Fears new technology watchdog will lose teeth under PM Truss

‘Unless it’s altered, in their eyes it’s too interventionist. It will struggle to progress in its current form’

WHITEHALL officials fear a government led by Liz Truss will leave the new tech watchdog without powers to clamp down on the likes of Google and Facebook and hand out multibillionpound fines.

Concerns have risen that legislation to empower the Digital Markets Unit (DMU) will be ditched under a new administration opposed to ramping up regulation after Boris Johnson kicked the proposals into the long grass.

Rishi Sunak has committed to reviving the plans to empower the tech watchdog, a new unit within the Competition and Markets Authority(cma), and proposals to ensure platforms fairly pay publishers.

However, Ms Truss, the front-runner to become PM, has not committed to the legislation as officials fear that a window of opportunity for the plans has now closed.

One senior government official close to the plans said allies of Ms Truss have “been vocal against the DMU for quite a while”.

They added: “I think it will be pushed effectively. Unless it’s altered, in their eyes it’s too heavy handed on the regulatory side of things, and too interventionist by the CMA. It will struggle to progress in its current form.”

The legislation would give the DMU enforcement powers, allowing it to set rules for tech giants and hand out fines of up to 10pc of annual turnover. For the biggest firms, it could mean multibillion-pound fines if they breach the rules.

The Government hoped the new powers would benefit consumers, boost publisher revenues and allow early stage firms to compete against the industry’s titans. But the legislation was thrown into doubt after it was left out of the Queen’s Speech earlier this year, meaning the tech watchdog’s fate will be decided by the new prime minister.

A proposed code of conduct drawn up by the CMA suggested that the new unit’s powers to pay publishers fairly would make sure that “big tech firms with significant bargaining power would have to agree fair and reasonable terms for the content they use on their platforms”.

Earlier this year, the European Union targeted big tech firms with sweeping new antitrust legislation, which is expected to come into force by October. The Digital Markets Act, or DMA, is designed to limit the power of mostly American technology giants and encourage competition from smaller businesses.

The Department for Digital, Culture, Media and Sport did not respond to a request for comment.