What Does the CMA Do? A Guide to the UK’s Competition Regulator

The Competition and Markets Authority (CMA) is the UK’s principal competition regulator. It enforces the prohibitions on anti-competitive agreements and abuse of dominance under the Competition Act 1998 (CA 1998), controls mergers under the Enterprise Act 2002 (EA 2002) and now regulates large digital platforms under the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024). For any business operating in a concentrated market, planning an acquisition or competing with a dominant platform, the CMA is the regulator to understand.

This guide explains what the CMA does, how it enforces the law, and what the DMCCA 2024 changes. It is the fourth in our series of UK regulator explainers, following our guides to what Ofcom regulates, what the ICO regulates and what the FCA and PSR regulate.

What legislation does the CMA enforce?

The CMA draws its powers from three principal statutes. The Competition Act 1998 prohibits anti-competitive agreements (the Chapter I prohibition, section 2) and abuse of a dominant market position (the Chapter II prohibition, section 18). The Enterprise Act 2002 provides the merger control regime (Part 3), market investigation powers (Part 4) and the criminal cartel offence (section 188). The DMCCA 2024 adds the digital markets regime and substantially strengthens the CMA’s consumer protection enforcement powers.

The CMA also has a role under the Subsidy Control Act 2022, through its Subsidy Advice Unit, which provides independent advice on the most potentially distortive subsidies granted by UK public authorities.

What are the CMA’s core functions?

The CMA operates across five main areas. First, competition enforcement: investigating and penalising cartels, price-fixing and abuse of dominance under the CA 1998. Second, merger control: reviewing transactions that meet the jurisdictional thresholds (target UK turnover exceeding £100 million or resulting combined share of supply of 25% or more) and blocking or imposing remedies where a merger would result in a substantial lessening of competition. The DMCCA 2024 also introduced a safe harbour: mergers are exempt from CMA scrutiny where each party’s UK turnover is below £10 million. Third, market studies and investigations: examining entire sectors where competition may not be working well, with power to impose binding remedies. Fourth, consumer protection: enforcing consumer law, including the new direct enforcement powers under the DMCCA 2024.

Fifth, digital markets regulation: designating firms with Strategic Market Status and imposing conduct requirements through the Digital Markets Unit.

For telecoms, fintech and digital infrastructure businesses, the CMA’s merger control and market investigation powers are the most frequently encountered. Any acquisition in a concentrated market, whether a mobile operator, a payments firm or a data centre provider, may trigger CMA review.

What penalties can the CMA impose?

The CMA’s penalty powers vary by enforcement area but are substantial. For competition infringements under the CA 1998, section 36 permits financial penalties of up to 10% of an undertaking’s worldwide turnover. The criminal cartel offence under EA 2002 section 188 carries a maximum sentence of five years’ imprisonment and an unlimited fine for individuals (section 190). The CMA can also seek competition disqualification orders against company directors under section 9A of the Company Directors Disqualification Act 1986, disqualifying them for up to 15 years.

The DMCCA 2024 adds new penalty tiers for the digital markets regime. Breach of a conduct requirement imposed on a firm with Strategic Market Status can attract a penalty of up to 10% of worldwide turnover under section 85.

Failure to comply with an investigative requirement can result in a fixed penalty of up to 1% of turnover or a daily penalty of up to 5% of daily turnover (sections 87 and 88). For consumer protection enforcement, the DMCCA has given the CMA power to impose penalties of up to 10% of worldwide turnover or £300,000, whichever is higher.

These are not theoretical ceilings. The CMA has imposed fines totalling hundreds of millions of pounds across competition enforcement cases in recent years, and the new digital markets penalties are designed to be meaningful even for the largest technology firms.

What is the Digital Markets Unit?

The Digital Markets Unit (DMU) is the division within the CMA responsible for the new digital markets regime under the DMCCA 2024, which came into force on 1 January 2025. The DMU can designate firms as having Strategic Market Status (SMS) in respect of specific digital activities where the firm has substantial and entrenched market power and a position of strategic significance. Designation requires that the firm meets a turnover condition (global turnover exceeding £25 billion, or UK turnover exceeding £1 billion).

Once designated, an SMS firm is subject to conduct requirements designed to ensure fair dealing, open choices and trust and transparency. The CMA can also impose pro-competition interventions, which are forward-looking structural or behavioural remedies aimed at opening up competition. The first SMS designations were made in 2025, targeting search services and mobile ecosystems. Conduct requirements consultations followed in early 2026.

This regime matters for businesses that operate on or alongside large digital platforms. Conduct requirements may address issues such as self-preferencing in search results, restrictions on data portability, and unfair contract terms imposed on business users. Any firm that depends on a major platform for distribution or customer access should monitor DMU activity closely.

How does the CMA interact with sector regulators?

The CMA shares concurrent competition enforcement powers with eight sector regulators: Ofcom (communications), Ofgem (energy), Ofwat (water), the ORR (rail), the FCA (financial services), the PSR (payment systems), the CAA (aviation) and the NIAUR (Northern Ireland utilities). Under the Competition Act 1998 (Concurrency) Regulations 2014, these regulators can investigate anti-competitive behaviour in their sectors using the same Chapter I and Chapter II powers as the CMA.

In practice, the CMA and sector regulators consult to determine which body is best placed to investigate a particular case. If a dominant telecoms provider is alleged to be engaging in anti-competitive pricing, both Ofcom and the CMA could in principle investigate, but the concurrency framework requires coordination to avoid duplication. Sector regulators must also consider whether competition law powers are more appropriate than their sector-specific regulatory tools before choosing which route to take, following CMA guidance on concurrent application.

For businesses in regulated sectors, this means that a competition complaint may be investigated by the sector regulator, the CMA, or both in coordination. The Digital Regulation Cooperation Forum (DRCF), which brings together the CMA, ICO, Ofcom and the FCA, adds a further layer of coordination for issues at the intersection of competition, data and digital regulation.

Viewpoint

The DMCCA 2024 has transformed the CMA from a competition enforcer into something closer to a digital markets regulator with economy-wide reach. The combination of SMS conduct requirements, enhanced consumer enforcement powers and the existing merger control and market investigation tools gives the CMA a breadth of intervention that no other UK regulator matches.

For businesses in the sectors where Bratby Law operates, the practical implications are direct. Telecoms and digital infrastructure transactions will continue to face CMA merger scrutiny, and the DMU’s conduct requirements may reshape the commercial terms on which smaller players access dominant platforms. In payments, the concurrent powers shared with the FCA and PSR mean that competition issues in payment systems can be investigated through multiple routes. In our experience advising on transactions in regulated sectors, the CMA’s increasing willingness to intervene early in digital markets and to coordinate with sector regulators means that competition risk assessment is no longer a due diligence afterthought but a front-end transaction consideration.

The companion guides in this series cover what Ofcom regulates, what the ICO regulates and what the FCA and PSR regulate.

Key sources

• Competition Act 1998
• Enterprise Act 2002
• Digital Markets, Competition and Consumers Act 2024
• CMA: About us
• Digital Markets Unit
• CMA guidance on concurrent application to regulated industries
• Subsidy Control Act 2022

Call to action

For advice on CMA merger control, competition risk in regulated sectors or the impact of the digital markets regime on your business, contact Rob Bratby at Bratby Law. Subscribe to our regulatory updates for further analysis.