Last week, the Competition and Markets Authority (CMA) set out its initial plans for the new digital markets competition regime. The regime is designed to support the UK’s tech sector and has its legal footing in the Digital Markets, Competition and Consumers Act. The Act received royal assent in May 2024 but came into force on 1 January 2025.
The regime is intended to prevent very large, generally global, tech firms using unfair advantages to shut out smaller businesses. Following an investigation, which can take up to a maximum 9 months, the CMA has the power to designate a business as having “Strategic Market Status” (SMS) in relation to a particular digital activity.
Once a business has been designated in this way, the CMA can impose certain conduct requirements on the business, or it can introduce pro-competition interventions for the benefit of UK consumers and businesses.
The CMA have said that they expect to launch investigations in relation to 2 areas of digital activity in January. The next investigation into a third area is likely to begin towards the end of June.
It has not yet been revealed which areas of digital activity are going to be investigated. The CMA have said more detailed announcements on this will be released later in January.
As it launches its investigations, the CMA also plan to provide more detail on how a particular designation is likely to help affected businesses and consumers.
It’s early days for seeing what practical benefits the regime will bring, however it could provide UK tech businesses with opportunities to innovate and grow in a fairer business environment.
To review the CMA’s guide on how the UK’s digital markets competition regime works, see: https://www.gov.uk/guidance/how-the-uks-digital-markets-competition-regime-works
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