The UK’s Digital Market Regulation: The Need for a Proportionality Principle in the CMA’s New Framework

July 8, 2024


The application of the principle of proportionality in competition law enforcement is of utmost importance. However, there are concerns regarding its effective implementation under the DMCC Bill, primarily due to the restricted extent of judicial review. The lack of a comprehensive evaluation of the merits in the DMCC Bill could impede the meticulous assessment of proportionality in CMA decisions, potentially resulting in the adoption of measures that are not commensurate with their goals. This raises concerns about the possibility of implementing disproportionate measures. There is a pressing requirement for the CMA to provide more comprehensive instructions on how to apply the proportionality principle, specifically in terms of incorporating efficiency considerations, to guarantee the efficient implementation of the principle.

The CMA's method of seeking input and providing comprehensive instructions on proportionality are crucial measures in guaranteeing just and appropriate decisions in the absence of a complete judicial review based on merits. Although these measures can improve transparency, stakeholder involvement, and decision-making quality, they are not sufficient to completely substitute for a comprehensive evaluation based on merits. To optimize their efficiency, the CMA must diligently execute and conform to these procedures, guaranteeing that all decisions are defensible, equitable, and consistent with the principles of proportionality. This strategy will effectively preserve trust in the CMA's regulatory framework while simultaneously protecting the rights of businesses and consumers.

The CMA's commitment to incorporating the principle of proportionality into all aspects of its enforcement activities is highly appreciated. To accomplish these objectives, the recommendations of the paper primarily focus on the development of comprehensive instructions for implementing the proportionality requirement. This includes providing guidance on how to incorporate the Anticompetitive Effects Test (AEC) to strike a balance between legal and economic viewpoints. It is recommended to include specific provisions for efficiency defenses within the proportionality requirement. This should involve acknowledging potential defenses concerning integrity, security, and privacy, like what is outlined in the Digital Markets Act (DMA).