The U.K government said its new division would be working to resolve ongoing questions about power accumulation by a limited group of tech giants.
The Department of Digital, Entertainment, Media and Sport said it aims to develop a Digital Markets Unit (DMU) to implement a new code to regulate the behaviour of platforms such as Google and Facebook that currently dominate the market.
The code is intended to ensure that the actions taken by tech companies are not disadvantaged by customers, small enterprises, and news publishers, the government said.
Under the new code, some of the largest tech businesses in the world will need to be more honest about the software they offer and how they use data from customers. They will also be required to give consumers a preference as to whether to accept targeted ads, and they may not be able to prevent customers from accessing competing channels that make it harder for them.
The DMU, which will be part of the Authority for Competition and Markets (CMA), will commence work in April 2021.
The government revealed that the DMU should be granted the authority to suspend, block and overturn decisions taken by major technology firms to the unit. The DMU may also order them to take certain steps to conform with the code and to enforce financial sanctions for failure to comply, the government said.
The CMA called on the government in July to grant it more powers and set up the DMU, claiming that massive digital advertising channels needed to be reined in. The regulator said it was worried about how digital advertising is being used by tech companies like Google and Facebook to fuel their business models.
While the recommendations of the CMA have a domestic orientation, the watchdog said the challenges it had found were “international in nature” and that as part of its digital approach it would look to “take a leading role globally”.
In the past, Facebook said in a statement that it would communicate with the U.K. “Rules protecting consumers and helping small businesses to rebuild as the British economy recovers” from the coronavirus pandemic through government agencies.