The advice has been produced by the Digital Markets Taskforce, commissioned by the government in March and led by the Competition and Markets Authority (CMA), working together with Ofcom, the ICO and the FCA.

Key recommendations include:

• Establishment of a Digital Markets Unit (DMU) to further the interests of consumers and citizens in digital markets, by promoting competition and innovation.

• Development of a regulatory framework for the most powerful digital firms, alongside strengthening existing competition and consumer laws. The design of this framework needs to be evidence-based, proportionate, transparent and coherent with other regulatory regimes both domestically and internationally

• Existing competition and consumer protection laws are strengthened so they are better adapted for the digital age.

The proposed new regime

The DMU should have strong powers to drive vibrant competition and innovation across digital markets. In particular, CMA are recommending the DMU should oversee a regulatory framework for the most powerful digital firms – ‘the Strategic Market Status (SMS) regime’, with SMS merger rules overseen by the CMA.

Those firms that are designated with SMS should be subject to the following three pillars of the regime:

• An enforceable code of conduct that sets out clearly how an SMS firm is expected to behave in relation to the activity motivating its SMS designation. The aim of the code is to manage the effects of market power, for example by preventing practices which exploit consumers and businesses or exclude innovative competitors.

• Pro-competitive interventions like personal data mobility, interoperability and data access which can be used to address the factors which are the source of an SMS firm’s market power in a particular activity. These interventions seek to drive longer-term dynamic changes in these activities, opening up opportunities for greater competition and innovation.

• SMS merger rules to ensure closer scrutiny of transactions involving SMS firms, given the particular risks and potential consumer harm arising from these transactions.

The publication of this advice comes swiftly after last week’s Government response to the CMA Online Platforms and Digital Advertising Market Study, accepting the findings of the report and declaring that “The new code will govern commercial arrangements between publishers and platforms to help keep publishers in business – helping enhance the sustainability of high-quality online journalism and news publishing in the UK."

PPA commented: “This is a welcome step towards achieving effective regulation of online platforms to promote and enhance competition, while providing publishers a fair deal. We welcome the government’s commitment to establish the Digital Markets Unit from April next year and urge the Government to move swiftly to in bringing forward the necessary legislation to put the DMU on a statutory footing.”