CMA announces initial plans for implementing the new digital markets competition regime

Within days of the new digital markets competition regime under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) coming into force on 1 January 2025, the Competition and Markets Authority (CMA) has set out its initial plans for the first six months of the regime.

Whilst more detail is yet to come, its initial plans provide some important insights into how the CMA is likely to approach implementation of the new regime. In this briefing, we summarise the key takeaways for all businesses in the UK who use any of the services of the largest digital platforms (eg, Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft).

CMA’s plans for initial designation investigations  

Under the DMCCA, the Digital Markets Unit (DMU) within the CMA has the power to designate firms with substantial and entrenched market power and a position of strategic significance in respect of a digital activity, as having Strategic Market Status (SMS). Once designated, SMS firms may be subject to tailored Conduct Requirements (CRs) and pro-competition interventions. For more information, we have published two additional articles discussing the new regime, which can be found through the following links: A new dawn for competition law investigations in the UK and New year, new competition rules for digital markets in the UK.

The CMA has said that it will launch SMS designation investigations in relation to two areas of digital activity in January 2025 and to launch the next investigation into a third area of digital activity towards the end of June 2025. On 14 January 2025, the first of these was launched: a SMS investigation into Google’s general search and search advertising services. We await details of the other two investigations, although as the CMA previously indicated that its initial focus would include mobile ecosystems (in addition to search and digital advertising), we expect that this area should be covered by one of these investigations.

Each investigation is likely to take nine months, alongside which the CMA plans to consult on an initial set of proposed CRs. For example, in the SMS investigation into Google’s general search and search advertising services, the invitation to comment outlines initial views on the potential issues in relation to which the CMA may consider making interventions if the CMA decides to designate Google as having SMS.  

The DMCCA imposes a duty of expedition on the CMA which requires it to take action as soon as reasonably practicable when exercising its digital markets powers. However, the SMS designation investigations will be complex so, whilst the CMA will aim to complete the investigations as quickly as possible, it has said that they may take most of the nine months.

Staggered consultations and stakeholder engagement

The CMA’s decision to adopt a staggered approach to SMS designations is intended to ensure that it operates the regime in a proportionate way, both from the perspective of managing the CMA’s resources and administrative processes, but also to minimise the burden on stakeholders.

By recognising and attempting to mitigate the burden on smaller organisations in particular, the CMA demonstrates that it's expecting and wanting organisations of all sizes (not just challenger firms or larger business users) to engage with the designation process. This is consistent with the CMA’s aim to adopt a participative approach to implementing the new regime. The CMA has said that it will assume that larger firms will openly offer their views on CRs, but it will specifically seek out the views of smaller firms. This may take the form of issuing invitations to comment; invitations to participate in workshops or surveys and/or formal information requests. The CMA’s duty of expedition may mean tight timelines for responding to formal information requests and a reluctance to grant requests for extensions. It's, therefore, important that any recipient of a formal information request immediately contacts a competition lawyer for advice.

The CMA’s focus on adopting a participative approach means that SMS designation investigations and CR consultations also represent an invaluable opportunity for stakeholders to proactively engage with the CMA and contribute to the regulation of designated firms in ways which may offer opportunities and improve their own ability to compete more effectively. Any business that may be affected by an investigation or have relevant information should, therefore, consider early engagement with the CMA. Obtaining advice from a competition lawyer will help ensure that any such engagement is undertaken in a way which best protects any commercial interests (like protecting an ongoing business relationship with a designated firm).

Key points for stakeholders engaging with the CMA

To make the most of the opportunity that the imminent SMS designation process and CR investigations presents for stakeholders, businesses of all sizes should:

• Familiarise themselves with the CMA’s processes and timelines
• Stay informed on upcoming investigations and consultations
• Consider proactively engaging with the CMA throughout the CMA’s processes; there are likely to be a range of opportunities
• Upon receipt of a formal information request, immediately contact a competition lawyer for advice

Our competition team can provide invaluable insights and help you to navigate the complexities of the new regime (whether you're looking to improve your understanding, engage with the CMA or review your business practices), so please feel free to contact a member of the team for more information.

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