Advice to DCMS on how a code of conduct could apply to platforms and content providers
Advice, produced jointly by the DMU within the CMA and Ofcom, which sets out our view on how a code of conduct could apply in one instance – to govern the relationship between platforms and content providers, including news publishers.
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The government is proposing a new pro-competition regime for digital markets, including enforceable codes of conduct applying to digital firms designated as having Strategic Market Status (SMS). In April 2021, the Digital Secretary asked the non-statutory Digital Markets Unit (DMU) in the Competition and Markets Authority (CMA) to work with Ofcom to ‘look at how a code would govern the relationships between platforms and content providers such as news publishers, including to ensure they are as fair and reasonable as possible’. This advice is the CMA’s and Ofcom’s response to that request.
The new regime is far broader, encompassing a broad range of activities and users of SMS firm’s services, our advice sets out how a code of conduct could apply in this one instance.
Our view is that an enforceable code of conduct where the DMU can set requirements would be effective in securing fair compensation for use of content by:
- addressing concerns about the transparency of algorithms
- giving publishers appropriate control over presentation and branding of their content
- driving improved practices in the sharing of user data between publishers and those platforms that host their content
- redressing the imbalance in bargaining power in negotiations between publishers and platforms by providing a framework for the determination of fair financial terms for publishers’ content where this is hosted by large platforms with SMS
The aim of a code of conduct would be to manage the effects of an SMS firm’s market position, ensuring the SMS firm cannot unfairly use its market power and strategic position to distort or undermine competition between users of the SMS firm’s services. A code is only one way of addressing market power issues between SMS platforms and content providers. In particular, we would expect the code to sit alongside pro-competitive interventions (PCIs), which would tackle more directly the sources of the platforms’ market power.