New year, new CMA dominance investigation…

18.01.2021

The CMA has taken the unusual procedural step of opening an investigation to assess the proposed conduct of a firm, despite the proposals in question not having been finalised or implemented. The CMA recently announced that it had opened an investigation into Google’s proposals – known collectively as the ‘Privacy Sandbox’ project – which would disable third party cookies on the Chrome browser and Chromium browser engine and replace them with a new set of tools which aim to protect consumers’ privacy to a greater extent. The project is said to have a roughly two-year time frame, over which period Google plans to devise alternative technical solutions. It is somewhat surprising that the CMA has launched an investigation at this stage, particularly given that it has had the opportunity, alongside the Information Commissioner’s Office (under the umbrella of the Digital Regulation Cooperation Forum), to engage in informal discussions with Google on the development of these proposals.

This pre-emptive move most likely arises out of the CMA’s focus on the digital sector for which it considers ex ante preventative controls may be more effective than seeking to correct any resulting harm with traditional ex post competition enforcement. There has been widespread commentary suggesting that traditional competition rules move too slowly and that markets may have tipped by the time investigations are complete. Indeed, the CMA’s Digital Markets Taskforce recently highlighted that the ex ante regime it is developing for the digital sector (see more here) will be targeted at firms with ‘strategic’ market status (SMS), including those firms which can effectively determine the ‘rules of the game’ for others. The CMA pointed to Google’s announcement that it would phase out support for third-party cookies on Chrome in both its final report in its market study into online platforms and digital advertising (para. 47) and in its more recent proposal for the design of the SMS regime (para. 52). While the Taskforce has received parliamentary approval, its remit has not yet been formally determined, so for now competition tools remain the CMA’s primary route to investigate issues of this kind.

Finally, the timing of the CMA’s investigation, which was launched shortly after the end of the Brexit transition period, highlights that the CMA is ready to pursue investigations which would previously have been likely to fall under the exclusive purview of the European Commission.

Francion Brooks

Author

Emma Mackie

Author