New measures to block tech giants from using their huge banks of customer data to give themselves an unfair business advantage – and promote their own services over rivals’ – are among the leading proposals in the UK’s new digital markets competition regime, set to be implemented in the coming months.
The move comes as the Competition & Markets Authority outlines its strategy under the Digital Markets, Competition & Consumers Act, which received Royal Assent in May 2024 and came into force on January 1 2025. The legislation has already received the backing of the marketing industry.
The regime is aimed at unlocking opportunities for enhanced innovation, investment and growth across the UK tech sector, while enabling consumers and businesses across the UK, who depend on critical digital markets to access or offer goods and services, to get a fair deal.
Guidance for businesses, advisors and other stakeholders on the CMA’s substantive and procedural approach was published on December 19 2024. The CMA has also made available a simple ‘explainer’ guide to the new regime.
The proposals bring the UK in line with the EU’s Digital Services Act and Digital Markets Act, which form a single set of rules that apply across the whole trading bloc. They have two main goals to create a safer digital space in which the fundamental rights of all users of digital services are protected; and to establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally.
Consequently, the CMA plans to 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 to achieve positive outcomes for UK consumers and businesses.
The CMA insists it is committed to implementing the regime in an open, transparent, proportionate and predictable way – moving at pace while ensuring a fair process. Today, it has outlined planned activity for the first 6 months, including the expected launch of SMS designation investigations in relation to two areas of digital activity in January. More detailed announcements on these will follow later in the month.
The CMA expects a short pause before launching the next investigation into a third area of digital activity, likely towards the end of the first six months of the new regime. This, the regulator claims, allows it 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”.
However, also among the proposals for the new regime is a plan to make it easier for consumers to switch digital service providers without losing access to data or content.
It also wants to ensure businesses that are dependent on major digital ecosystems can access the data and functionality they need to innovate, and to bring to market new products and services.
And finally it wants to 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.
CMA chief executive Sarah Cardell said: “The new digital markets competition regime provides a unique opportunity to harness the benefits of investment and innovation from the largest digital firms whilst ensuring a level playing-field for the many start-ups and scale-ups across the UK tech sector.
“It will ensure that the multitude of UK businesses and consumers who depend on these large firms for critical products and services benefit from more innovation, more choice and more competitive prices.
“We are committed to ensuring that this regime delivers for the UK – driving benefits for UK consumers and businesses while stimulating investment, innovation and growth across the UK tech sector. The regime has been carefully designed to ensure that the UK keeps pace with future developments and maximises its international attractiveness to innovators and investors in these dynamic markets.”
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