Traditional competition law moves too slowly for fast-moving digital platforms. By the time a case concludes, the market has often already changed. In 2025, the UK gave its competition regulator new powers to step in earlier, setting specific rules for the most powerful digital firms.

The dilemma

By the early 2020s, competition regulators in major economies had reached the same conclusion. The traditional way of enforcing competition law, by investigating a company after it had already harmed competition, was too slow for digital platforms. These markets move quickly. By the time a full investigation was finished, often taking years, the market had usually already changed, and the dominant firm had become even harder to dislodge. The usual remedies, which asked a company to change its behaviour after the fact, rarely did enough to bring real competition back.

The regulatory gap

What regulators needed was a set of tools that let them act earlier. They needed to be able to identify the firms that held entrenched power in a particular digital activity, set specific rules for those firms to address known problems, and step in before competitive damage was done rather than only after. The European Union was building exactly this through its Digital Markets Act. The UK wanted its own version, suited to its own legal system.

The approach

The Digital Markets, Competition and Consumers Act, passed in 2024, gave the UK's Competition and Markets Authority a set of new powers. The regulator can now designate a firm as having "Strategic Market Status" in a specific digital activity, which means the firm holds substantial and entrenched market power there. Once a firm has that status, the regulator can set tailored rules for how it must behave, and can take what the Act calls "pro-competition interventions" where the evidence supports them. The Act also strengthened the regulator's power to protect consumers directly, including the ability to fine companies up to 10% of their worldwide revenue for breaking consumer law. The main rules on digital markets came into force on 1 January 2025, and the main consumer protection rules on 6 April 2025.

Results achieved

The Competition and Markets Authority began using its new powers early in 2025. It opened investigations into whether Google should be designated for its search and search advertising business, and into the mobile platforms run by Apple and Google. A key feature of the system is that the rules attached to each designation are developed case by case, through consultation. This means the obligations are tailored to each firm and each activity, rather than applied as a single uniform set of rules to everyone.

Two limits are worth noting. The system is new, and it is still unproven. The central question, whether setting rules firm by firm can move faster than traditional competition law without becoming sloppy, has not yet been answered. The early designations have produced detailed engagement from the companies involved. Whether the resulting rules actually improve competition will take longer to see.

The transferable lesson

Setting rules firm by firm is more flexible than applying one uniform set of rules to everyone, but it is also more demanding to run. Each designation is effectively its own investigation, which requires significant staff, expertise, and time. The UK has chosen this approach over the more uniform, predictable model of the EU's Digital Markets Act, on the assumption that its regulator can build the capacity to handle the workload. Other countries considering the same approach should ask a hard question first: does our competition regulator have the staff and expertise to run case-by-case investigations at this scale, or can it realistically build them?