On 25 April 2023, the Digital Markets, Competition and Consumers Bill (the Bill) was introduced by the UK Government. Now at the ‘committee stage’, it will undergo a line-by-line examination which is set to be completed by 18 July 2023.
The Bill aims to “improve consumer protection, regulate digital markets and strengthen competition enforcement powers”. It will have wide ranging implications for both dominant players and smaller outfits by creating new laws and by amending existing legislation, including the Competition Act 1998 and the Consumer Protection From Unfair Trading Regulations 2008.
We’ve set out a summary of the some of the headline changes below.
Summary of the Bill
Pro-competition Regime for Digital Markets
The regime will be enforced by the Digital Markets Unit (DMU), sitting within the Competition and Markets Authority (CMA). The DMU will target designated Strategic Market Status (SMS) firms - i.e. those that exert significant control over digital markets - and will have the authority to:
(1) set conduct requirements for individual SMS firms, to manage the effects of market power and ensure markets are open to competition and innovation; and
(2) make pro-competition interventions to tackle the sources of SMS firms’ market powers and the adverse impacts those powers can have on competition.
The Bill is designed to deliver competition reforms to form a level playing field for businesses, with the aim that innovative and customer-focused businesses are rewarded with increased market share and businesses using unfair practices are dealt with efficiently by the regulator. The Bill achieves this by bringing together a string of reforms to the CMA’s competition tools.
Strengthening Consumer Enforcement and Dispute Resolution
The Bill strengthens enforcement of consumer protection law and improves the quality of dispute resolution outside of courts. It will boost the CMA’s toolkit of corrective measures available against non-compliant traders – including financial penalties of up to 10% of turnover - and deliver a more efficient enforcement process.
Enhancing Consumer Rights
The Bill considers the current developing online marketplace and evolving consumer behaviours by introducing brand new consumer rights to prevent practices that interfere with consumer choice and improve the playing field for law abiding businesses.
The Bill focuses on subscription traps and fake online reviews. Subscription traps can often make it less attractive for consumers to switch from one provider to another, resulting in limitation of consumer choice. Difficult terms and conditions and unclear cancellation rights are being blamed – with the government estimating that consumers spend more than £1bn a year on subscriptions they don’t want. Similarly, fake reviews and false information can deter consumers from outwardly searching for better deals in the wider market.
Notably though, the Bill does not put in place any specific measures to tackle ‘professional’ ticket touters that plague the live music industry, despite recommendations from the CMA to do just that.