A firm becomes subject to the UK digital markets competition regime when the Competition and Markets Authority (CMA) designates it as having strategic market status (SMS) in a specific digital activity. That power, and the power to impose conduct requirements that govern how a designated firm behaves, is in Part 1 of the Digital Markets, Competition and Consumers Act 2024 (the DMCC Act). Part 1 came into force on 1 January 2025, the first designations were made in October 2025, and the first conduct requirements took effect in June 2026. A designated firm must comply with each conduct requirement the CMA imposes, and a business that depends on that firm can rely on those requirements in its own dealings with it.

The regulatory framework

Under Part 1 of the DMCC Act the CMA operates a bespoke, participative regime, distinct from ordinary competition enforcement. The CMA runs SMS investigations, decides on designation, and negotiates or imposes the obligations that follow, with certain decisions taken by its Digital Markets Board Committee and that committee’s case sub-committees. Designation is not a finding of wrongdoing: it is a status that allows the CMA to regulate, going forward, the conduct of a firm with durable market power in a digital activity linked to the United Kingdom.

Three conditions must all be met before the CMA can designate a firm under section 2. The digital activity must be linked to the UK (section 4). The firm must have substantial and entrenched market power, assessed on a forward-looking basis over a period of at least five years (section 5). And it must hold a position of strategic significance, which can arise from its size or scale, from other businesses depending on the activity, from its ability to extend its power into adjacent markets, or from its ability to determine how others behave (section 6). A separate turnover condition applies: global group turnover above £25 billion, or UK turnover above £1 billion (section 7).

Designation is activity-specific and time-limited. A firm is designated in relation to a defined digital activity rather than across its whole business, and the designation lasts five years from the day after the decision notice (section 18). A single firm can hold more than one designation. The CMA’s first designations illustrate the point. It designated Google as having SMS in general search services on 10 October 2025, and Apple and Google as having SMS in their mobile platforms on 22 October 2025. Each rests on a specific finding of entrenched power in a defined activity, not a general judgment about the company.

Conduct requirements and how they differ from the EU approach

A conduct requirement is a tailored obligation the CMA imposes on a designated firm under section 19 of the DMCC Act. Unlike the fixed, per-se obligations the EU Digital Markets Act places on every gatekeeper, a UK conduct requirement is designed for the specific firm and activity. The CMA must pursue one of three statutory objectives, fair dealing, open choices, or trust and transparency, and must act proportionately, weighing the likely benefits for consumers.

Each requirement must fall within a permitted type listed in section 20. These divide into positive obligations, such as trading on fair and reasonable terms, operating effective complaints processes and giving clear information and advance notice of material changes, and prohibitions, such as not self-preferencing, not tying products together, not misusing data and not restricting interoperability with rival products. The CMA can therefore calibrate an intervention to the harm, and a designated firm has to read each conduct requirement on its own terms rather than off the statutory list.

The difference between a conduct requirement and a pro-competition intervention

The CMA has two tools. Conduct requirements govern behaviour and the CMA can impose them directly following consultation. Pro-competition interventions (PCIs) address the underlying features of a market that prevent, restrict or distort competition, and can require structural or behavioural remedies including mandated interoperability or data access. A PCI requires a separate pro-competition investigation, so it is a slower and more powerful instrument than a conduct requirement.

Feature	Conduct requirement	Pro-competition intervention
Legal basis	Section 19 DMCC Act 2024	Sections 46 and 47 DMCC Act 2024, Chapter 4 of Part 1
What it does	Governs how the firm behaves towards users and rivals	Remedies the market features that entrench the firm’s power
Process	Imposed by the CMA after consultation; relatively quick	Requires a separate investigation; slower and more far-reaching
Typical remedies	Fair terms, no self-preferencing, transparency, interoperability	Structural change, mandated access, data portability

Enforcement where a designated firm breaches a conduct requirement

Where a designated firm fails, without reasonable excuse, to comply with a conduct requirement, the CMA may impose a penalty (section 85) of up to 10% of the worldwide turnover of the undertaking or, where it is part of a group, of the group (section 86). Where the CMA has begun a conduct investigation it can make an interim enforcement order to prevent significant damage, to prevent conduct that could reduce the effectiveness of other steps, or to protect the public interest (section 32). A designated firm can invoke the countervailing benefits exemption (section 29): where the undertaking’s representations lead the CMA to consider that the exemption applies, the CMA must close the conduct investigation. All five conditions must be met, so the conduct must give rise to benefits to users, those benefits must outweigh any detrimental impact on competition, they must not be realisable without the conduct, the conduct must be proportionate to realising them, and the conduct must not eliminate or prevent effective competition. A firm can also offer commitments, which the CMA may accept in place of imposing a requirement and must then keep under review.

Why SMS designation matters for your business

Only a handful of firms are designated. If your business distributes through an app store, advertises through a designated search service, or relies on a designated platform for payments, discovery or data, the conduct requirements imposed on that platform change your commercial terms. The CMA imposed the publisher conduct requirement on general search, which covers publisher control over the use of search content in Google’s generative AI features, on 3 June 2026, and the fair ranking and data portability conduct requirements on 17 June 2026. For payments and fintech clients, the CMA’s mobile platform work is directly relevant to how alternative payment flows can operate. On 30 June 2026 the CMA launched a consultation on a proposed steering conduct requirement for each of Apple and Google, and published a call for views on access to the near-field communication chip on iOS, on which it expects to consult on measures in autumn 2026. Neither measure has been imposed. A designated firm must also report a qualifying transaction to the CMA before completion under Chapter 5 of Part 1 (section 57), which applies where it acquires qualifying status in a UK-connected body corporate for consideration of at least £25 million, and which runs alongside the ordinary merger regime.

How we work

Rob Bratby gives direct legal advice on a specific question, takes specialist co-counsel instructions alongside a competition or corporate team, and is retained as fractional general counsel. Rob Bratby currently holds four fractional General Counsel appointments, at The One Touch Switching Company, TelXL, Core Communication and the UK Payments Initiative. Where a matter raises the use of personal data in AI-driven features, it is dealt with in the data protection practice, since AI sits within data protection rather than as a standalone practice area.

Frequently asked questions about SMS designation

Does SMS designation mean a firm has broken the law?

No. Designation under section 2 of the DMCC Act is a forward-looking status, not a finding of infringement. The CMA designates a firm because it judges the firm to have substantial and entrenched market power and a position of strategic significance in a digital activity. Designation is the trigger that allows the CMA to impose conduct requirements, not a penalty in itself.

Which firms can be designated?

Only firms that meet the two SMS conditions in sections 5 and 6, substantial and entrenched market power and a position of strategic significance, together with the link to the United Kingdom in section 4 and the turnover condition in section 7, which requires global turnover above £25 billion or UK turnover above £1 billion. In practice this captures a small number of large digital firms. The CMA has made three designations, all in 2025: Google in general search services on 10 October, and Apple and Google in their mobile platforms on 22 October.

How long does a designation last?

Five years from the day after the decision notice, under section 18. The CMA must begin a further SMS investigation not later than nine months before the end of the designation period, unless it is already carrying one out (section 10). A firm can be designated in more than one digital activity, and each designation has its own timetable.

We are not designated, but a platform we rely on is. Does the regime help us?

Yes. Conduct requirements are designed to protect the users and business customers of designated firms. If a platform you depend on is subject to a requirement on fair terms, ranking transparency, interoperability or data portability, that requirement is intended to benefit you. A business can rely on that requirement in its dealings with the platform and can raise a concern with the CMA.

How does the UK regime compare with the EU Digital Markets Act?

Both regimes regulate the most powerful digital firms, but the UK regime is bespoke and participative where the EU Digital Markets Act sets fixed obligations on designated gatekeepers. The CMA has used its flexible conduct-requirement power to achieve outcomes comparable to specific EU obligations, such as data portability, without adopting the EU’s per-se obligations. Firms active in both jurisdictions need to track both.

Related digital regulation pages

The other digital regulation pages on this site:

Digital Regulation
Pro-Competition Interventions
Concurrent Competition Powers
Market Investigations and Studies
Merger Control in Digital Markets
Competition Enforcement and Litigation
EU Digital Markets Act Compliance

Also see

The regime intersects with Telecoms Regulation, Payments Regulation and Data Protection. For commentary on current developments, see Insights.