It may not be as hotly anticipated as Lewis Silkin’s annual tech predictions (keep a look out for our 2024 article coming soon…), but the CMA’s Technology Horizon Scanning Function has released its report on the top 10 digital market trends with implications for competition and consumers over the next five years and beyond. 

We’ve summarised these trends:

1. Rapid and widespread deployment of AI Foundation Models: The report explores how the deployment of foundation models (FMs) could result in “harms to competition and consumers if larger firms are able to leverage access to key inputs for FM development and if they are able to leverage their positions in downstream markets where FMs are deployed”.
2. Increasing technology convergence enabling the creation of new and disruptive products and services: Technology convergence – where two or more technologies are combined – may become more pronounced with the introduction of technologies like AI. The CMA identifies “potential risks that regulators may need to be aware of, such as market disruption or the ability of some firms to leverage existing capabilities, though we found limited information on competition and consumer elements from the literature during our research”.
3. Digital platforms increasingly integrating additional services: Whilst integration on platforms may be more convenient for consumers, the report warns that “this trend could also raise potential concerns from consumer lock-in and competition, to data privacy”.
4. Digital firms continuing to raise prices for Application Programming Interface access: If API prices increase, this may affect access to certain features for users and developers. The CMA advises that “[m]aintaining a balance between accessibility and innovation is likely to be increasingly important”.
5. Growing incumbent and new entrant activity in the markets for central processing units, graphics processing units and AI accelerators: Whilst new entrants may not necessarily disrupt these markets, “if these developments result in increased competition, the result may be cheaper and more innovative microchips, benefitting the entire digital economy”.
6. Uneven interoperability improvements which, however, remain an important driver of market outcomes: Interoperability in digital markets has improved as a result of regulatory intervention and industry initiatives and, the report advises, this is “a powerful force in preventing market ‘tipping’ and preventing the leveraging of vertically integrated platforms into new markets”.
7. Larger technology firms continuing to expand into new markets: The CMA’s report focuses on HealthTech in which, it says, there are “opportunities for new technologies or treatments … that may be enabled by the involvement of larger firms who might have access to data, technologies, or computing power”.
8. Increased application of digital twins: According to the IBM definition, a digital twin is “a virtual representation of an object or system that spans its lifecycle, is updated from real-time data, and uses simulation, machine learning and reasoning to help decision making”. In its report, the CMA observes that, whilst the use of digital twins can be beneficial for consumers, it can also cause issues of “data privacy, potential for misuse, and limited interoperability”.
9. Increased development and usage of open-source software and hardware: The use of open source has revolutionised the digital world and continues its effect with the development of open source hardware. However, according to the CMA, “there remain some concerns over how open-source functions, particularly in sustaining how open-source projects are maintained, and in ensuring they are fairly advertised”.
10. Consumers continuing to want personalised experiences, but remaining conscious of how their data is used: As a consumer, its great when brands can provide a more personalised experience. However, many have concerns when their data is used in such a targeted way. The CMA remarks that “[i]n future, experiences, products, and services could be increasingly personalised, or conversely this trend could stagnate or slow if concerns about privacy and data use become more prevalent. Developments such as privacy enhancing technologies could potentially help balance efficiencies, competition, and privacy”.