On Thursday 11 January 2024, the Competition and Markets Authority published their provisional approach to implement the new Digital Markets competition regime. The approach came in response to a Government letter requesting the plan sent on 4 January. techUK welcomed this as an opportunity to provide additional clarity for the regime, which techUK and our members had called for.
The below is a summary of the CMA's plan and techUK's analysis of the plans.
The CMA's Plan for the Pro-competition regime for Digital Markets
The CMA has outlined the broad principles for how they will implement the Digital Markets regime.
The 11 operating principles include:
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The DMU will tailor our actions to the specific problems we identify, considering their proportionality and likely effectiveness.
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The DMU will focus our actions where we can have the most impact for people, businesses and the economy.
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The DMU will measure our impact, outcomes and outputs. The DMU will learn from experience and use this to inform future decisions.
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The DMU will stay abreast of developments and seek to deal with harm quickly.
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The DMU will promote competition as the primary lever to deliver better outcomes for users.
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Where steps to improve competition alone will not deliver the outcomes to the extent or pace we seek, The DMU will prevent abuses of market power more directly.
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The DMU will seek to intervene in a technology-neutral way.
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The DMU will ensure the Digital Markets competition regime complements other CMA tools.
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The DMU will engage throughout with a wide range of stakeholders who are affected by or have an interest in our work.
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The DMU will operate with transparency.
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The DMU will work with our domestic and international counterparts to minimise unnecessary duplication.
These principles will underpin the draft guidance that the CMA aim to consult on after the Digital Markets, Competition and Consumers Bill receives Royal Assent. It is from these principles the CMA has outlined its proposals in part 5.15 that a Conduct Requirement will be tailored to each specific SMS firm. These are:
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Identifying the outcome the Conduct Requirement should achieve. Where the outcome is measurable, then this will be an outcome-focused requirement.
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If the outcome cannot be clearly assessed or an outcome-focused Conduct Requirement is not sufficient, an action-focused requirement will be used instead. This Conduct Requirement will still be regularly monitored and assessed.
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Action-focused conduct requirements will usually be set as higher-level requirements, allowing firms greater flexibility in implementation
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Where necessary, more detailed requirements may be imposed, most likely if a firm has failed to effectively comply with higher-level requirements.
The CMA recognises that engagement with wider market stakeholders will be essential for the regime's operation, particularly for intelligence-gathering and for ensuring compliance. As part of its wider engagement, the CMA plans to establish two representative panels, one for consumers and civil society, and one for businesses and investors.
The CMA also outlines plans to ramp up collaboration with other regulators. The CMA also reiterates that the DMU is bound by wider CMA confidentiality rules around whistleblowers to empower those companies experiencing potential anti-competitive practices to come forward.
In terms of next steps, the CMA gave no confirmation as to where it would focus first, but suggested it would build on its existing work on social media and search engines.
The CMA is also expected to consult on guidance shortly after Royal Assent of the Digital Markets Competition and Consumer (DMCC) Bill in order to ensure the regime is ready to be implemented in good time.
techUK analysis
The CMA's clarification of several important principles that will shape the future regime is welcome, and something techUK has called for.
techUK welcomes the CMA expanding its avenues for engagement through the two new advisory committees. Reporting on the DMU yearly as part of the CMA's annual report and workplan, as well as committing to further co-operation with other regulators, are also welcome.
The recruitment of 200 staff, and the consideration of innovative ways to retain them, also go a long way to providing the resource and expertise the CMA will require.
However, while techUK welcomes the general framework of the regime being outlined, we still await consultations on guidance which will inform much of the regime will work in practice.
techUK encourages the CMA to engage with consumer groups and businesses of all sizes and ahead of Royal Assent as it prepares to launch a series of consultations on guidance.