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Digital markets taskforce to inform UK competition policy

Out-Law News | 12 Mar 2020 | 5:44 pm | 2 min. read

A new taskforce is to advise the UK government on whether digital platforms should face regulation on matters of data access and interoperability.

The digital markets taskforce is a panel the UK government has established to help inform future government decisions on how best to promote competition in digital platform markets. It comprises officials from regulators the Competition and Markets Authority, Ofcom and Information Commissioner's Office.

As well as advising on the matter of data access and interoperability, the taskforce is also expected to look at whether additional powers are necessary for UK regulators to effectively promote competition in digital platform markets. It could also provide guidance on how the UK's competition regime should interact with other regulatory frameworks and objectives, including economic growth and innovation, privacy, data protection, and intellectual property rights.

The digital markets taskforce will build on work already undertaken by the digital competition expert panel (DCEP), which made recommendations for reform of the UK's competition regime to account for developments in digital markets last year.

The new taskforce will provide advice on a potential methodology to designate digital platforms with ‘strategic market status’. The idea of designating platforms in this way was suggested by the DCEP to target regulatory measures at platforms that hold control over others’ market access.

Under the DCEP's proposals, digital platforms with strategic market status would be subject to a new code of conduct. The digital markets taskforce has been asked to provide advice on the form that code should take. It has also been asked to consider whether there could be justification for other intervention to promote competition in relation to platforms that are not designated with strategic market status.

The taskforce, which will also advise the government on where international cooperation would be valuable or necessary, is due to publish its final report for the government in September this year.

"The CMA will welcome the leading role they have been given to influence the UK’s future regulation of the technology sector," said competition law expert Alan Davis of Pinsent Masons, the law firm behind Out-Law. "The taskforce will be based at the CMA’s premises and will be headed by a senior CMA official. The CMA’s role will fit well with the work and analysis it has been undertaking, including the development of a digital markets strategy, a market study into digital advertising online platforms, assessing various mergers involving digital companies, and competition and consumer law enforcement in the digital sector."

The government published the terms of reference for the digital markets taskforce to coincide with the UK chancellor's Budget announcement on Wednesday.

It said: "The government is clear that any future interventions must strike the right balance between promoting competition and innovation on the one hand and avoiding disproportionate burdens on business on the other hand. The government recognises that timely action is needed in these fast-moving markets. Failing to act could allow poor competition outcomes to persist with consumers ultimately suffering. That is why the government is establishing a dedicated digital markets taskforce."

"The government will make final decisions on what proposals to take forward. This includes where any additional functions and associated powers to manage market power and to promote competition in digital platform markets should ultimately sit. The government is mindful of the need to ensure that any future changes to the regulatory system are coherent and cohesive, build confidence and clarity for businesses and consumers, boost innovation and investment, and reinforce the UK’s position as a global leader in stable, innovation-friendly regulation. The government will keep these factors in mind when considering next steps following the taskforce’s advice, and will consult on any final proposals in due course," it said.