UK government set to publish Digital Markets, Competition and Consumer Bill

The Bill, which will be likely to result in important reforms to consumer protection and competition law, will also give the Digital Markets Unit (DMU) legislative powers to enforce a new regulatory regime. That regime will apply to digital firms that are designated as having ‘strategic market status’ (SMS) in the UK – in a similar way to how the EU’s Digital Markets Act will apply to certain ‘gatekeeper’ digital firms. The UK regime, however, is intended to be more nuanced than the EU regime in terms of how SMS firms are designated and the specific obligations they will have to comply with.

Competition law expert Alan Davis of Pinsent Masons said: “The UK government initially announced that the Bill would be introduced in draft form only, and thus subject to further stakeholder consultation, however it now appears that a formal Bill will be brought forward during the current parliamentary session. Consequently, the Bill could now be published in the coming days or weeks, enacted by May 2023, and come into force later that year. Current expectations are that the new DMU regime and reforms to competition and consumer protection laws could be effective as early as October 2023.”

“While the single biggest change resulting from the Bill comprises the establishment of a legislative basis for the new digital markets regime that will be enforced by the DMU, in practice the new regime is expected to only apply to a small number of large digital firms of similar type as ‘gatekeepers’ under the EU Digital Markets Act. Importantly, the Bill will also bring about major reforms to consumer protection law – substantially strengthening the CMA’s enforcement powers to mirror those it already uses in antitrust cases – as well as important changes to merger control and competition rules,” Davis said.

His comments came after the UK chancellor used his autumn statement (70 pages / 5.94MB PDF) on November 17 to announce that the government would bring forward the Bill in the third parliamentary session to provide new powers to the DMU, a department inside the Competition and Markets Authority (CMA). Jeremy Hunt said the Bill, once enacted, would “tackle anti-competitive practice in digital markets” and provide consumers with higher quality products and greater choice.

Competition law expert Angelique Bret of Pinsent Masons said: “The Bill heralds the most significant reform of UK competition and consumer protection laws in years, and will impact every business based or active in the UK to varying degrees. Businesses should look out for public consultations on new guidance concerning the operation of the DMU regime, as well as any revised CMA guidance relating to consumer protection, merger control, and competition law. In particular, businesses should be reviewing their approach to sales and marketing given the expected new powers of the CMA to impose significant fines in relation to consumer law breaches.”