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Digital developments in focus
| 1 minute read

UK government consulting on new "world-leading" pro-competition regime for digital markets

The UK government is seeking views on its proposed pro-competition regime for digital markets. This is the latest step towards establishing a new regulatory regime for digital markets in the UK, and builds on the recommendations in the Furman Review and advice from the Digital Markets Taskforce.

Under the proposals, the Digital Markets Unit (which will be put on a statutory footing, having operated in shadow form since April) will be able to designate tech firms with substantial and entrenched market power as having 'Strategic Market Status', or 'SMS'. Such firms will have to comply with a mandatory code of conduct, backed up by robust enforcement powers (including fines of up to 10% of turnover for the worst breaches). 

The Unit may also be able to suspend, block and reverse behaviour in breach of the code, or order specific actions to force these firms to comply (including on an interim basis). 

The consultation will also consider whether the DMU should be able to impose measures to tackle the sources and effects of SMS firms' market power - for example, by introducing measures to support interoperability or data access, or separation remedies.

Consideration is also being given to whether SMS firms should be subject to greater merger control scrutiny - for example, by being required to report all deals to the CMA. The proposals would also see the introduction of a transaction value threshold for SMS mergers, mandatory, suspensory notification for the largest SMS deals, and a lowering of the Phase 2 threshold for intervention in SMS mergers.

The consultation is open until 1 October 2021. The government will then publish a response to the consultation before legislating to put the regime on a statutory footing.

"Today we are taking action to open competition in digital markets to make it fairer for smaller businesses, entrepreneurs, and the British public."


competition, regulating digital

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