The Competition and Markets Authority (“CMA”) has issued a press release setting out its plans for the upcoming months, after the new digital markets competition regime under the Digital Markets, Competition and Consumers Act 2024 came into force on 1 January 2025.

The press release explains that the new regime (on which we have commented here) 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 central feature of the new regime is that the Digital Markets Unit of the CMA is empowered to designate organisations as having ‘strategic market status’ (or ‘SMS’) if they have “substantial and entrenched market power” and a “position of strategic significance” in respect of a digital activity. That designation will only take place once the CMA has concluded an ‘SMS investigation’ (which will last 9 months and investigate matters such as whether a firm has achieved a position of significant size or scale in respect of the digital activity and whether its position in respect of the digital activity would allow it to extend its market power to a range of other activities.). Designated firms may then be subject to specific ‘conduct requirements’ (“CRs”) tailored by the CMA and, in certain cases, to ‘pro competition interventions’ (“PCIs’”), enabling the CMA to implement measures that address the root causes of entrenched market power.

In its press release, the CMA states that it expects to “launch SMS designation investigations in relation to two areas of digital activity in January”. No further information is provided, although the CMA has since announced an SMS investigation into Google’s general search and search advertising services. A further investigation into a third area of digital activity is expected to take place within the next six months.

Alongside the press release, the CMA has published updated guidance on how the new digital markets competition regime will work, explaining matters such as: the regime’s intended benefits; the criteria for Strategic Market Status; the stages of an SMS investigation; and how the CMA will administer the regime. The guidance is a user-friendly and much-condensed version of the considerably more detailed guidance that was published by the CMA at the end of last year (see here).

Commenting on the new regime coming into force, 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 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.”

To read more, click here.