CMA Unveils Exciting Blueprint for New Digital Markets Competition Era

The Competition and Markets Authority (CMA) has today announced its preliminary strategies for the new digital markets competition framework. This framework aims to unlock possibilities for greater innovation, investment, and expansion within the UK’s technology sector. Additionally, it will support individuals and enterprises across the UK that rely on vital digital markets for accessing or providing goods and services to obtain equitable terms.    

The Digital Markets, Competition, and Consumers Act received Royal Assent in May 2024, with the digital markets competition framework becoming effective as of 1 January 2025. The CMA published guidance for businesses, advisors, and other relevant parties regarding its substantive and procedural approach on 19 December 2024. Furthermore, the CMA has unveiled a straightforward ‘explainer’ guide regarding the new framework today.  

Within the digital markets competition framework, the CMA has the authority to designate companies with “Strategic Market Status” (SMS) concerning a specific digital activity. Following this designation, the CMA can enforce conduct requirements or initiate pro-competition interventions to foster beneficial outcomes for consumers and businesses in the UK.   

The CMA is dedicated to executing the framework in a transparent, open, proportionate, and predictable manner—progressing swiftly while guaranteeing a just process. Today, they have detailed anticipated actions for the initial 6 months, which include the expected commencement of SMS designation investigations concerning two areas of digital activity in January. More comprehensive announcements regarding these will be provided later this month.  

The CMA foresees a brief pause prior to initiating the upcoming investigation into a third area of digital activity, likely towards the conclusion of the first 6 months of the new framework. This allows the CMA to effectively manage its resources while upholding its vow to run the framework in a proportionate manner without imposing excessive burdens on key stakeholders (many of whom have interests across various potential SMS investigations).  

Every designation investigation is required to be concluded within a statutory timeframe of 9 months. The CMA anticipates consulting on an initial set of proposed conduct requirements concurrently with these investigations. This will facilitate prompt action and enable the benefits to be experienced swiftly by individuals and businesses throughout the UK.  

The CMA will furnish further details on how individual designations can enhance outcomes for both businesses and consumers as their investigations commence. The new framework could, for instance: 

• Prevent major firms from favoring their services or leveraging their access to customer data to gain an undue advantage, thereby sidelining smaller competing entities. 

• Facilitate easier transitions for individuals switching digital service providers without sacrificing access to data or content.  

• Ensure that businesses reliant on significant digital ecosystems have the necessary data and functionalities to innovate and introduce new products and services to the market. 

• Encourage increased investment and innovation, thus promoting growth by enabling more effective competition—both among different SMS designated firms and with numerous smaller UK businesses that compete against them. 

Sarah Cardell, the Chief Executive of the CMA, stated:  

The new digital markets competition framework presents a distinctive chance to leverage the advantages of investment and innovation from the most prominent digital firms while ensuring equitable opportunities for the numerous start-ups and scale-ups within the UK tech sector. It will guarantee that the multitude of UK businesses and consumers dependent on these large firms for essential products and services gain from increased innovation, greater choice, and more competitive pricing. 

We are committed to delivering successes for the UK through this framework—driving advantages for UK consumers and businesses while fostering investment, innovation, and growth across the UK tech sector. The framework has been meticulously crafted to ensure that the UK remains aligned with future developments and maximizes its global appeal to innovators and investors in these dynamic markets.  

We are dedicated to implementing the framework in a predictable and proportionate manner, progressing swiftly while upholding a fair process. Today’s announcement regarding our intention to commence SMS investigations related to three distinct digital activities within the first 6 months begins to provide that predictability. The process for designing any interventions will also be collaborative and transparent, aiming to sustain market innovation while involving firms in this journey with us.

Notes to Editors:

1. Further information can be accessed via the CMA’s digital markets competition framework explainer page. 
2. The CMA has not yet confirmed the specific digital activities in which it will initiate its first Strategic Market Status investigations. This information will be disclosed in due time as each investigation launches. 
3. Since the legislation was first presented to Parliament, the CMA has endeavored to prepare for the initiation of the digital markets competition framework. This preparation included publishing comprehensive guidance in December.
4. As a part of these preparations, the CMA established its Digital Markets Unit (DMU), which has been functioning in a shadow capacity since 2021, during which it has developed extensive capability and expertise in digital markets. The CMA also appointed 9 technology specialists in 2023 to assist in readying for the new framework. 
5. In January (2024), the CMA released an overview document that outlined its general approach to the digital markets competition framework. 
6. The new digital markets competition framework, now effective in the UK, follows the enactment of the Digital Markets Act in Europe. 
7. As a testament to the CMA’s commitment to transparency and accountability, Sarah Cardell (Chief Executive of the CMA) and Will Hayter (Executive Director, Digital Markets) are today presenting before the House of Lords Communications and Digital Committee to respond to inquiries regarding the new framework. 
8. For media inquiries, reach out to the CMA press office at 020 3738 6460 or [email protected].