On 27 November 2020, the UK Government (“UK”) announced the introduction of a new regulatory regime for digital platforms that will be overseen by a dedicated Digital Markets Unit from April 2021. This announcement has supervened upon a market investigation on online platforms and digital advertising carried out by UK Competition and Markets Authority (“Competition and Markets Authority, CMA”). This market investigation stated that the existing market structure has led to market failure and which may have harmful effect on either consumer and enterprises. The UK Government, in a recent announcement, accepted the CMA’s call for intervention and proposed new codes of conduct for bringing under control of platforms whose have “Strategic Market Status” to create what it describes as a “Healthy Environment for Technology Companies”. CMA besides, stated that they will issue a consultation (“Consultation”).
On 20 July 2021, the government published a consultation on its proposals for a new pro-competitive regime for digital markets. In addition to that, on 6 May 2022, it published a response to the relevant Consultation, which contains the new pro-competitive policy regarding digital markets. Code of conduct is determined for the purpose of the most powerful technology companies with Strategic Market Status (“Strategic Markes Status, SMS”).
The new Digital Markets Unit (“Digital Markets Unit, DMA”) will have the same powers as the CMA has under the Competition Act (“Competition Act 1998, CA”). The CMA will be responsible for the implementation and strengthening of the regime.
What Shall CMA Touch With New Order ?
1. The focus of the new regime will be applied to companies whose have strategic market status and digital market power.
2. Reporting obligations will be imposed on companies having strategic market power in merger control.Further,Regardless of the value of the merger, these companies will make a notification and under the general merger acquisition control regime, it is envisaged to introduce an acquirer-oriented boundary of authority. Moreover, new regime besides, deeply shall focus on horizontal and vertical acquisitions of technology companies having strategic market power and to acquisitions known as “killer acquisitions”.
3. The criteria for determining the strategic market power will be clearly included in the legislations to be enacted, and in this determination, the established market power will be taken into account.
4. Codes of conduct, based on fair trade and transparency, for companies having strategic market power will be introduced.
The intended benefits with the code of conduct envisaged to be introduced;
· To prevent the application of discriminatory terms of use, policies, conditions to users who perform the same action.
· Provide users with clear — accurate — relevant and accessible information.
· Controlling the branding and presentation of content.
Concerning Sanctions
Firms violating the code of conduct and other rules introduced with new regime may be subject to an administrative fine of up to 10% of the world’s turnover, and in case of continuing violations, an administrative fine of 5% of their daily turnover will be imposed across the world. Secondly, Administrative fines up to 1% of the daily world turnover may be imposed in case of not responding to requests for additional information, not responding properly, misleading and incorrect answers.
Sources
· https://www.lexology.com/library/detail.aspx?g=3fdf5e43-0f1c-4b5a-87d2-85fe34e43a4e
