The Competition and Markets Authority (CMA) has published a consultation on draft rules on how it will set the levy that SMS firms must pay under the digital markets competition regime.

The levy will only apply to those firms with the SMS (or ‘Strategic Market Status’) designation, meaning those that have a UK turnover of more than £1 billion or global turnover of more than £25 billion, and are found by the CMA at the conclusion of a nine month investigation to have both ‘Substantial and Entrenched Market Power’ and a ‘Position of Strategic Significance’ in a particular digital activity.

The CMA is charged with considering and proposing a methodology for how to apportion the levy among SMS firms, and the consultation outlines the three options that the CMA considered: (i) a turnover-based approach whereby the levy is divided proportionate to the turnover of SMS firms; (ii) dividing the levy according to the number of designations for particular activities held by each firm; and (iii) dividing the levy evenly between the number of firms designated as SMS firms.

Ultimately, the CMA has concluded that the third option is the most fair and easiest to administer. This means that for each year the CMA will calculate the levy based on the cost of exercising its functions, divide it by 12 to determine the average monthly levy, and then divide that figure among SMS firms.

The CMA invites views on its proposed approach to the levy. The consultation closes on 3 July 2025, and can be read in full here.