The government has today accepted, in principle, the findings of
the Competition and Markets Authority’s (CMA) year-long study,
committing to introducing a new pro-competition regulatory regime
to tackle the market power of tech giants like Google and
Facebook.
In its response to the study,
the government has also outlined that a Digital Markets Unit
(DMU) will be established within the CMA in 2021/22 to enable the
CMA to begin work to put into operation key elements of the
regime.
The CMA’s Digital Markets Taskforce is due to advise government
on the design of the new regulatory regime before the end of the
year. It will then be for government to take action and bring
forward legislation to establish the regime.
In the final report from its online platforms and
digital advertising market study, published in July this
year, the CMA outlined a number of factors that undermine
competition and entrench the market power of Google and Facebook.
The scale and nature of these issues led the CMA to conclude that
a new pro-competition regulatory regime is needed so that people
can continue to benefit from innovative new services; rival
businesses can compete on a level playing field and publishers do
not find their revenues unduly squeezed.
CMA Chief Executive Andrea Coscelli said:
We welcome the government’s response to the findings of our
digital advertising market study.
Only through a new pro-competition regulatory regime can we
tackle the market power of tech giants like Facebook and Google
and ensure that businesses and consumers are protected.
We will soon be providing advice to government on how this new
regime should work, as requested earlier this year, and stand
ready to support the setup of the Digital Markets Unit.
Alongside today’s announcement, Her Majesty’s Treasury announced
in its Spending Review on 25 November that the CMA will receive
additional budget to take on new responsibilities, including
establishing the Digital Markets Unit from 1 April 2021.
Notes to editors
- The CMA is the UK’s primary competition and consumer
authority. It is an independent non-ministerial government
department with responsibility for carrying out investigations
into mergers, markets and the regulated industries and enforcing
competition and consumer law.
- In March, the CMA was asked by government to lead a Digital
Markets Taskforce, led by the CMA working closely with Ofcom and
the Information Commissioner’s Office to advise government on how
a new pro-competition approach should be designed for digital
markets. Find out more in the Terms of Reference for
this work.
- As a result of its clear recommendation for a new regulatory
regime, and the ongoing work of the Taskforce, the CMA is not
currently recommending making a market investigation reference.
However, after the work of the Taskforce has concluded, it will
assess whether the actions being taken by the government are
sufficient to address the full range of issues identified by its
market study, or whether direct action by the CMA is likely to be
required.
