CMA to probe tech giants using new powers
Expected to focus on Apple and Google's mobile monopolies
The move by the Competition and Markets Authority (CMA) marks the first use of its newly acquired powers over the largest tech firms.
The landmark Digital Markets, Competition, and Consumers Act (DMCCA), which came into effect on 1st January, aims to unlock innovation, investment, and growth within the UK tech sector while ensuring fair treatment for businesses and consumers reliant on critical digital markets.
The regime empowers the CMA to designate firms with "Strategic Market Status" (SMS) in specific digital activities.
Once designated as holding SMS, firms may be subject to conduct requirements or pro-competition interventions aimed at fostering a more level playing field.
SMS designation is reserved for the most influential tech giants, triggering closer scrutiny of their activities.
The CMA has announced two imminent investigations under the regime, widely expected to focus on Apple and Google's dominance within mobile ecosystems.
The regulator has previously expressed concerns about Apple's potential to hinder innovation in smartphone browsers. It has also signalled its intention to investigate Apple and Google’s mobile ecosystem duopoly using its new authority.
"Markets work best when rival businesses are able to develop and bring innovative options to consumers," Margot Daly, chair of the CMA's inquiry group, said in November.
The CMA expects to unveil the specific areas of the two investigations later this month, and will initiate a third probe after approximately six months. Each investigation will be conducted in a statutory timeframe of nine months.
The DMCCA equips the CMA with tools to address concerns like self-preferential practices by large firms, unfair use of customer data, and barriers to competition.
Companies with SMS designations may face measures like mandatory data-sharing with competitors, prohibitions against promoting their own services over others and requirements to enable easier switching between service providers.
The Digital Markets Unit (DMU), established by the CMA, will play a significant role in implementing the new regime, drawing upon the expertise of its appointed tech experts.
Since the UK's departure from the European Union, the CMA has assumed a more prominent role in merger control. Prime Minister Keir Starmer has recently highlighted the importance of growth for the CMA, urging the regulator to prioritise this objective.
The CMA says the new regulatory framework aims to enhance the UK's attractiveness to tech companies while also safeguarding consumer choice and promoting competitive pricing within the digital marketplace.
CMA CEO Sarah Cardell said the new regime aims to foster innovation while ensuring fairness.
"It will ensure that the multitude of UK businesses and consumers who depend on these large firms for critical products and services benefit from more innovation, more choice and more competitive prices.
"The regime has been carefully designed to ensure that the UK keeps pace with future developments and maximises its international attractiveness to innovators and investors in these dynamic markets."