CMA’s vision of “evidence-based, targeted and proportionate” digital markets regime
With the UK’s new digital makets regime set to become operational from October this year, the CMA has published details about how it intends to operate the regime. Clearly conscious of the scale of the task at hand, the detail of the approach centres on prioritisation and focus and emphasises the need for stakeholder engagement.
Guiding principles
The CMA has stated that it intends to follow 11 guiding principles in operating the digital markets regime, including:
Targeting CMA action to specific identified problems
Prioritising action where it stands to have the most impact for the public, businesses and the UK economy
promoting competition as the main avenue for delvering better outcomes for users
Intervening in a technology-neutral way
Engaging with a range of stakeholders
Operating with transparency
Stakeholder groups
In addition to the 9 tech experts appointed last year, the CMA will seek to set up consultative stakeholder groups representing UK consumers, businesses and tech professionals to help the CMA prioritise its action.
Outcomes and issues
The digital markets competition regime will only apply to firms designated by the CMA as having Strategic Market Status (SMS) in relation to at least one digital activity, following a CMA investigation and public consultation.
The CMA intends to start 3 - 4 investigations within the regime’s first year of operation. The CMA will consider if any firm it designates with SMS is using its status to gain an unfair competitive advantage and will impose conduct requirements to address this, if it considers it proportionate to do so.
The published document contains a useful summary of the types of harms the CMA expects to focus on.
Examples of conduct requirements identified to address such harms could include:
prohibiting SMS firms from favouring their own products/ services or requiring SMS firms to allow competitors improved access to data and functionality.
ensuring SMS firms allow competitor firms’ products / services to work with their own, or requiring SMS firms to provide users with more choice
requiring SMS firms to have fairer trade terms or improve transparency regarding aspects of their algorithms.
When operational, the digital markets regime is set to have far reaching implications for all businesses relying on digital infrastructure operated by SMS firms, as well as the SMS firms themselves. Speak to us to find out more about how this new regime could help your business and explore opportunities to engage and inform the shape of the developing regime.
