Digital Markets, Competition and Consumers Act becomes law

Following the announcement of a date for the general election, the Digital Markets, Competition and Consumers Act (DMCC) rapidly sped through the final stages of parliamentary processes to become law in late May and was published on 3 June 2024.  Ensuring the DMCC was among the bills included in the 'wash up' before Parliament was dissolved has ensured that the legislation received Royal Assent prior to the election.  

The tripartite DMCC introduces wide-ranging landscape reforms to the UK's competition, consumer and digital markets regimes. The CMA's powers across its various functions have been substantially bolstered by the legislation and the CMA is gaining new statutory powers to regulate digital markets.

Key points:

• Digital Markets –The DMCC grants new responsibilities to the CMA to regulate companies with substantial and entrenched market power in digital markets through a new digital markets regime overseen by its Digital Markets Unit (DMU).The DMU, which previously only existed in shadow form in anticipation of the DMCC being passed, will now receive its formal statutory powers. The DMU will have the authority to impose significant penalties for non-compliance with conduct requirements, including fines of up to 10% of the firm’s global turnover.

   

• Competition – The legislation significantly strengthens the CMA's competition enforcement powers.As an example, it extends the territorial scope of the prohibition under Chapter I of the Competition Act 1998 to apply to agreements implemented outside the UK with an effect within the UK.Other changes include imposing a duty to preserve documents where a person knows or suspects that an investigation is, or is likely to be, carried out by the CMA.There are stronger evidence-gathering powers such as the CMA's ability to interview individuals as part of its competition investigations and extending 'seize and sift' powers to dawn raids at domestic premises (until now such powers were only available for raids at business premises).In addition, there are changes to make penalties for procedural infringements even tougher.Various changes are also being made to the market studies and investigations regime, as well as to the CMA's merger control regime.

   

• Consumer - The Act overhauls the UK's consumer protection legislation including changes to enhance consumer rights.Whereas previously the CMA was required to seek enforcement orders from the court, the CMA will now administer a new direct enforcement regime for infringements of the core consumer protection legislation.

For further details, our articles when the DMCC Bill was introduced into Parliament highlight the key changes in each regime:

• Changes to the digital markets regime
• Changes to the competition law regime
• Changes to the consumer law regime

The CMA has been planning carefully for its new powers. On the day the DMCC became law, the CMA issued a consultation on its draft guidance in relation to the new digital markets regime.   

The full suite of consultation materials is available at the CMA's dedicated website. The consultation is open until 12 July 2024. It is expected the new digital markets competition powers will commence as soon as October 2024.