CMA Unveils New Digital Markets Regulation Strategy

The Competition and Markets Authority (CMA) is the UK's leading authority on competition and consumer protection, responsible for merger control and enforcing competition laws. With the UK's exit from the EU, the CMA's role has expanded, particularly in reviewing global deals and anti-competitive conduct affecting the UK market.

In response to the rapid growth of the digital sector and concerns over market power concentration among a few tech firms, the UK government is introducing a new pro-competition regime for digital markets. This initiative follows recommendations from a Digital Competition Expert Panel, which suggested updating merger and antitrust enforcement rules to better address challenges posed by digital markets.

The proposed Digital Markets, Competition and Consumers Bill (DMCC Bill) will empower the CMA to designate firms with Strategic Market Status (SMS) and implement Conduct Requirements and Pro-Competition Interventions. This targeted approach aims to prevent harmful practices, promote competition, and ensure that challenger firms can innovate effectively.

The CMA has outlined its commitment to a targeted, evidence-based approach in implementing the new regime, emphasizing the importance of stakeholder engagement and collaboration with SMS firms. The authority plans to initiate several SMS investigations shortly after receiving the necessary powers.

Additionally, the CMA is actively engaging with stakeholders in the AI sector, focusing on the competitive landscape of AI foundation models. The authority has proposed guiding principles to ensure that the development and deployment of AI technologies promote competition and protect consumers.



The CMA's approach to digital markets regulation

The Parliamentary Under Secretaries of State at the Department for Business and Trade and the Department for Science, Innovation and Technology wrote to the Competition and Markets Authority (CMA) asking it to set out its plans and proposed timelines to implement the new Digital Markets competition regime as envisaged under Part 1 of the Digital Markets, Competition and Consumers Bill.

UK Government Requests CMA's Plans for Implementing Digital Markets Competition Regime

The UK government has written to the CMA, requesting information on its plans and proposed timelines for implementing the Digital Markets competition regime outlined in the Digital Markets, Competition and Consumers Bill. The regime aims to regulate the conduct of digital platforms with significant market power, ensuring fair competition and protecting consumers. The letter from the government seeks clarity on the CMA's approach and the steps it will take to enforce the new regime. This development highlights the government's commitment to addressing competition concerns in the digital sector and promoting a level playing field for all market participants.

Ministers ask the CMA to set out plans for implementing the Digital Markets competition regime

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.

CMA outlines approach to new digital markets competition regime

The CMA has detailed the principles that will guide its approach to the new digital markets competition regime, including tailoring actions to specific problems, engaging with stakeholders, and operating with transparency. The regime will apply to firms designated with Strategic Market Status (SMS) in relation to digital activities, and the CMA plans to start 3 to 4 SMS investigations within the first year. The CMA will take targeted and proportionate action to address unfair competitive advantage, such as imposing conduct requirements on designated firms. Stakeholder engagement is crucial, and the CMA is visiting major digital firms in the US to explain the regime and gain a deeper understanding of their businesses. Once the DMCC Bill is passed, the CMA will release more detailed draft guidance for consultation.

CMA sets out approach to new digital markets regime

The Parliamentary Under Secretaries of State at the Department for Business and Trade and the Department for Science, Innovation and Technology wrote to the Competition and Markets Authority (CMA) asking it to set out its plans and proposed timelines to implement the new Digital Markets competition regime as envisaged under Part 1 of the Digital Markets, Competition and Consumers Bill.

The CMA has responded confirming that it will publish a document in line with the request in due course.

The UK government has written to the CMA, requesting details on how it plans to implement the Digital Markets competition regime outlined in the Digital Markets, Competition and Consumers Bill. The CMA has confirmed that it will publish a document in response to the request. This development has implications for companies operating in the digital markets sector.

The Competition Appeal Tribunal (CAT) dismissed both grounds of Motorola’s appeal, which incorrectly claimed that the Competition and Markets Authority (CMA) had made errors in assessing competition in the relevant market and the profitability of the Airwave Network.  The CMA’s order will now ensure that the UK’s emergency services pay a fair price, and this will reduce the current price by almost £200 million per year.

Martin Coleman, chair of the independent panel of experts conducting this investigation, said:


  Our investigation showed that Motorola held all the cards when it came to pricing. With no other providers in the market, our fire, police, and ambulance services had no choice but to pay the rates set by Motorola – meaning they paid almost £200 million a year more than they would have if the market was working well.  

  Our price cap puts a limit on how much Motorola can now charge for the use of its Airwave Network. This ensures lower prices for these key services – and ultimately less cost for taxpayers – while allowing Motorola to invest in the network to ensure that quality and safety are maintained.


In October 2021, the CMA opened an investigation into mobile radio network services amid concerns that the market might not be working well. The investigation – conducted by an independent group of experts – confirmed these concerns, finding that UK emergency services currently have no choice but to continue using Motorola’s Airwave Network, due to a lack of alternative providers. As such, Motorola charged the Home Office – which negotiates contracts on behalf of emergency services – prices well above competitive levels, resulting in higher costs to the emergency services which are ultimately footed by taxpayers.   

To reduce these costs, the CMA imposed a price cap in July 2023, which brought the price down to a level that would be expected in a well-functioning and competitive market – putting an end to the estimated £200 million per year of over-charging.  

While protecting taxpayers, the price cap allows Motorola to continue to invest in the Airwave Network and so ensure that quality and safety are maintained. 

Motorola disagreed with the CMA’s findings – specifically that the price of the Airwave Network services was not limited by competition and on the level of profit they make from the Airwave Network – and so challenged them at the CAT. Following a hearing in August 2023, the judgment was handed down today.  

The CAT unanimously dismissed both of Motorola’s grounds of challenge.

For more information, visit the Mobile radio network services inquiry page. 

For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.

CMA Successfully Defends Price Cap in Emergency Services Case

The CMA's investigation found that Motorola had a monopoly in the market for mobile radio network services used by UK emergency services, resulting in inflated prices. The CMA imposed a price cap in July 2023 to bring the prices down to competitive levels, saving taxpayers millions of pounds. Motorola challenged the CMA's findings, but the CAT dismissed the appeal, upholding the price cap. This decision will allow Motorola to continue investing in the network while ensuring quality and safety for emergency services.