The CMA and Ofcom have published a joint statement that sets out their shared views on the interactions between online safety and competition in digital markets.
The statement points out that consumers benefit significantly from online services, but such services have the potential to create harm where the competition they face is weak, or they do not invest enough in keeping users safe from harmful content. The statement also explores the interactions between competition and safety online. The aim is to ensure that the CMA and Ofcom take a coherent approach when dealing with these concerns using their existing powers and under new duties.
How algorithms, data and user interfaces shape consumer engagement with online services is key to understanding some of the competition and user safety issues currently seen. This creates significant scope for regulators to share knowledge and ensure a joined-up approach where interventions target these service features. However, the interactions between safety and competition can be even more direct. This is particularly the case for those platforms that govern the rules by which content reaches users and people connect with others, and which have gained unassailable positions through the data or network economies in their markets.
The regulators say that this can create opportunities for interventions that target these platforms to improve outcomes across both regimes. Competition interventions can strengthen incentives for these platforms to improve safety by making it easier for consumers and advertisers to switch in search of better protections. Where online safety interventions clarify the requirements for firms, this can give consumers greater confidence to switch from larger incumbents to new entrants or smaller competitors. Ofcom and the CMA say that considering these synergies will allow them to shape interventions in both areas to maximise the benefits to UK consumers.
However, they also point out that the effects of interventions across these policy areas are not always complementary. As online safety and competition regimes have distinct policy aims, there can be occasions where interventions for one objective may have an adverse impact on outcomes for the other. It is important that such impacts are identified and mitigated. For example, interventions to improve online safety may make it harder for new firms to enter and compete with large and established services. Where such unintended effects are unavoidable, regulators will need to be transparent about trade-offs and ensure that the impact is proportionate to the problems they are targeting.
Finally, where platforms act as gateways for other businesses to reach customers, they can take on a ‘quasi-regulatory’ role. In some cases, these gateway platforms may impose safety standards on other businesses that restrict competition more than is needed. Clear online safety standards and collaboration among regulators can ensure that firms meet safety requirements in a way which does not distort competition unnecessarily.
The statement describes why safety and competition concerns arise online and why these issues can sometimes interact in digital markets. It also explains how competition and online safety interventions may interact and describes the implications for how the CMA and Ofcom approach policy design. Finally it describes how the CMA and Ofcom will take account of these interactions as they collaborate and regulate digital markets.
The CMA and Ofcom say that they will continue to engage proactively on these important issues, including through the work of the Digital Regulation Cooperation Forum.
