Digital Markets, Competition and Consumers Act 2024

Over a year after it was first introduced in the House of Commons, the UK Digital Markets, Competition and Consumers Bill received Royal Assent on 24 May 2024. The DMCC Act introduces widespread changes to competition law and consumer law enforcement in the UK, as well as a new regime regulating designated Big Tech companies.

The DMCC Act establishes a new digital markets regime which provides the CMA with the power to designate firms as having SMS. Once designated, firms are subject to tailored codes of conduct and a specific merger reporting regime. In addition, the CMA has the power to conduct pro-competition investigations.

The DMCC Act also introduces wide-ranging changes to the CMA's Competition Act 1998 powers, including new evidence gathering powers (such as seize and sift powers during dawn raids at domestic premises) and additional powers to fine companies up to 5% of their turnover for failure to comply with investigatory measures, commitments, interim measures or CMA directions.

In addition, the DMCC Act gives the CMA more flexibility when conducting market studies and investigations, including the ability to revoke, vary or supplement remedies and new powers to sanction companies up to 5% of global turnover for failing to comply with undertakings or market investigation orders.

The DMCC Act introduces significant changes to the UK's voluntary merger control regime. The reforms enhance the CMA's jurisdiction to review transactions, in particular so-called "killer acquisitions", while also giving the CMA and merger parties more flexibility during the investigative process.

The DMCC Act gives the CMA the power to directly enforce consumer protection laws through administrative enforcement in a manner similar to its Competition Act powers. As a result, the CMA has the power to fine companies up to 10% of global turnover for consumer law breaches, as well as to award compensation to consumers. In addition, the DMCC Act also introduces new substantive protections for consumers, in particular in relation to fake reviews, drip pricing and subscription contracts, as well as amendments to existing protections, and makes it easier for the government to make further changes and introduce additional protections in the future.

The DMCC Act gives the CMA enhanced powers to fine companies which fail to comply with CMA investigations. In July 2024, the CMA published a consultation on updated guidance on administrative penalties which covers breaching two categories of requirements: investigative requirements and remedies requirements (including commitments, undertakings and orders). The draft statement proposes to apply an "in the round" approach to the assessment of the appropriate administrative penalty.

In recent years, the EU and UK have both introduced new regimes regulating Big Tech companies with the EU Digital Markets Act (DMA) and the DMCC Act in the UK. While the regimes pursue the same objective, the EU and UK have taken notably different approaches. Both regimes involve the designation of digital companies meeting certain criteria and empower the relevant authority to impose significant penalties for breaching the DMA or the DMCC Act.