The UK's Competition and Markets Authority (CMA) has outlined its strategic framework for regulating digital markets, asserting a commitment to pragmatic and proportionate interventions aimed at fostering competition and safeguarding consumers. The regulator emphasised that its approach is driven by a core purpose to benefit people and businesses across the UK.
A senior CMA official, reflecting on the challenges of regulating the world's most powerful economic entities, stated that the organisation's motivation is rooted in ensuring UK citizens have access to choices and innovative products, while companies operating in the UK receive a fair chance to succeed.
This mission is central to the CMA's new 2026-2029 Strategy, which aims to "promote competition and protect consumers to drive economic growth and household prosperity." The CMA highlighted the mutually reinforcing nature of these objectives, stating that effective competition supports the kind of growth that benefits households directly.
While acknowledging that competition often functions effectively, the CMA noted that market dynamics can sometimes lead to companies acquiring excessive power. This can result in limited consumer choice, stifled innovation, or unfair pricing and terms due to insufficient market discipline. In such instances, intervention becomes necessary.
The importance of digital platforms to the UK economy is vast, impacting hundreds of thousands of businesses, from sole traders to large corporations. App developers, cloud service customers, advertisers, website owners, fintech innovators, and software developers all rely on these platforms daily. The CMA aims to provide these businesses with the confidence to invest, knowing that competitive fairness is being upheld.
For consumers, the objective is access to quality products and services, the freedom to choose, and transparent market conditions that foster trust. The CMA official underscored that protecting UK businesses and consumers does not equate to disregarding the interests of large tech firms. The regulator wishes to see all firms, regardless of size or origin, thrive and continue to invest and innovate, provided it allows others to do so as well.
The legal framework for intervention mandates that actions must be both effective and proportionate, incorporating robust checks and balances to ensure evidence is reviewed thoroughly and all firms receive a fair hearing. This commitment to fairness and proportionality is seen as a cornerstone of the UK’s robust and agile digital markets competition regime.
The Digital Markets, Competition and Consumers Act is described by the CMA as an "exceptionally well designed legislative tool." While precise enough to establish boundaries, it offers the flexibility needed to adapt to evolving market realities. The CMA’s Digital Markets Unit (DMU) recently marked its fifth anniversary, though the legal framework under which it operates has only been in force for 18 months.
During the regime's development, the CMA observed divergent expectations, ranging from those who saw it as a panacea for business model challenges to others who feared it would create unbounded uncertainty. The regulator asserts that neither extreme proved accurate. Instead, the regime is materialising as a "smart, very well-designed mechanism to make flexible, targeted, proportionate interventions via a participative, iterative approach able to keep pace with evolving tech."
This approach aligns with the principles established in the 2019 Furman Review, which advocated for "engaged, agile and participative pro-competition regulation." The CMA reiterated its commitment to an implementation style that is pragmatic, determined, targeted, and flexible, rather than ideological, pugnacious, sweeping, or rigid.
The first conduct requirement imposed on Google regarding its search services serves as an example of this approach. It is tailored specifically to address the issue of publishers being unable to remove content from Google’s AI-driven search without also removing it from general search, thereby affecting their traffic. The new control, expected by 2026 with the advent of AI Overviews, allows publishers to make this choice and requires Google to attribute content it uses.
This intervention is designed to be timely and adaptable, recognising that relationships between Google and website owners continue to evolve, particularly with new AI functionalities. The CMA engaged extensively with Google for months on technical feasibility, while also consulting over 30 individual publishers and more than 50 diverse organisations to understand their needs.
While collaboration is key, the CMA stressed that it does not always agree with the firms it regulates. Adjustments were made to the conduct requirement between consultation and final rule in response to feedback from companies reliant on Google, demonstrating the regime's responsiveness to stakeholder input, ultimately prioritising UK consumer and business interests.
The CMA also highlighted its varied toolkit, stating a commitment to selecting the most effective intervention for each market issue rather than defaulting to a single approach. Success will be judged by positive aggregate impact and tangible benefits for UK people and companies, not by the volume of reports, rules, or fines issued.
Examples of alternative approaches include commitments secured from Apple and Google in relation to app store review, ranking, and data use, as well as a new interoperability process from Apple, all achieved without recourse to formal measures. Similarly, AWS and Microsoft are taking steps to facilitate switching and multi-cloud use, following CMA discussions. An SMS investigation into Microsoft's business software ecosystem is also underway, examining licensing practices and ensuring choice for AI tools.
Further demonstrating its pragmatic approach, the CMA recently announced new consultations concerning mobile markets:
- Draft conduct requirements are being proposed to support "steering," allowing app developers to engage directly with users outside Apple's and Google's app stores. This initiative aims to increase choice and introduce competitive pressure into a vital part of the mobile ecosystem, with an expectation that any fees charged by platforms for their services must be evidence-based and justified.
- Views are also being sought on opening access to the Near Field Communication (NFC) chip on Apple’s iOS platform. This would enable other apps to complete contactless transactions on iPhones, potentially fostering innovation in fintech, digital IDs, and other areas.
The CMA concluded by reiterating its clear purpose to ensure competition in digital markets serves the interests of UK consumers and businesses, achieved through a flexible, engaged, and outcome-focused strategy.
