A new unit within the U.K.'s Competition and Markets Authority will be given powers to fine Big Tech firms up to 10% of global revenues for breaches.
Katherine Kirrage, digital competition partner at Osborne Clarke, said it's rare that a competition regulator fines a company the maximum 10% level – but it's the risk to their reputation they should worry about.
"In practice, the maximum 10% threshold is rarely reached in the competition law field and a key point will be understanding how the CMA will calculate consumer law fines," Kirrage said in emailed comments to CNBC. "If it takes a similar approach of starting with turnover only in the market where the infringement has happened, this takes the focus away from total group turnover and tends to make the eventual fine much lower than the 10% maximum. That said, fines in the millions are common in the competition world."
She added, "Also, it is inherent in the logic of creating these strong sanction powers that they should have a significant deterrent effect on others. The adverse PR impact of a big fine that catches the headlines shouldn't be underestimated – our experience is that businesses worry at least as much about the reputational risk of an infringement as they do about the fines."
The law is intended to crack the dominance of tech giants like Amazon, Microsoft and Apple when it comes to online markets. These companies have faced accusations of limiting competition through a number of ways, including restricting the use of software to certain platforms and using data on their customers to boost their businesses.
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