The Competition and Markets Authority has set out its initial plans for the new digital markets competition regime.
The Digital Markets, Competition and Consumers Act received Royal Assent in May 2024 and the new digital markets competition regime came into force on 1 January 2025. The CMA issued guidance about its substantive and procedural approach on 19 December 2024.
Under the digital markets competition regime, the CMA may designate firms with “Strategic Market Status” (SMS) in relation to a particular digital activity. Once designated, the CMA can impose conduct requirements or introduce pro-competition interventions aimed at achieving positive outcomes for UK consumers and businesses.
The CMA says that it is committed to implementing the regime in an open, transparent, proportionate and predictable way, moving at pace whilst ensuring a fair process. It has set out its planned activity for the first six months, including the expected launch of SMS designation investigations in relation to two areas of digital activity in January. It will make more detailed announcements on these later in the month.
Following a short pause, it expects to launch an investigation into a third area of digital activity. This is likely to be around June 2025. This is aimed at allowing the CMA to manage its resources in a timely and efficient way, while upholding its commitment to operate the regime in a proportionate manner without undue burden for key stakeholders (many of which have interests spanning multiple potential SMS investigations).
Each designation investigation must be completed within a statutory time limit of nine months. The CMA expects to consult on an initial set of proposed conduct requirements in parallel with these investigations. The CMA will provide more detail on how individual designations may improve outcomes for businesses and consumers as it launches its investigations. The new regime could, for example:
- Prevent large firms from preferencing their own services or using their access to customer data to give themselves an unfair advantage, shutting out smaller competing businesses.
- Make it easier for people to switch digital service providers without losing access to data or content.
- Ensure businesses that depend on major digital ecosystems can access the data and functionality they need to innovate, and to bring to market new products and services.
- Stimulate more investment and innovation, and so drive growth, by enabling more effective competition – both between different SMS firms and with the many smaller UK businesses that compete with them.
The CMA is not yet confirming in which specific digital activities it will launch its first Strategic Market Status investigations. This detail will come in due course as each investigation is launched.
