Competition | UK Regulatory Outlook April 2025

Changes to public sector subsidies regulations

The UK government is planning to raise the mandatory referral threshold for state public sector subsidies from £10 million to £25 million following a consultation aimed at refining the current UK subsidy control regime, which has been in force since 2023.

The current regime provides that public authorities must submit a referral to the CMA's Subsidy Advice Unit (SAU) where a subsidy can be considered a subsidy of particular interest (SoPI). The SAU will then provide a report on the subsidy's potential compliance with the Subsidy Control Act 2022.

Although there are some additional criteria for specific circumstances, the most frequent criteria for any subsidy being considered a SoPI are as follows:

• the subsidy is worth over £10 million; or
• the subsidy is worth over £5 million and is to be granted to a company operating in one of the sensitive sectors listed in the SoPI regulations.

A separate category, subsidies or schemes of interest (SSoI), exists for subsidies valued between £5 million and £10 million in non-sensitive sectors. In this category, referral to the SAU is not mandatory but is encouraged on a voluntary basis.

The consultation found that over 50% of respondents believed the value threshold for SoPIs should be raised. The reasons provided for this included inflation, increased costs, and reducing the administrative burden of offering subsidies. For SSoIs, respondents' views on thresholds were more varied. In this instance, the government has decided to retain the threshold at the current level.

No firm timeline for implementation of the changes has been decided, with legislation due to go before Parliament in the second half of 2025.

Commission issues first fines under Digital Markets Act

The European Commission has issued a total of €700 million in fines for breaches of the Digital Markets Act, which came into force in 2023. The fines are the first issued under the new regulation which regulates the power of the largest digital companies.

Apple has been fined €500 million for restricting the ability of app developers to effectively steer customers to offers outside of its App store. Additionally, Apple has been ordered to remove the restrictions on steering and refrain from conduct that has an equivalent effect in the future.

Meta's fine relates to a "consent or pay" advertising model that offered users a choice between a service using personal data to personalise ads or a subscription-based ad-free service. The Commission took the view that users should be given the choice to opt for an equivalent service that used less personal data. Meta has now introduced another version of the model which is currently being assessed by the Commission to confirm that it complies with the Digital Markets Act.