Industry News

Government announced it will bring forward Digital Markets Unit legislation

By PPA Public Affairs Team

9 May 2022

The Government on Friday announced that it will bring forward legislation to put the Digital Markets Unit (DMU) on a statutory footing, as it responded to it most recent consultation on the new pro-competition regime for digital markets. The PPA and over 100 other organisations submitted evidence to the consultation, including several other media trade bodies and businesses.

The news comes ahead of the Queen’s Speech on Tuesday 10th May, which will set out the Government’s legislative agenda for around the next 12 months. The PPA has long campaigned for the new regulator to be given the powers it needs to reign in big tech, including in a recent letter from an unprecedented media coalition which sparked a flurry of media coverage.

Also published on Friday was the CMA and Ofcom’s advice to Government on how the DMU’s Codes of Conduct could regulate relationships between large platforms and online content providers. The PPA is pleased that the advice makes clear that such a Code would apply to all content providers, including specialist media publishers. You can read a summary of the advice below:

What are the key concerns?

Four key publisher-specific concerns were identified by the report. These are:

- A lack of algorithmic transparency

- Unequal access to user data

- A lack of control over content presentation and branding

- Large platforms ‘free-riding’ on publisher content

The advice also recognised that platforms’ dominance in the digital advertising market is a key concern, and these will be addressed by other DMU Codes and pro-competitive interventions.

How could a Code apply to algorithms, data, and content presentation?

A Code would expect platforms’ algorithms to treat publishers equally, unless there is a justifiable reason to differentiate between them. Firm would also be expected to give publishers a fair warning of changes, and provide clear and accessible information to publishers on how content is surfaced.

Regarding data, and content presentation, a Code would aim to prevent data leakage and allow publishers to present content to mobile users in their preferred web format (unless there is an objectively justifiable reason to require the use of other formats). SMS firms would also have to avoid imposing format requirements (directly or indirectly) on publishers in order to restrict user movement away from platforms’ services. Where there is an objectively justifiable reason to require the use of a particular web format, SMS firms should still enable publishers to understand their users and build a customer relationship and provide fair access to data, as well as ensuring content is adequately attributed.

How would a Code apply to payment for content?

It is important to recognise that a wide range of factors, such as those discussed above including access to user data, might form part of a ‘fair and reasonable’ settlement for payment for content. The advice notes that whilst the principles set out have an application for all content, specific payment settlements could vary significantly between content genres.

It is stated that the DMU should provide guidance on how compensation should be calculated: the aim of the guidance would be to provide clarity for the parties involved to help them come to an agreement whilst allowing sufficient flexibility such that these solutions could be market-based and commercially beneficial.

Further, the advice states that the assessment of value should take a broad view of value created through the use of content by platforms, as has been argued for by content providers. This wider view would include the value of data acquired by platforms (‘Data benefits’) when users interact with their content as well as the contribution of their content to attracting users to the platform’s services and keeping them there (‘Market expansion/indirect benefits’).

Regarding the calculation of value, the advice states that the assessment should be carried out collectively for all UK publishers of a particular type of content. This, it is argued, is more efficient and will mitigate the risk that smaller publishers get a worse deal.

What happens next?

The PPA looks forward to engaging with the DMU and Government to ensure that the legislation to empower the DMU is brought forward as soon as possible. We have arranged meetings with the DMU and Department for Digital, Culture, Media and Sport to discuss the plans in greater detail, and highlight the need for the DMU to tackle specialist media-specific issues. Following the Queen's Speech on Tuesday 10th May, we will engage with parliamentary stakeholders to emphasise the need for legislation to be brought forward as soon as possible.

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