On 7 January 2025, the Competition and Markets Authority (CMA) outlined its initial plans for the newly implemented digital markets competition regime which came into effect on 1 January 2025. This regime, established under the Digital Markets, Competition and Consumers Act 2024, aims to enhance opportunities for innovation, investment, and growth across the UK tech sector. The CMA plans to launch investigations into firms with "Strategic Market Status" (SMS) in various digital activities over the next six months, ensuring fair competition and protecting consumers and businesses.

The CMA's new regime allows it to designate firms with SMS in relation to specific digital activities and impose conduct requirements or introduce pro-competition interventions to achieve positive outcomes for UK consumers and businesses. The CMA is committed to implementation in an open, transparent, proportionate, and predictable manner, with the first SMS designation investigations expected to be launched later this month. Each designation investigation must be completed within a statutory time limit of nine months. The CMA did not go as far as to confirm in which specific digital activities it will launch its first SMS investigations, but more detail on this, and on how individual designations may improve outcomes for businesses and consumers is expected later.

Sarah Cardell, Chief Executive of the CMA, said:  

“The new digital markets competition regime provides a unique opportunity to harness the benefits of investment and innovation from the largest digital firms whilst ensuring a level playing-field for the many start-ups and scale-ups across the UK tech sector. 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.  

We are committed to ensuring that this regime delivers for the UK – driving benefits for UK consumers and businesses while stimulating investment, innovation and growth across the UK tech sector. 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.  

We are committed to implementing the regime in a way that is predictable and proportionate, moving at pace whilst respecting fair process. Today’s announcement that we intend to launch SMS investigations in relation to three distinct digital activities in the first six months starts to provide that predictability. The process for designing any interventions will also be participative and transparent, with the aim of keeping innovation-led markets open and bringing firms on the journey with us.”

As part of the press release, the CMA published a useful guide on How the UK’s digital markets competition regime works - GOV.UK. The guide elaborates on the benefits of the new regime for the UK as well as the criteria for SMS, the stages of an SMS investigation and what happens as a result of an investigation.