The Digital Markets Unit (DMU) will first look to create new codes of conduct for companies such as Facebook and Google and their relationship with content providers and advertisers.
The new unit will be based inside the Competition and Markets Authority.
The regime will be “unashamedly pro-competition”, said the business secretary.
The DMU’s first job will be to think about codes of conduct to govern the relationships between the tech firms and their users, whether that is small businesses wanting to advertise or news organisations looking to distribute their journalism.
Between them, Facebook, Google and Amazon control the lion’s share of digital advertising revenue.
Before taking action, the new regulator will have to wait for such codes to be put into law.
Digital Secretary Oliver Dowden said: “Today is a major milestone on the path to creating the world’s most competitive online markets, with consumers, entrepreneurs and content publishers at their heart.”
Business Secretary Kwasi Kwarteng said the pro-competition regime would “help curb the dominance of the tech giants”.
Andrea Coscelli, chief executive of the CMA, added: “People shopping on the internet and sharing information online should be able to enjoy the choice, secure data and fair prices that come with a dynamic and competitive industry.”
