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.
