Publication of the Digital Markets Taskforce advice to Government on a new pro-competition regime for digital markets

The Digital Markets Taskforce has published a report advising Government on the design and implementation of a new pro-competition regime for digital markets.

The CMA urges Government to move quickly in taking this legislation forward and stands ready to help establish the key elements of the regime - such as the designation of ‘strategic market status’ (SMS) and developing guidance on how the recently announced Digital Markets Unit (DMU) will carry out its work.

This advice follows the recent Digital Competition Expert Panel, chaired by Jason Furman which proposed a new regime for digital platform markets. To move forward with the proposals, the Digital Markets Taskforce (DMT) was set up in the CMA to “provide expert advice on the functions, processes and powers which may be needed to deliver on objectives in a proportionate and efficient way”.

 

In this report, the taskforce offers recommendations on the functionality of the DMU, developing a pro-competition framework for SMS firms and supporting a coherent digital regulatory landscape.

The taskforce advises that the DMU becomes a “centre of expertise and knowledge in relation to competition in digital markets”, playing an important role in designating SMS, establishing an enforceable code of conduct for firms and monitoring activity in an open and transparent manner. The taskforce does not explicitly make clear which firms are to be designated SMS and how this might change in different markets, but it does outline a ‘SMS test’ and suggests that this will be satisfied by “a relatively small number of firms”.  

Other measures recommended by the taskforce include significant reforms to the markets regime to ensure it promotes both innovation and competition, for example by pursuing measures like data mobility and interoperability. Additional merger control requirements are also advised for SMS firms and the need for international and domestic collaboration is emphasised throughout.

 

techUK welcomes today’s advice from the Digital Markets Taskforce as an important step in carving the way for how the UK plans to form a pro-competitive regime which supports innovation and open competition in digital markets.

We are pleased to see reference to why it is so important for the DMU to have a detailed understanding of how digital businesses operate in different digital markets in order to “drive competition and innovation and prevent harm”, as well as the overall intention for effective, coherent and evidence-led regulation. Building on the CMA’s consultative approach and taking the time needed to consider some of the more challenging questions in different markets, coupled with providing coherence across the board of digital regulators, will be beneficial to form an effective and proportionate framework.

We look forward to continuing our work with the CMA and Government on the development of the Digital Markets Unit and some of the key elements of the pro-competition regime, supporting a balanced approach to address some of the important unresolved questions for our members.

 

Lulu Freemont

Lulu Freemont

Policy Manager, Digital Regulation, techUK