UK needs to meet Facebook, Google competition with new rules - report

Britain needs to overhaul its competition rules to tackle the dominance of tech giants like Facebook, Google and Amazon, and increase consumer choice, a UK government review said on Wednesday.

A new competition unit with expertise in the sector should be set up, the independent review said, and innovation should be encouraged by giving people control over their own data so they could switch between rival services and platforms easily.

Smaller companies should also have access to the data that social media platforms hold on their users, it recommended.

Big tech has been criticised by politicians in the US and in Europe in recent years over issues ranging from Facebook losing track of users' data, to how Google ranks the results of searches.

France, Italy, Britain and Spain have also proposed new digital taxes to narrow loopholes that allow large multinational firms to cut tax bills.

Harvard professor Jason Furman, who chaired the British government review, said the digital sector had created substantial benefits but they had come at the cost of the increasing dominance of a few companies.

"My panel is outlining a balanced proposal to give people more control over their data, give small businesses more of a chance to enter and thrive, and create more predictability for the large digital companies," he said on Wednesday.

"These recommendations will deliver an economic boost driven by UK tech start-ups and innovation that will give consumers greater choice and protection."

UK finance minister Philip Hammond, who will deliver a half-yearly update on the budget later on Wednesday, said he would set out government measures to ensure digital markets are competitive later this year.

TechUK, which represents more than 900 tech companies that collectively employ 700,000 people, said the report contained some positive suggestions, but it needed further detail on what any proposed code of conduct for big tech might look like.

It also said there had to be a full assessment of the risks and benefits of opening up data sets.

"Bad regulation can be as big a barrier to competition and innovation as monopolistic activities," TechUK CEO Julian David said.

"The UK must remain a welcoming place for digital business from around the world, and ensure that the UK competition and wider regulatory framework is not in conflict with the other leading digital economies with which we must compete."