Furman report on unlocking digital competition

Antonio Bavasso

On 13 March the UK Government published a report by an expert panel established by the Chancellor and led by Harvard economist and former White House economic adviser, Jason Furman, on reforms to competition rules and regulation in the digital sector: “Unlocking digital competition”.

Executive summary

The report was commissioned in the context of global calls for regulation of the digital economy. Some proposals discussed in political circles are truly radical. In the US, for example, on 8 March presidential candidate Senator Elizabeth Warren stated that if elected, she would introduce laws to break up the so-called “Big Tech” and give regulators the power to unwind anticompetitive mergers. EU Competition Commissioner Margrethe Vestager – who is widely viewed as one of the most aggressive enforcers of competition policy in the digital sector – said that breaking up Internet giants would be the “last resort” under EU law, and that the European Commission is focused on using existing antitrust rules to rectify market behaviour.

The Furman Report, whilst falling short of suggesting break up measures, makes far reaching, in some cases entirely new, recommendations for the government. If implemented, they would amount to a radical overhaul of the UK competition rules in the digital sector which would be unprecedented in the current regulatory landscape.

In many respects the report chimes with a number of proposals suggested by the CMA on 25 February and summarised here. Summarised below are the key Furman Report proposals.

  • Creating a new digital markets unit (either independent or as a function of an existing authority/regulator) with specific powers (i) to set a code of conduct for companies with “strategic market status”; (ii) on data mobility and open standards; and (iii) to secure access to non-personal anonymised data.
  • Adapting the merger control rules so that the Competition and Markets Authority (CMA) can “better stop digital mergers that are likely to damage future competition, innovation and consumer choice”. This would include an obligation on digital companies that have been designated with a strategic market status to make the CMA aware of all intended acquisitions, the CMA giving priority to the scrutiny of mergers in digital markets and, most importantly, the CMA’s assessment taking account of the scale as well as the likelihood of harm.
  • Strengthening regulators’ competition enforcement powers so that breaches can be dealt with more quickly and easily, adjusting also the standard of judicial review for antitrust infringements and use of interim powers.
  • Launching a formal CMA market study into the digital advertising market “which is dominated by two players and suffers from a lack of transparency”.

Further information

You can find more detail in the extended alert on the Unlocking Digital Competition report on our website here.

You can also see all documents relating to the panel’s review here, and the CMA’s press release welcoming the report’s recommendations here. Indeed, many of the suggestions in the report will be well received at the CMA since, as the CMA itself has noted, “many of the proposed reforms to the competition regime announced last month by CMA Chairman Lord Tyrie are supported by the panel’s recommendations”. Click here for information on the CMA’s February preliminary proposals for legislative and institutional reforms to competition and consumer protection law and policy. The UK government is expected to formally respond to Furman Report in the summer.

Authors: Antonio Bavasso and Emily Bourne