A brewing legal dispute concerns the appeal process for giant firms against decisions made by the new unit
Rishi Sunak has been alerted to Big Tech’s attempts to diminish the authority of the UK’s new tech regulator by leveraging their substantial financial resources. As the oversight of Silicon Valley becomes a contentious issue, a battle over jurisdiction is emerging as the latest battleground. The digital markets, competition, and consumers bill currently undergoing parliamentary proceedings grant the Competition and Markets Authority (CMA) the ability to establish stringent regulations for major online platforms like Apple’s App Store, Amazon’s Marketplace, and Google’s search engine.
The focus of intense lobbying from the companies targeted by the bill, as well as their competitors in various industries, has shifted towards a technical dispute. Apple, Meta (formerly Facebook), Microsoft, and other firms have expressed their desire to have the option of a “full merits” review to appeal against decisions made by the Digital Markets Unit (DMU). This would allow them to challenge unfavorable rulings from multiple angles.
This position stands in contrast to the current version of the bill, which grants businesses the right to request a judicial review that solely examines whether the DMU has adhered to its own regulations.
A diverse coalition of organizations, including trade associations representing medium-sized tech companies, the newspaper industry, publishing and bookselling sectors, and smaller e-commerce platforms, jointly wrote a letter to Rishi Sunak. The letter urges the government to resist yielding to such pressure. The News Media Association, of which The Guardian is a member, coordinated and signed the letter.
In a collective letter, the organizations emphasized the importance of maintaining the judicial review standard for appealing decisions made by the Competition and Markets Authority (CMA). They highlighted that this standard is crucial for achieving the objectives of the new pro-competition system. The letter stated that judicial review has proven to be an effective mechanism for appealing regulatory decisions in various forward-looking regulatory frameworks in the UK, including the CMA’s existing powers in merger control and market investigations.
The organizations further cautioned that the companies targeted by the Digital Markets Unit (DMU) possess substantial legal budgets, which could be employed to impede and delay the entire regulatory regime through court proceedings.
During discussions with peers, a representative from a major tech company expressed the opinion that a judicial review would not be suitable for such a purpose.
According to Chloé MacEwen from Microsoft, maintaining the judicial review standard could introduce “uncertainty” into the system. She acknowledged the UK’s aspirations, particularly in terms of attracting new investments and establishing itself as a science and technology powerhouse. While supportive of regulation, there are concerns about the presence of uncertainty.
Representatives from Amazon, Meta (formerly Facebook), and Google echoed this sentiment, expressing their preference for an appeals standard that allows them to question whether the regulator’s decision may not be the most appropriate.
During the hearing, Tina Stowell, the chair of the Lords committee, highlighted that Apple reportedly has an annual legal budget of $1 billion, and that a single legal staff member at the company received a salary of $26 million in 2021. Stowell remarked that this figure is likely larger than the entire legal budget of the CMA.
