The Framework

The Digital Markets, Competition and Consumers (DMCC) Bill empowers the UK’s Competition and Markets Authority (CMA) to designate a company as having “strategic market status” (SMS) when it possesses significant market power or strategic influence in a digital market and meets the appropriate revenue thresholds. Instead of awaiting a proven violation of antitrust regulations, the CMA will implement proactive obligations, requiring SMS-designated firms to adhere to specific codes of conduct in areas such as data usage, access to essential platform services, and bundling practices. If a firm’s actions are determined to harm competition, the CMA can enforce structural or behavioral remedies to resolve the issue, moving beyond the more limited remedies typically associated with ex post enforcement.[1]

Implications for U.S. Technology Companies

American tech leaders—Alphabet (Google), Amazon, Apple, Meta, and Microsoft—consistently surpass the DMCC Bill’s turnover benchmarks, making them prime candidates for CMA oversight. Under the bill’s ex-ante model, these companies must adjust products and services in anticipation of regulatory scrutiny, which may limit how they integrate and promote new offerings. If the CMA considers specific pricing, bundling, or interoperability strategies to be anticompetitive, it can require changes or even impose structural remedies. The extra compliance burden diverts resources that could instead fuel innovation, product development, and broader market expansion.

How China Benefits

While some Chinese technology firms expand globally, fewer might meet the DMCC’s revenue thresholds in the United Kingdom, making them less likely to encounter similar oversight. As American platforms wrestle with new compliance requirements and the risk of hefty fines, Chinese providers can concentrate on enhancing their user experience and increasing market share. By sidestepping or more easily navigating the regulatory barriers dominant U.S. firms face, Chinese competitors can invest more in product innovation and local partnerships—potentially accelerating their growth within the UK’s digital ecosystem.

Endnotes