UK: Global competition reforms to tackle digital markets - update
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Competition authorities around the globe are taking steps to develop institutional capability, and call for new legal powers to tackle the evolving issues in digital markets. The CMA, in cooperation with other regulators, has published and updated a Compendium of Approaches to Digital Markets summarising these developments.
We have already written about the adoption of the Digital Markets Act in the EU and the UK’s proposals to strengthen its competition regime, but there are also other global initiatives.
The Compendium identifies two key challenges faced by all regulators. The first is the market power of certain tech companies, aided by network effects, multi-sided markets, and unique access to data. Second, is the insufficiency of existing regulatory powers and methodologies.
The Compendium singles out digital advertising, algorithmic data processing, marketplaces, app stores, and so-called ‘killer acquisitions’ as key priorities. In response, global regulators are:
(i) establishing specialist units with the requisite skills and resources to focus on digital markets, and
(ii) developing new legislative frameworks to address the challenges.
We summarise the key developments in each jurisdiction below:
| Jurisdiction | Specialist Digital Units | Digital Competition Law Reform |
| EU | Around 40 officials will be recruited to work on the regulation of firms designated as digital gatekeepers by early 2023. A separate team of technologists will also be established. | The Digital Markets Act entered into force on 1 November 2022 introducing a new ex ante regime to address unfair practices by designated ‘gatekeepers’. The Act includes both prohibitions against unfair conduct and affirmative obligations to promote well-functioning digital markets. Together with the Digital Services Act — adopted on 27 October 2022 — the Digital Markets Act will reset the regulatory framework applicable to digital companies and the broader digital ecosystem. |
| Germany | Creation of the Digital Economy Unit in 2019. | An amendment to the Restraints of Competition Act came into force in early 2021 and allows the Bundeskartellamt to intervene more effectively in cases of certain conduct by companies which are of paramount significance for competition across markets. |
| France | Establishment of Digital Economy Unit in 2020. | The transposition of Directive (EU) 2019/1 (the ECN+ Directive) was published in May 2021, providing the Autorité with new tools adapted to enforcement challenges. |
| Italy | N/A | Laws passed in August 2022 introduced new tools to tackle the bargaining power of digital platforms. The existing provisions concerning the abuse of economic dependence are amended to account for the intermediation power of digital platforms. |
| UK | Creation of the Data, Technology and Analytics (DaTA) Unit to provide expert data and technology advice. The Digital Markets Unit, also within the CMA, is currently operating in shadow form to horizon-scan and identify the potential impact of new technologies and business practices on dynamics in digital markets. | The UK government set out its intentions for an ex-ante pro-competition regime in May 2022. This regime would apply to firms that are designated as having ‘strategic market status’. These firms may be subject to pro-competitive interventions such as data access or interoperability requirements. |
| Australia | The Australian Consumer and Competition Commission (ACCC) established a Strategic Data Analysis Unit (SDAU), and more recently a Data and Intelligence branch which includes the SDAU. | In February 2022, the ACCC issued a discussion paper on whether there is a need for new regulatory tools to address concerns regarding digital platform services. A report was provided to the Australian Government in September 2022. |
| India | In the process of setting up a Digital Markets and Data Unit (DMDU). | - |
| US | The US FTC recently added a Chief Technologist and other technology specialists to advise on technology matters, while the US DOJ hired a technology economist as its new Chief Economist. | In March 2022, the United States Department of Justice issued a letter in support of the American Innovation and Choice Online Act, which would prohibit discriminatory conduct by dominant platforms. In July 2021 President Biden issued an Executive Order on Promoting Competition in the American Economy, with a focus on digital markets. |
| Canada | Creation of new branch in 2021 called ‘Competition through Analytics, Research, and Intelligence’ (CANARI). | In 2022 a number of amendments were made to the Competition Act. New considerations for digital commerce such as network effects, non-price competition, and privacy, may now be taken into account by the Competition Tribunal. |
| Japan | Hiring of new staff members with tech backgrounds as ‘Digital Analysts’, who provide advice to the JFTC. | The Act on Improving Transparency and Fairness of Digital Platforms allows certain digital platforms to be designated as ‘specified digital platform providers’, subjecting them to specific regulations aimed at increasing transparency and fairness in markets such as online marketplaces and app stores. |
| Korea | Reorganised its ICT taskforce into a ‘Digital Market Response Team’ in January 2022 to strengthen law enforcement capabilities in the ICT sector. | The National Assembly is discussing the a proposed Act on Fairness in Online Platform Intermediary Transactions. This Act focuses on transactions in online platforms as well as mutually beneficial cooperation between platforms and online stores. |
For more information please contact Anthony Rosen or Sean Bullock.
