The wait is over: UK Digital Markets, Competition and Consumers Bill introduced to Parliament
After months of waiting, the UK Government has now introduced into Parliament the text of the hotly anticipated Digital Markets, Competition and Consumers Bill.
Sarah Cardell, CEO of the UK Competition and Markets Authority, has described this as a “flagship bill” which has the potential to be a “watershed moment”, expanding the CMA’s consumer law enforcement powers and introducing a new regulatory regime for digital markets in the UK. The Bill now starts its legislative process and, subject to the parliamentary timetable, is expected to receive Royal Assent next Spring and come into force in Autumn 2024.
The Bill introduces significant reforms to the UK’s consumer, digital markets, and competition regimes in four main ways:
- Significantly expands the CMA’s enforcement of UK consumer protection laws: the Bill introduces an administrative enforcement model for consumer law enforcement, which allows the CMA (rather than the courts) to determine directly whether consumer laws have been breached and impose penalties of up to 10% of global turnover (mirroring, for the first time, the CMA’s competition-law based enforcement approach and statutory penalties).
- Establishes an ex ante regulatory framework for digital markets: the CMA’s Digital Markets Unit (DMU) will be granted powers to enforce a new ex ante regulatory regime for firms in digital markets that have “strategic market status” (SMS), with three key pillars: (i) enforceable conduct requirements based on the objectives of fair trading, open choices and trust and transparency; (ii) targeted pro-competitive interventions to get to the heart of (SMS firms’ perceived) market power; and (iii) a mandatory and suspensory merger reporting requirement applying to SMS firms for all deals meeting certain (lower) thresholds.
- Introduces a new merger threshold, bringing more deals in scope of the CMA’s review: transactions involving any party with a share of supply >33% and turnover >£350m in the UK will be subject to CMA review, further widening its already expansive jurisdictional reach.
- Enhances the CMA’s investigative and enforcement powers: the CMA’s enforcement powers across the entirety of its competition and consumer law toolkit will be bolstered, with additional powers to gather evidence, impose higher penalties for failure to comply with investigative measures (e.g. failing to comply with information requests or providing false or misleading information), as well as new turnover-based penalties for non-compliance with CMA orders or undertakings and commitments accepted by the CMA.
These are the most significant reforms to UK competition and consumer laws since the CMA was established in 2014, and they will come into force soon. Businesses should start planning now.
The attached briefing sets out five key themes firms should be thinking about when navigating their way through the Bill and the proposed reforms.