Tech giants have become increasingly dominant and ministers must open the market up to increase consumer choice, an independent review has said.

An independent panel of experts led by Professor Furman – who was chief economic adviser to President Barack Obama’s White House – was tasked with investigating the sector.

One recommendation was to reduce bullying tactics among competition, with the report suggesting regulators’ existing powers for tackling illegal anti-competitive practices need to be strengthened.

Other suggestions included creating a new digital markets unit to give people more control over their data by enabling them to switch between platforms more easily.

The review said it should develop a code of conduct so the largest digital companies know the competitive rules while changes to merger rules are also needed so the Competition and Markets Authority can better stop digital mergers that are likely to damage future competition.

“The digital sector has created substantial benefits but these have come at the cost of increasing dominance of a few companies which is limiting competition and consumer choice and innovation,” said Harvard Professor Jason Furman, chair of the independent review of competition in the digital sector.

“Some say this is inevitable or even desirable. I think the UK can do better.”

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Professor Furman has warned that UK competition rules must be updated to be fit for the digital age and cited the benefits brought by technology firms but said the rules needed to evolve to keep pace with the market.

He has urged the government to increase competition in the digital sector by strengthening outdated laws as he believes more companies would then be able to join the market on a more equal-footing.

Responding to Professor Furman’s review, Chancellor of the Exchequer Philip Hammond said: “The UK leads the world in embracing technology and the opportunities it delivers for people.

“Competition is fundamental to ensuring the market works in the interest of consumers, but we know some tech giants are still accumulating too much power, preventing smaller businesses from entering the market."