On 7 April 2021, the CMA launched its much anticipated Digital Markets Unit (DMU) in shadow form, pending legislation. The new regulator will sit within the Competition and Markets Authority, with the potential to enforce a code of conduct and impose ‘pro-competition interventions’ in digital markets.
Euclid Law partner Sarah Long commented that the clear intention is for the DMU for have teeth. However, what remains to be seen is the role of the DMU in mergers. While it is clear that the DMU is expected to work closely with the CMA enforcement teams to scrutinise digital mergers, the extent of its involvement in either identifying and/or reviewing digital mergers, and the division of labour between the DMU and the CMA’s merger case teams remains unclear.
Long emphasised that “This will be of importance from a practical perspective as the CMA is already expecting a significant increase in its merger control caseload following the end of the Brexit transition period.”
The UK’s Competition and Markets Authority has called for a new regime to regulate the online economy, after its digital advertising study found the market power of Google and Facebook is causing substantial harm to “society as a whole”.
The enforcer today asked the UK government to create a digital markets unit and empower it to break up big tech companies and enforce a code of conduct among online platforms to resolve competition concerns in that sector. It did not specify if the new unit should function within an existing body or be created as a new standalone regulator.
The EU enforcer launched a public consultation on its proposed market investigations tool in May. EU competition commissioner Margrethe Vestager has cited the CMA’s similar power as an efficient way of tackling competition concerns in fast-moving markets.
Euclid Law partner Becket McGrath, who advised a publisher during the UK enforcer’s market study, said it is understandable why the CMA asked the government to introduce a new regulatory regime. Conduct that is not good for competition does not necessarily infringe antitrust law, but it could be addressed through careful, targeted regulation, he said.
Combating concerns related to the market power of big tech requires difficult public policy trade-offs that extend well beyond competition law, McGrath added.
“With all these moving pieces, there has to come a point when the CMA, as an independent and unelected agency, hands over to the government,” he said.
McGrath also questioned if the UK could effectively implement some of the CMA’s proposals without aligning with reforms emerging elsewhere, particularly in the EU. “Solutions need to be closely coordinated – it’s not good for businesses if there is too much divergence,” he warned.
To read the full article on GCR website, click here.
Congratulations to our Euclid Law Partner Sarah Long recognised as One of the World’s Leading Young Antitrust and Competition Law Partner for 2020.
The award recognises the top private practitioners and economists in the world and is a testament to Sarah’s professionalism, passion and dedication to the trade.
“[…] I was drawn to the intellectual challenge of practising competition law and the intersection between law, economics and business. This remains what I enjoy most about practising competition law: getting to really understand a business so that the advice can be tailored to suit the specific market and the commercial realities of that company.” – Sarah Long
Read the full interview here.
Sarah Long provided her views on the CMA’s Lear Report on digital markets and merger control. A link to the GCR story is here, and a longer LinkedIn piece is available here.
We are delighted to be part of the 2018 edition of the GCR 100 among other top competition practices, doing the most important antitrust work around the world.