The UK government is expected to publish the new Digital Markets, Competition and Consumer Bill imminently. The new law is set to overhaul UK competition and consumer protection laws.
The Bill implements the government’s digital markets strategy, introducing reforms to consumer protection and competition law, while giving the Digital Markets Unit (DMU) new powers to enforce a new regulatory regime. Reforms are expected to include:
- Significant changes to the Competition and Markets Authority’s (“CMA”) Competition Act 1998 and market investigation powers, such as imposing substantial penalties for non-compliance with market investigation orders.
- Strengthening the UK’s consumer law enforcement regime by enabling the CMA to directly enforce consumer law through the imposition of fines.
- Amending UK consumer laws to tackle specific issues such as ‘subscription traps’, fake reviews and greater protections for savings schemes.
The new regime is set to apply to digital firms with ‘strategic market status’ (SMS) in the UK. While the EU’s Digital Markets Act will apply to certain ‘gatekeeper’ digital firms, the UK regime is intended to be more nuanced in how SMS firms are designated and the obligations placed on them. The government has indicated:
- Only firms found to have “substantial and entrenched” market power in at least one digital activity will be designated.
- The DMU will also be required to establish a UK nexus.
- There will be a minimum revenue threshold to make clear that smaller companies are not in scope of the regime.
Businesses based or active in the UK are expected to be impacted in varying degrees, in particular, in relation to sales and marketing given the anticipated new powers of the CMA to impose substantial fines for consumer law breaches.
The Bill is set to be brought forward Spring 2023.