Digital Markets Unit: what we know and what to expect

Written on 23 Apr 2021

New tech watchdog will assess codes of conduct and create a level playing field for digital markets

The UK government has launched (7 April 2021) its long-awaited Digital Markets Unit (DMU), the new regulatory arm designed to oversee "big tech" platforms such as Google, Apple, Facebook and Amazon. It follows the government's announcement in November 2020 of its intention to introduce stricter regulation of digital players. That announcement reflected recommendations by the Competition and Markets Authority (CMA) following publication of its in-depth market study into online platforms and digital advertising on 1 July 2020.

Although praised by the government as "marking a major milestone for online market reform", at present the DMU is only a foretaste of what is to come. It has been established in non-statutory "shadow" form pending enactment of relevant legislation, which is required to equip the agency with statutory powers.

Under the envisaged regime, the DMU will be tasked with overseeing a new regulatory regime for platforms deemed to have "strategic market status". The newly established agency will supervise plans to offer consumers more choice and control over how their data is used and promote online competition, as well as eradicate unfair practices and support the CMA's enforcement functions.

Function and role

For now, however, all that the non-statutory DMU is tasked with has been outlined in the government's plan of the new unit’s function and its role for the first year of operation. This will comprise:

  • Carrying out preparatory work to implement the statutory regime, including building teams with the relevant capabilities and preparing draft guidance.
  • Supporting and advising government on establishing the statutory regime. The government has already asked the unit to assess how codes of conduct could work in practice to govern the relationship between digital platforms and groups such as small businesses that rely on them to advertise.
  • Evidence gathering on digital markets.
  • Engaging stakeholders across industry, academia, other regulators and government, as well as internationally. Building close relationships with other experts in the UK and abroad, as well as working closely with the wider industry to prepare for a smooth transition following legislation.

In addition to these four main roles, the DMU will work closely with officials from the CMA, the Department for Digital, Culture, Media and Sport, the Department for Business, Energy and Industrial Strategy and HM Treasury in order to agree a work programme for the non-statutory DMU on its advice to the government. The Information Commissioner's Office, Ofcom and the Financial Conduct Authority will also join this forum and contribute on their respective areas as may be appropriate.

The DMU will be led by Will Hayter, who will act as an interim head post from early May 2021. Mr Hayter's recent experience includes a period at the Cabinet Office working on Brexit transition policy, as well as serving as a leader on the CMA’s international policy.

OC comment

It is anticipated that the UK government will not table legislation until 2022 and, accordingly, the DMU will not be fully operational before then. The government will be running consultations on the design of the DMU. While this was initially pencilled in for early 2021, it is understood to have been delayed given the government's busy legislative agenda.

If your business may be affected by the DMU or you would like additional information on its role and anticipated powers, please get in touch with one of our digital market experts.