Implications for Financial Services Firms of the CMA's new Powers to regulate Digital Markets and to enforce Competition and Consumer Protection Laws (June 2023)
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Introduction
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The UK Parliament is currently considering the Digital Markets, Competition and Consumers Bill which will impact financial services firms. The legislation will introduce a new regulatory regime for digital markets to be enforced by the Digital Markets Unit (DMU) in the Competition and Markets Authority (CMA), with input from financial regulators. It will also lead to changes to competition laws including mergers, market inquiries, antitrust investigations and litigation.
The Bill will implement three broad categories of reform:
- introducing an ex-ante regulatory regime for businesses that are active in digital markets and have "Strategic Market Status", to be enforced by the DMU with connected rights for the Financial Conduct Authority (FCA), Bank of England and the Prudential Regulation Authority;
- effecting various changes to UK competition laws regarding the behavioural antitrust prohibitions on anticompetitive agreements and abuse of dominance, merger control and market investigations; and
- reform consumer protection laws by giving the CMA additional powers, however this may have less relevance to financial services firms as the FCA already has extensive consumer protection powers relating to the financial services sector.
