Digital Markets Bill can ‘level the playing field’ for startups 

Digital Markets Bill Amazon Image credit: Anna Svetlova / Shutterstock.com

A bill aiming to revamp regulation of digital markets is a positive move towards breaking the monopolies of Big Tech but risks being “watered down”, according to the co-founder of a startup taking on the audiobook and e-book giants.

The Digital Markets, Competition and Consumers Bill is a piece of in-progress legislation that aims to give regulators greater powers to prevent anti-competitive practices from the largest tech companies.

Kelli Fairbrother, co-founder and CEO of XigXag, told UKTN the bill has the potential to be a “really exciting first step for the UK to try to level the playing field for app developers and consumers”.

The XigXag founder warned, however, that the legislation is at risk of being “watered down” by the companies it is aiming to keep in check.

“Every extra word that gets put into that bill, Apple and Google will do their best to spend billions to litigate, to try to delay,” Fairbrother said.

Last November, the government published amendments to the bill giving “the most powerful firms in dynamic markets” an avenue to dispute regulatory rulings while avoiding costly legal challenges.

Fairbrother founded XigXag in 2017 with Mark Chapman. The Cornish startup sells audiobooks and e-books in a market dominated by tech behemoth Amazon.

Starting out was “incredibly daunting”, Fairbrother said. Accessing investment early on was challenging because people see Amazon as “unassailable”.

According to Fairbrother, today’s landscape is reminiscent of a time in Silicon Valley when “nobody would invest in software because everyone was terrified of Microsoft”.

“The problem with monopolistic behaviour is that when they do get to a place where they own a significant share, they start throwing their weight around and doing things that they shouldn’t be,” she said.

The Digital Markets Bill

If the bill becomes law, the Digital Markets Unit (DMU), which sits within the Competition and Markets Authority (CMA), will receive additional powers to prevent Big Tech firms from using their market dominance to shut out competitors.

The government has been engaging regularly with these smaller companies, as well as Meta, Amazon and Microsoft, as the bill progresses through Parliament.

Since its first reading in April 2023, the Digital Markets Bill has passed through the House of Commons and is currently at the committee stage in the House of Lords.

It has received criticism during its passage, chiefly that the additional regulatory powers would make the UK a less attractive place for large tech firms.

The free market think tank the Institute of Economic Affairs, for example, warned last year that the bill would stifle innovation as it would give the CMA far greater powers than its counterparts in the EU.

Fairbrother, however, is not so worried about a Big Tech exodus from Britain.

XigXag co-founders Mark Chapman and Kelli Fairbrother
XigXag co-founders Mark Chapman and Kelli Fairbrother. Image credit: XigXag

“The UK market is a really vibrant consumer ecosystem, and a really important market for these companies,” she said.

“It’s not like we’re at their mercy…the government should be confident of saying [the UK] is important enough to these brands that they can’t ignore it.”

For Fairbrother, the only thing that will be stifled is the practice of “Amazon and Google using dirty tricks and dangling money in front of governments to get what they want”.

“If the government can actually make these changes, it has the potential to unleash a whole load of innovation from the UK.”

Fairbrother highlighted the parallels of firms like Apple and Google resisting the bill, given that they “were some of the key beneficiaries of the antitrust movement against Microsoft” in 2001.

“It is really interesting that they are so resistant to being looked at or scrutinised in any way at this moment,” she said.