UK Digital Markets Watchdog Expects To Launch Investigations Within The Month Using New Powers

The UK market regulator said it would take a “participative” approach to exercising its new powers under the legislation designed to curb the market power of tech giants and promote growth.

The CMA has set out plans for how it will use the Digital Markets, Competition and Consumers Act which came into force on 1 January 2025 by saying it would use powers to fine big tech companies abusing their market power — nominally a maximum of 10 percent of global revenue. However, The Register understands the regulator sees fines as "a backstop" and would rather resolve legal compliance in advance of such measures.

Under the new competition law, the CMA said it would designate companies with "Strategic Market Status" or SMS in relation to their digital activities. The status is designed to capture the largest companies and specific activities within them. Once designated, the status would then allow the CMA to impose conduct requirements tailored to each company and/or activity.

For example, if an online marketplace with SMS was found to be using its sellers' data to give it an unfair advantage, a conduct requirement could prevent it from using the data in a certain way, or compel it to use the data more fairly.

Also within the CMA's arsenal will be pro-competition interventions, which can be imposed following a nine month investigation. A PCI might apply to preventing apps or services from a rival from working on its platform and force the platform provider to be more open, benefitting UK businesses and consumers.

The EU has already introduced legislation in this area. Its Digital Markets Act applies to companies who act as gatekeepers of online services and are designed to ensure equal access for some third-party software.

In June last year, the European Commission published preliminary findings that accuse Apple of breaching the DMA by preventing developers from telling customers about options outside the App Store. Apple later performed an abrupt U-turn by approving the Epic Games Store in the European Union.

• Game of phones: Voda-Three merger left rivals dialing for help
• Microsoft reshuffles execs in Europe, Middle East and Africa unit
• Dutch watchdog wants more powers after EU drops Microsoft Inflection probe
• Apple accused of hoodwinking UK antitrust cops

The UK's law addresses many of the same objectives as the DMA but does not pre-designate "gatekeepers" of online services.

Despite the new powers the CMA has acquired in the UK, it faces a huge imbalance in resources compared with the tech giants its hopes to restrain from anti-competitive behavior. In the 2023/24 financial year, its total expenditure was £147.20 million ($184 million). That's less than 0.1 percent of Apple’s annual revenue, for example. ®