Part 1: Digital Markets Enforcement of conduct requirements Section 29: Countervailing benefits exemption
Subsection (1) provides that the CMA must close a conduct investigation where representations made by the designated undertaking under investigation lead the CMA to consider that overall the conduct results in benefits for users that outweigh the negative consequences for competition. There are similarities with the approach of section 9 of the Competition Act 1998 (agreements exempt from the Chapter 1 prohibition on anti-competitive agreements) and the relevant customer benefit test under section 134(7) of the Enterprise Act 2002.
	Subsection (2) sets out the criteria for the exemption. The benefits need to be for the users or potential users of the digital activity to which the conduct investigation relates, and must outweigh any actual or potential harm to competition. Some examples of benefits may include protecting user security or privacy, lower prices, higher quality goods or services, or greater innovation in relation to goods or services. It must not be possible to realise the benefits without the conduct. This means the CMA must be satisfied that there is no other reasonable or practical way for the designated undertaking to achieve the same benefits with less anti-competitive effect. The conduct must also be proportionate to the benefits, and must not eliminate or prevent effective competition, which means that the outcome must be that which is the least disruptive to competition.
	Subsection (3) explains that where the exemption applies, the designated undertaking is to be treated as if the CMA had found that it had not breached the relevant conduct requirement.
	In deciding whether the exemption applies, the CMA can consider evidence submitted by the undertaking under investigation, evidence submitted by third parties and evidence it has gathered itself. However it is incumbent on the designated undertaking to make representations to the CMA to establish that the exemption applies.
	Example of a designated undertaking’s claim of countervailing benefits
A conduct requirement is imposed on a designated undertaking requiring users to be allowed to make their own choice between internet browsers on their phone operating system (rather than using the undertaking’s own default browser). If the undertaking rolled out an update to its operating system which changed the default internet browser back to the undertaking’s own browser, the CMA could investigate the undertaking for breaching the conduct requirement. The undertaking could claim that the countervailing benefits exemption is engaged on the basis that the change benefits consumers because it is needed to apply critical security patches. The undertaking would need to demonstrate that the requirements of the countervailing benefits exemption are met, and the CMA would then close the conduct investigation in relation to the conduct requirement on default options.