CMA Unveils Framework for New Digital Markets Competition Regime
The Competition and Markets Authority (CMA) has released an overview outlining its strategy for operating under the proposed Digital Markets, Competition and Consumers (DMCC) Bill. Responding to a request from UK government ministers, the document presents guiding principles for the CMA's approach, highlighting tailored actions, impactful interventions, stakeholder engagement, and transparency.
Key points from the document include the CMA's intention to convene groups representing UK consumers, businesses, and tech professionals for consultation and prioritisation of its work. This complements the contribution of the nine tech experts appointed last year to assist in preparing for the new regime.
The overview outlines the outcomes the CMA aims to achieve and the issues it will address, accompanied by 11 principles governing its digital markets role. The digital markets competition regime will be applicable only to firms designated by the CMA after an evidence-based investigation and public consultation, identifying them as having Strategic Market Status (SMS) in specific digital activities.
The CMA plans to initiate 3 to 4 SMS investigations within the first year of the regime, taking targeted and proportionate action if businesses exploit their status for unfair competitive advantage. Possible measures include imposing conduct requirements on SMS firms, such as preventing preferential treatment of their products, enhancing access for competitors, or ensuring transparency in algorithms.
Stakeholder engagement is deemed crucial for the regime's success, and the overview release coincides with a senior CMA delegation visiting the US West Coast to brief major digital firms on the new regime and gain insights into their operations.
Sarah Cardell, Chief Executive of the CMA, highlighted the importance of competitive digital markets as drivers for investment and innovation. She highlighted the commitment to a targeted, evidence-based, and proportionate approach, aiming to facilitate tech challenger firms in bringing disruptive innovations to market. Cardell highlighted the need for ongoing engagement with a wide range of stakeholders to ensure effective operation.
As the Digital Markets, Competition and Consumers Bill progresses through Parliament, the CMA plans to release more detailed draft guidance for consultation, providing clarity on its operational approach and inviting stakeholder input.
