Proposals for Digital Regulation in the UK: Some Trade-offs and Challenges

In this paper we consider the proposals in the UK for regulation of the most powerful digital firms. We examine some key areas of debate and possible trade-offs that must be considered in setting up and implementing such a regime. This includes: the test for deciding which firms are within scope of the regime; whether the rules imposed by the regulator should be common across all regulated firms or bespoke; and whether and how efficiencies should be considered.

By Adam Cellan-Jones & Dr. Jenny Haydock¹

I. THE UK LANDSCAPE

Digital markets are unquestionably a hot topic in competition policy globally. In the UK, the CMA has a wide-ranging portfolio of work in the digital space,² reflecting its stated priority to foster effective competition in digital markets.³ This includes: a market study into mobile ecosystems;⁴ open Competition Act investigations into Google,⁵ Apple,⁶ and Facebook;⁷ and a range of consumer enforcement work.^8] The CMA’s Merger Assessment Guidelines were also recently updated, in part to ensure that mergers involving digital technologies would be properly assessed.⁹ The CMA’s Data, Technology and Analytics (“DaTA”) team continues to grow, improving the authority’s ability to understand and assess digital markets, and engaging in important research such as recent work on how the use (and misuse) of algorithms can reduce competition in digital markets and harm consumers.¹⁰

This portfolio of work is designed to use the CMA’s existi