UK government publishes Digital Markets, Competition and Consumers Bill

The new rules in the Bill will allow the Competition and Markets Authority (CMA) to decide when consumer law has been broken, rather than having to take each case to court. While the CMA is already able to take enforcement action against businesses that use unfair practices to dupe people into handing over their money – such as though fake reviews, subscription traps and pressure selling – the Bill will also allow the regulator to fine businesses which do break the law up to 10% of their global turnover.

The Bill establishes a new, targeted regime for digital markets that offer the latest products and services, overseen by the Digital Markets Unit (DMU). Firms with substantial and entrenched market power in at least one digital activity, providing them with a strategic position, will be designated with ‘strategic market status’ (SMS) by the DMU and will be subject to the new regime. A threshold will apply meaning that only firms with a global turnover above £25bn, or UK turnover above £1bn, will be in scope.

Changes to the competition framework, including updated merger and fine thresholds, in the Bill will also make it easier for the CMA to take action against mergers which harm UK consumers and businesses.

Alan Davis of Pinsent Masons welcomed the publication of the DMCC Bill. He said: “This is a long-awaited and landmark piece of legislation that will help bring legal clarity for tech companies on how the DMU will regulate digital markets in the UK”.

“In addition, the DMCC Bill will significantly strengthen the CMA’s powers to enforce competition and consumer law, giving the authority a more powerful range of tools to pursue its enforcement objectives. However, these changes may also increase the compliance burden and risks faced by businesses active in the UK,” he said.