Consultation Response: a New Pro-competition Regime for Digital Markets

This is a joint statement with the Secretary of State for Business, Energy and Industrial Strategy.

Last week, we published the response to the consultation on a new pro-competition regime for digital markets. As we move to build back better from the pandemic and level up opportunities throughout the UK, unlocking growth in the digital economy has never been more important or urgent.

Digital technologies make an enormous contribution to the UK economy and are positively transforming our daily lives. However, weak competition in digital markets is stifling economic growth and imposing unnecessarily high costs on British businesses and consumers. That is why the Government have committed to establishing a new pro-competition regime for these markets. This will boost competition, drive innovation, and protect those people and businesses that rely on a very small number of immensely powerful tech firms.

Our regime will be able to place obligations on these firms to make it easier for users to communicate across different platforms, switch to smaller providers and deliver new, better alternatives for consumers. The Digital Markets Unit will also introduce clear rules on how the most powerful tech firms should treat businesses and consumers when delivering key services such as social media and online search. These rules will make sure these tech firms are transparent and trade on fair and reasonable terms.

Competition is key to unlocking the full potential of the digital economy as more choice will lower prices for everyday goods and services that rely on online advertising. Countries around the world are developing their policy and regulatory approaches. Now that we have left the EU, we have the freedom to take a bold new approach to regulation in order to ease burdens for businesses, boost competition and help drive a new era of productivity and prosperity for all the UK’s communities and nations. The UK is leading the global debate, as demonstrated during our G7 presidency last year where countries agreed to deepen international co-operation. Last week’s publication set out how the new regime will deliver a world-leading, innovation-friendly approach to driving up competition in digital markets.

The set-up of the Digital Markets Unit last year was a major milestone in delivering the regime. We want to maintain this momentum. We set out the design of the regime in our public consultation which closed on 1 October 2021. We received a large number of submissions to our consultation including from trade associations, the tech sector, SMEs, academics, consumers and representative groups. There is strong support for the regime and growing calls for it to be delivered urgently.

This response builds on the consultation and sets out how the regime will work. In particular:

The new pro-competition regime will be overseen and enforced by the Digital Markets Unit (DMU), housed within the Competition and Markets Authority (CMA). The regime’s core objective will be to promote competition in digital markets for the benefit of consumers, lowering prices and increasing transparency and fairness. The DMU will work closely with other regulators through a statutory duty to consult them where proportionate and relevant.