The UK’s new digital competition regime has been adopted. For the first time, this will regulate digital companies designated as having Strategic Market Status (SMS). The regime will be enforced by the specialist Digital Markets Unit in the CMA. The DMU will be able to impose a range of tailored remedies and have strong enforcement power (including criminal sanctions). This regime is similar to the EU’s Digital Markets Act which regulates “Gatekeepers”.
On 24 May 2024, the UK’s Digital Markets, Competition and Consumer Act (“Act”) received royal assent.
The Act establishes a new digital competition regime that will be overseen by the DMU within the CMA that will use a proportionate approach to tackle the challenges in digital markets. Firms designated as having SMS will be subject to:
Firms with substantial and entrenched market power in at least one digital activity (where this digital activity provides them with a strategic position) will be designated with SMS status by the DMU and will be subject to the new regime. This will apply where the CMA reasonably estimates that the undertaking’s UK turnover in the relevant 12-month period exceeds £1 billion or that its global turnover in the relevant period exceeds £25 billion. Only one of these thresholds needs to be met. If the undertaking is part of a group, then the turnover of the whole group should be considered.
The Act is expected to enter into force in the Autumn.
Written by Dr Saskia King and Anthony Rosen.
*Information is accurate up to 1 July 2024