CMA and Ofcom publish a joint statement on online safety and competition in digital markets in the UK

• United Kingdom

• Competition, EU and Trade
• ESG
• Privacy, data protection and cybersecurity
• Consumer

30-08-2022

On 14 July 2022, Ofcom and the Competition and Markets Authority (“CMA”) published a joint statement in relation to online safety and competition in digital markets.

Introduction

The aim of Ofcom and the CMA is to develop a coherent approach to online services, which can potentially be harmful in cases where there is little or weak competition or where there is a lack of protection for users from harmful content.

This is particularly relevant in light of the government’s proposals for new forms of digital regulation, including the Online Safety Bill currently being considered by Parliament and the proposed new competition law regime for digital markets which will be overseen by the Digital Markets Unit within the CMA. Ofcom will be responsible for implementing a new online safety regime.The Three Categories of Interaction between Competition and Online Safety

The statement considers the interactions between competition and online safety in terms of three categories:

• policy synergies,
• policy tensions, and
• unnecessary constraints.

Policy synergies occur where interventions in relation to competition can also positively impact online safety objectives, and vice versa.

For example, where there is greater competition and users have more choice, consumers and advertisers can engage with the platforms that are safest and best safeguard their interests, leading providers to better consider users’ safety demands. The CMA and Ofcom can consider such policy synergies when designing interventions to maximise the benefits to consumers more widely.

Policy tensions, by contrast, occur where certain interventions may have negative impacts on different policy objectives. As online safety and competition regimes have distinct policy aims, there are likely to be a number of policy tensions. It is therefore important for the CMA and Ofcom to identify and consider these so that the negative impacts can be mitigated where possible.

For example, online safety interventions could unintentionally increase the cost of entry to a market, making it more difficult for start-ups to enter or compete. In recognition of this, the online safety regime is looking to adopt a proportionate approach to safety duties. Where it is not possible to mitigate negative effects, the CMA and Ofcom consider that regulators will need to be transparent about the risks and ensure that any impacts are proportionate to the aims of the intervention.

Unnecessary constraints cover gateway platforms which, whilst they may have their own online safety measures, can negatively affect competition.

By applying their own security, privacy and safety measures, gateway platforms sometimes require other firms using that platform to comply with those standards. This in effect places the gateway platforms in a quasi-regulatory role. Additionally, the safety measures can go further than necessary which can negatively impact competition. To combat this, regulators can look at more competition-friendly options that also meet safety objectives. Alternatively, they could impose clear online safety standards, which would limit the ability for companies to introduce overly restrictive safety requirements.

How this may affect your business?

Accordingly, now may be an opportune time to consider how the current draft Online Safety Bill could unfairly prejudice competition or your ability to continue to operate with sufficient freedom of speech in your sector – and in turn, feedback either alone or as part of your industry sector group to explain how the proposed regulation could unintentionally create an unfair playing field.

Alternatively, you should also consider when setting standards for gaining access, membership or distributing products, services and apps on a platform whether those standards, in themselves, unintendedly, give a competitive advantage to or favour some contributors or participants over others. Equally, it will be important to document how and why certain measures have been introduced and what justifications there are for a particular approach (based on evidence of previous behaviours or current threats and potential risks to online safety); and, also what mitigation steps can be or have been taken, to address those risks.

What is online ‘harm’?

The Online Safety Bill seems not only to prohibit or limit illegal or unlawful material but also content which is, “legal but harmful”. This remains a particular concern as this could be construed very broadly and seems inadequately defined. The vagueness and ambiguity that this could cause may inevitably be counter-productive; this is despite the obvious harms and challenges that online content (and especially user-to-user content) presents, whether it be in the form of bullying, self-harm or otherwise. There are therefore increasing calls for clearer definitions and understanding of what this is designed to prevent. That said, what is considered ‘obscene’ over the years has always been a moving feast, based upon what society is perceived to accept, depending on the state of culture, taste and decency at the time (and as the years go back). This debate will continue to rage on.

Continuing trend of increasingly collaborative regulation

The statement also sets out how the CMA and Ofcom currently work together and how they hope to continue this to identify the interactions between competition and online safety mentioned above. It underlines the continued desire for cooperative collaboration between regulators, not only in the context of policy, but also regulation, information sharing, sanctions and enforcement.

The statement forms part of a programme under the Digital Regulation Cooperation Forum (“DCRF”) to better support co-operation between digital regulators, and reflects the need for greater collaboration in light of the forthcoming online safety regime.

Additionally, the CMA and Ofcom will also continue to work with the ICO and FCA to address economically harmful and illegal content.

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Sources:

• https://www.ofcom.org.uk/__data/assets/pdf_file/0015/240810/Online-Safety-and-Competition-in-Digital-Markets-Joint-Statement.pdf
  
  
• Digital Regulation Cooperation Forum (DRCF) - Ofcom