CMA sets out initial plans as new digital markets competition regime comes into force
Source: gov.uk (2025-01-07)

CMA expects to launch strategic market status investigations in 3 areas of digital activity over first 6 months.

The Competition and Markets Authority (CMA) today set out its initial plans for the new digital markets competition regime. The regime will unlock opportunities for enhanced innovation, investment and growth across the UK tech sector. It will also enable people and businesses across the UK, who depend on critical digital markets to access or offer goods and services, to get a fair deal.

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. Guidance for businesses, advisors and other stakeholders on the CMA’s substantive and procedural approach was published on 19 December 2024. The CMA has also today made available a simple ‘explainer’ guide to the new regime.

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 to achieve positive outcomes for UK consumers and businesses.

The CMA is committed to implementing the regime in an open, transparent, proportionate and predictable way – moving at pace whilst ensuring a fair process. Today, they have outlined planned activity for the first 6 months, including the expected launch of SMS designation investigations in relation to 2 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 6 months of the new regime. This allows 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 9 months. The CMA expects to consult on an initial set of proposed conduct requirements in parallel with these investigations. This will help ensure that action can be taken, and the benefits felt, as quickly as possible by people and businesses across the UK.

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 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.

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.

Sarah Cardell, Chief Executive of the CMA, 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.

We are committed to implementing the regime in a way that is predictable and proportionate, moving at pace whilst respecting fair process. Today’s announcement that we intend to launch SMS investigations in relation to 3 distinct digital activities in the first 6 months starts to provide that predictability. The process for designing any interventions will also be participative and transparent, with the aim of keeping innovation-led markets open and bringing firms on the journey with us.

Notes to Editors:
- More information can be found via the CMA’s digital markets competition regime explainer page (https://www.gov.uk/guidance/how-the-uks-digital-markets-competition-regime-works).
- 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.
- Since legislation was first introduced to Parliament the CMA has worked to prepare for the start of the digital markets competition regime. This included publishing detailed guidance (https://www.gov.uk/government/publications/digital-markets-competition-regime-guidance) in December.
- As part of these preparations the CMA established its Digital Markets Unit (DMU), which has been operating in shadow form since 2021 and in that time has been building significant capability and expertise in digital markets. The CMA also appointed 9 tech experts in 2023 and they have been assisting the CMA in preparing for the new regime.
- Last January (2024) the CMA also published an overview paper (https://www.gov.uk/government/publications/overview-of-the-cmas-provisional-approach-to-implement-the-new-digital-markets-competition-regime) which set out its broad approach to the digital markets competition regime.
- The new digital markets competition regime – now in force in the UK – follows the implementation of the Digital Markets Act in Europe.
- Reflecting the CMA’s commitment to transparency and accountability, Sarah Cardell (CMA Chief Executive) and Will Hayter (Executive Director, Digital Markets) are today appearing before the House of Lords Communications and Digital Committee to answer questions about the new regime.
- For media enquiries, contact the CMA press office on xx-xxxx-xxxx or xxx@xxx.xx (mailto:xxx@xxx.xx).