Time to clamp down on bullying tech giants

Experts call for a web watchdog Rules not fit for modern age Regulators urged to act

GIANT technology companies have become too powerful and must be reined in with tougher competition rules, a hard-hitting report warns today.

The review, presented to Chancellor Philip Hammond, says the dominance of Google, Facebook, Amazon and Apple is hampering choice and tipping the scales against smaller competitors.

It warns the big Silicon Valley tech firms have amassed unprecedented troves of data and are restricting rivals’ access, to crush them.

Hammond is expected to respond to the findings today when he gives an update on the economy in his Spring Statement. The report also:

Warns existing competition rules are not fit for the digital age.

Calls for an inquiry into the murky online advertising market dominated by Google and Facebook.

Says a new unit should be set up within the Competition and Markets Authority to properly police technology firms.

The review, produced by Harvard University professor Jason Furman and a panel of experts, will pile further pressure on America’s technology titans as they face growing scrutiny around the world.

Furman, a top adviser to former US president Barack Obama, said: ‘The digital sector has created substantial benefits but these have come at the cost of increasing dominance of a few companies, which is limiting competition and consumer choice and innovation.

‘Some say this is inevitable or even desirable. I think the UK can do better.’

The review comes after the House of Commons digital, culture, media and sport committee last month likened Facebook and its executives to ‘digital gangsters’, accusing them of brazenly breaking competition rules.

Bosses, including Facebook’s billionaire founder Mark Zuckerberg, pictured, have been accused of ignoring concerns over the behaviour of their businesses.

The report said technology giants were now so powerful that they act as ‘gatekeepers’ between businesses and customers.

It also said the huge amount of data they gathered created a ‘feedback loop’, helping them attract more customers and develop products faster – and then hoover up even more data.

Google and Facebook’s iron grip on advertising was singled out – the two rake in more than half of the £11.6bn spent annually on digital ads in the UK. And it pointed to evidence that Amazon had become ‘ the default online option for many shoppers’, with a third of all UK ecommerce transactions going through the company last year. The finding contradicted claims made last year by Amazon, which told MPs that it was a ‘ very small’ part of online retail.

The review flagged a series of ‘problematic’ takeovers, which it said reduced competition.

It highlighted Google’s £1.3bn takeover of video service YouTube in 2006, Facebook’s £765m swoop on Instagram in 2012, and Apple’s £2.3bn takeover of headphones firm Beats Electronics in 2014.

Furman said current UK competition rules were not fit for the modern age.

Hammond said: ‘ The work of Jason Furman and the panel is invaluable in ensuring we’re at the forefront of delivering a competitive digital marketplace. I will carefully examine the proposals put forward.’