UK Competition Law Changes Post BREXIT
Brexit was one of the most high-profile separations history has ever witnessed, the UK Competition and Markets Authority issued advice to the British Government on the new pro-competition regime for the digital and tech enterprises. In the UK, the digital sector contributed to nearly €170 billion in 2018, with astonishing growth which has surpassed most sectors. Earlier in 2020, the UK Government commissioned the Digital Markets Taskforce, led by the Competition and Markets Authority (CMA) to make recommendations on the creation of a regulatory framework for the ever-growing digital markets in light of BREXIT. Subsequently, the CMA published a market study on online platforms and digital advertising including several recommendations to address competition concerns that had been identified.
The new rules will apply to businesses and enterprises which are considered to have a considerable impact on the digital scene. CMA stated that it considered companies such as Google and Facebook to be highly likely to be designated as having strategic market status in online advertising. It transpires that from the approx. €15 billion spent on digital advertising in the UK in 2019, a substantial 80% was spent on Google and Facebook.
The UK Competition and Markets Authority Recommendations
1. The CMA suggested the enactment of a Digital Markets Unit (DMU) to enforce a Code of Conduct for the major stakeholders. The DMU would be focused on pro-actively regulating the evolving digital markets to prevent harm and shape markets in a way to deliver greater competition and innovation.
2. Also, the creation of a new pro-competition framework was advised, to incorporate the main elements:
- a legally binding Code of Conduct for businesses that are designated as having SMS,
- a pre-emptive intervention targeting SMS businesses, and
- the setting up of SMS merger rules, which impose a responsibility to report transactions to the CMA.
3. The Authority has suggested that the new Code of Conduct should be binding that the DMU is to ensure conformity, with the possibility of incurring costs for non-compliance.
4. Strengthening consumer protection laws, to ensure that they cater to scenarios brought about by the digital age.