HomeInsightsGovernment announces that Digital Markets Unit has commenced work and publishes terms of reference

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The Government says that the Digital Markets Unit (DMU), based in the Competition and Markets Authority (CMA), will oversee plans to promote online competition and crack down on unfair practices.

According to the Government, there is a consensus that the concentration of power among a small number of online platform companies is curtailing growth and having negative impacts on consumers and businesses which rely on those platforms.

In November 2020, the Government announced that a new unit would be set up to enforce a new pro-competition regime to cover platforms with considerable market power, i.e. strategic market status. The DMU has now commenced its first work programme as it launches in “shadow” non-statutory form ahead of legislation granting its full powers.

According to the terms of reference, the non-statutory DMU will:

  • carry out preparatory work to implement the statutory regime: building teams with the relevant capabilities and preparing draft guidance;
  • support and advise the Government on establishing the statutory regime: looking at how codes of conduct could work in practice to govern the relationship between digital platforms and groups such as small businesses that rely on them to advertise or use their services to reach their customers; the Digital Secretary has specifically asked the DMU to work with the communications regulator Ofcom to look at how a code would govern the relationship between platforms and news publishers to ensure they are as fair and reasonable as possible; the Government will consult on the design of the new pro-competition regime in the first half of 2021 and legislate to put the DMU on a statutory footing as soon as Parliamentary time allows;
  • evidence gathering on digital markets: the CMA will continue to use its existing powers, where appropriate, to investigate harm to competition in digital markets; this will ultimately inform the work of the statutory DMU; and
  • engaging stakeholders across industry, academia, other regulators and Government: building relationships with experts in the UK and internationally to compile the necessary evidence, knowledge and expertise so that once the new pro-competition regulatory regime is in place it can begin operation as quickly as possible; the DMU will also coordinate with international partners and work closely with other regulators, including the Information Commissioner’s Office, Ofcom and the Financial Conduct Authority (FCA).

A forum will be established for the DMU to update the Government on its work. It will bring together officials from the CMA, the DCMS, the Department for Business, Energy and Industrial Strategy, and HM Treasury, to agree a work programme for the non-statutory DMU on its advice to the Government, and monitor progress against this. The ICO, Ofcom and the FCA will also join this forum to inform the work programme on relevant areas as required. To read the Government’s press release in full and for a link to the terms of reference, click here.