competitive and consumers get the level of choice they deserve.”

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Furman said the dominance of the tech giants was neither inevitable nor desirable, and rejected the idea that it was now too late to inject more competition. “The sooner we get on with it the better.”

He added: “These recommendations will deliver an economic boost driven by UK tech startups and innovation that will give consumers greater choice and protection.”

Damian Collins, the Conservative MP and chair of the digital, culture, media and sport committee, welcomed the report. “It’s central conclusions that digital markets only work well if they are supported with strong pro-competition policies, corroborates a number of the findings of my committee’s report into disinformation and ‘fake news’ published in February.”


Larry Elliott

The GuardianTramp

Related Content

Article image
Tech giants may face billions of pounds in fines from new UK watchdog
Competition regulator wants new Digital Markets Unit to have power to levy huge penalties if firms abuse code of conduct

Mark Sweney

08, Dec, 2020 @1:19 PM

Article image
Tech giants power record surge in renewable energy sales
Amount of clean energy bought by companies triples in two years, with Google biggest buyer

Jillian Ambrose

28, Jan, 2020 @2:03 PM

Article image
Don’t expect post-Brexit Britain to match EU’s fight against big tech | Phillip Inman
Profits for America’s tech firms continue to soar and there are few signs they will face tougher rules

Phillip Inman

28, Jul, 2021 @4:43 PM

Article image
Is big tech now just too big to stomach?
The Covid crisis has turbo-charged profits and share prices. But are the big six now too powerful for regulators to ignore?

Jasper Jolly

06, Feb, 2021 @8:00 AM

Article image
US tech giants launch fierce fightback against global tax avoidance crackdown
Lobbyists representing firms including Google, Amazon and Apple claim ‘fundamental flaws’ in G20-led reforms

Simon Bowers

21, Jan, 2015 @11:17 PM

Article image
‘Silicon Six’ tech giants accused of inflating tax payments by almost $100bn
Study claims firms paid $96bn less in tax between 2011 and 2020 than the notional figures cited in their annual reports

Rupert Neate Wealth correspondent

31, May, 2021 @7:01 AM

Article image
New study deems Amazon worst for 'aggressive' tax avoidance
Transparency campaign Fair Tax Mark says big six tech firms have paid a fraction of headline tax rate for 10 years

Rupert Neate Wealth correspondent

02, Dec, 2019 @6:01 AM

Article image
France poised to drop plan to tax tech giants amid signs of US deal
Talks in Davos raise hope of agreement to find multilateral solution to taxing digital firms

Larry Elliott in Davos

21, Jan, 2020 @7:23 PM

Article image
Hammond targets US tech giants with 'digital services tax'
Tax aimed at likes of Amazon and Google but OBR says it might raise just £30m from each

Rupert Neate Wealth correspondent

29, Oct, 2018 @7:06 PM

Article image
Market power wielded by US tech giants concerns IMF chief
Christine Lagarde feels ‘too much concentration in hands of the few’ does not help economy

Larry Elliott

19, Apr, 2018 @5:16 PM