CMA update: What’s happened so far & what’s next?
Read our summary of what’s happened since the Competition & Markets Authority (CMA) released its market study into online platforms and digital advertising earlier this year
What’s happened so far?
In July 2019, the CMA launched a market study to assess how well the markets for search, social media and digital advertising are working - with particular focus on the market power of Google and Facebook, consumers’ control over their data and the current state of competition within the digital advertising market.
Following an interim report that IAB UK responded to, the CMA released its final report in July 2020. This recognises the benefits of the services provided by social platforms and the value of digital advertising to consumers and business - particularly for small businesses. It concludes that regulatory change is needed to support healthy competition within the digital market.
Amongst its proposals, the CMA recommended that the Government create a Digital Markets Unit (DMU) as part of a new pro-competition regime, with powers to introduce and enforce a new code of conduct for platforms with ‘strategic market status’. Areas of proposed intervention centre on data, consumer choice and operational separations (i.e. breaking companies up). You can read the recommendations in full here.
In November 2020, the Government published its response to the CMA, accepting the majority of its proposals, including the creation of a new DMU that will sit within the CMA.
Alongside this, the Digital Markets Taskforce - led by the CMA, working with Ofcom, the Information Commissioner’s Office (ICO) and Financial Conduct Authority (FCA) - has been working on developing advice for the Government on how it can design and implement new pro-competition measures in practice. IAB UK responded to its call for information and the advice was published in early December 2020. Its recommendations include a legally binding code of conduct to ‘level the playing field’, tailored to each firm and designed and overseen by the Digital Markets Unit, which stands to encompass a range of powers - including the potential to issue significant penalties. Find out more here.
What happens next?
The CMA is now working with Ofcom, the ICO and FCA to consider the steps that should be taken to ensure adequate coordination, capability and clarity across all digital regulation.
Following receipt of the Digital Markets Taskforce’s advice, the Government has committed to consult on proposals for a new pro-competition regime in early 2021 and to legislate to put the DMU on a statutory footing when parliamentary time allows. The Digital Markets Taskforce has urged the Government to move quickly in taking this legislation forward, to take advantage of the opportunity for the UK to ‘lead the way’ in championing a modern pro-competition, pro-innovation policy.
At the IAB, our focus within this work will remain on measures that specifically affect digital advertising (as opposed to platform-specific measures). We will be engaging with the Digital Markets Taskforce to support thinking on measures specific to digital advertising while continuing to engage with the DCMS’s online advertising regulation review team, as well as the CMA and ICO on privacy-related work arising from the market study.