CMA sets out approach to new digital markets regime
Sarah Cardell to tell Silicon Valley tech conference the new regime will be ‘evidence-based, targeted and proportionate.’
The Competition and Markets Authority (CMA) has today published an overview of how it intends to operate the new digital markets competition regime as currently proposed by the Digital Markets, Competition and Consumers (DMCC) Bill.
The document, which comes in response to a request from UK government ministers, details the principles that will guide the CMA’s approach to its new role. This will include tailoring the CMA’s actions to the specific problems that are identified; focusing on where it can have the most impact for people, businesses, and the UK economy; engaging with a wide range of stakeholders; and operating with transparency.
The CMA also plans to convene groups representing UK consumers, businesses and tech professionals that will be consulted and help prioritise its work. This is in addition to the 9 tech experts appointed last year, who have been assisting the CMA in preparing for the new regime.
The document provides an overview of the outcomes the CMA will seek to achieve and the issues it will seek to address and sets out 11 principles underpinning how the CMA will carry out its new digital markets role.
The digital markets competition regime will only apply to firms designated by the CMA, following an evidence-based investigation and public consultation, as having Strategic Market Status (SMS) in relation to one or more digital activities. The CMA expects to start 3 to 4 SMS investigations within the first year of the new regime coming into force. Once a firm is designated with SMS, the CMA can then take action to address or prevent problems.
If the CMA finds businesses are using their status to gain an unfair competitive advantage, it will take targeted and proportionate action to address the behaviour. In some cases, this will mean imposing conduct requirements on firms in relation to the digital activity for which they have been designated. These could, for example, include:
- preventing SMS firms from preferencing their own products and services, or by making SMS firms provide competitors with greater access to data and functionality.
- requiring SMS firms to allow the products and services of other firms to work with their own, or ensuring SMS firms provide their users with an effective choice.
- mandating SMS firms to trade on fairer terms or requiring them to increase transparency with respect to aspects of their algorithms.
Widespread stakeholder engagement will be critical to the success of the new regime and the publication of the overview document coincides with a senior CMA delegation visiting the US West Coast to meet a wide range of major digital firms to explain how the new digital markets regime will operate and gain a deeper understanding of their businesses and operating environments.
Speaking at the annual Concurrences ‘Tech Antitrust’ Conference in Silicon Valley, Sarah Cardell – Chief Executive of the CMA – is expected to say:
Competitive digital markets are a key driver for investment and innovation, supporting the growth of the UK economy, and bringing huge benefits to UK businesses and consumers. The new digital markets competition regime will help ensure that tech challenger firms can bring forward genuinely disruptive and exciting new innovations that will create great new products for consumers. The new powers it will grant the CMA are substantial and we are committed to taking a targeted, evidence-based and proportionate approach to implementing them.
Today’s overview document not only provides clarity for UK parliamentarians, but also for digital firms and wider stakeholders about the approach the CMA intends to take. To ensure the new regime operates as effectively as possible, it’s crucial that we continue to engage widely with a range of stakeholders, from the major tech players to challengers and users.
Once Parliament passes the Digital Markets, Competition and Consumers Bill, we will release more detailed draft guidance for consultation. This will mean that everyone is clear about how we intend to operate the regime and has the opportunity to provide their views.
Notes To Editors
- On 4 January, Department for Business and Trade (DBT) Minister Hollinrake and Department of Science, Innovation and Technology (DSIT) Minister Bhatti wrote to the CMA asking it to set out plans and proposed timelines to implement the new digital markets regime. In response, the CMA’s overview document has been published on its website.
- A copy of Sarah Cardell’s remarks at the Tech Antitrust Conference, which is hosted by Concurrences, will be published on the CMA website later today.
- As set out in the Bill, for any business to be able to be designated with strategic market status it must have:
- Substantial and entrenched market power in a digital activity linked to the United Kingdom.
- A position of strategic significance.
- Global turnover of more than £25 billion or UK turnover of more than £1 billion.
- The Digital Markets, Competition and Consumer Bill is currently going through the legislative process and led by DSIT.
- For media queries, please contact the press office via press@cma.gov.uk or on 020 3738 6460.