The much-anticipated Digital Markets, Competition and Consumers (“DMCC”) Bill has been passed by Parliament and received Royal Assent. The sweeping legislation has been years in the making and introduces a series of landmark reforms to competition and consumer law, as well as ushering in a new digital markets regulation regime. We have previously commented upon the provisions of the Bill here, here, and here. (and our legislation tracker can be found here). In this post, we consider the headline provisions covering the three areas that the new law seeks to address: (1) digital markets, (2) merger control and antitrust rules, and (3) consumer law.

First, the new DMCC Act will introduce a new regulatory regime for digital markets. Under this regime, the new Digital Markets Unit (“DMU”) within the Competition and Markets Authority (“CMA”) will designate organisations as having ‘strategic market status’ (or ‘SMS’) if they have “substantial and entrenched market power” and a “position of strategic significance” in respect of a digital activity. In addition, organisations will have to have a UK nexus and meet minimum thresholds as to their turnover in order to be subject to the new regime. In practice, it is expected that a relatively few number of organisations – most likely large tech companies – will meet the relevant criteria, much like is the case with the Digital Markets Act in the EU. Under the new regime, the DMU will develop tailor-made codes of conduct for firms that fall under its scope and will also be empowered to carry out so called ‘pro-competitive interventions’ (“PCIs”) to address the “root causes” of entrenched market power.

Second, the DMCC Act brings major changes to the UK antitrust and merger control regimes. In addition to increasing the turnover threshold from £70 million to £100 million (as well as creating a new safe harbour provision for mergers where each party’s UK turnover is less than £10 million), the Act introduces a new threshold to target so-called “killer acquisitions”. Now, the CMA will have jurisdiction to review mergers where an acquirer has a UK market share of at least 33% and UK turnover of over £350m, and the target has a UK nexus. The CMA is also granted greater extraterritorial jurisdiction to investigate antitrust infringements in relation to agreements, decisions, and concerted practices implemented outside the UK which are “likely to have an immediate, substantial and foreseeable effect on trade within the United Kingdom”. Underpinning these new provisions are greater investigative powers granted to the CMA in addition to stronger penalties both for those that fail to comply with investigative requirements (up to 1% of annual global turnover) and those that breach commitments, undertakings, directions, orders, or interim measures (up to 5% of annual worldwide turnover).

Third, the DMCC Act introduces overhauls to consumer protection law. Additional measures contained within the Act include those targeted at so-called ‘subscription traps’. Traders will be required, for example, to include pre-contract information, reminder notices, and cancellation periods, and allow consumers to exit the subscription contract in a single communication without having to take any steps which are not reasonably necessary. There are also new rules relating to ‘drip-pricing’ which prohibit consumers being shown an initial price for a product or service only to discover later in the checkout that additional fees (such as for booking or delivery) have been added. Further consumer protection measures are aimed at prohibiting the publishing or commissioning of fake consumer reviews and reducing excessive mark-ups in the secondary ticket market. Again, all of these measures will be backed up by the CMA’s greater enforcement powers granted to it under the Act (including the power to enforce consumer protection laws without the need to go through the courts), as well as its power to impose fines of up to 10% of global group turnover.

We await further detail on when various provisions of the DMCC Act will come into force, following the passing of relevant secondary legislation and the conclusion of various consultations. In the meantime, an extract of the Act can be read here.