The Competition and Markets Authority (CMA) has today published an overview of how it intends to operate the new digital markets competition regime as currently proposed by the Digital Markets, Competition and Consumers (DMCC) Bill.

This will include tailoring the CMA’s actions to the specific problems that are identified; focusing on where it can have the most impact for people, businesses and the UK economy; engaging with a wide range of stakeholders; and operating with transparency.

In the document, the CMA has detailed how it the new digital markets competition regime will only apply to firms designated as having Strategic Market Status (SMS) in relation to one or more digital activities.

To qualify as a SMS, firms must have a substantial and entrenched power in a digital activity linked to the UK, a position of strategic significance, and a global turnover of £25bn or a UK turnover of more than £1bn.

In the coming year, the CMA expects to start three to four SMS investigations, and once an SMS is designated, the CMA can then take action to address or prevent problems.

The CMA also plans to convene groups representing UK consumers, businesses and tech professionals that will be consulted and help prioritise its work. This is in addition to the nine tech experts appointed last year, who have been assisting the CMA in preparing for the new regime.

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With 11 principles guiding how the CMA will carry out its new role, the CMA plans to address champion competition as the “primary lever” to deliver better outcomes for users across digital markets.

After establishing a SMS is using their status to gain an unfair competitive advantage, the CMA will take targeted and proportionate action to address this behaviour. This could include imposing conduct requirements on firms in relation to the digital activity for which they have been designed.

Examples of this include preventing SMS firms from preferencing their own products and services, or making them provide competitors with better access to data and functionality.

SMS firms may also be required to offer interoperability with competing firms, providing users with an effective choice.

More specifically, the CMA may require SMS firms to trade on fairer terms or require them to increase transparency with respect to aspects of their algorithm.