London diverges further from Brussels with its Digital Markets, Competition and Consumers Bill
By Keisha Bullock-Singh, Junior Consultant
As part of its efforts to bring digital to the forefront – note the creation of the Department for Science, Innovation and Technology in February – the Government published its Digital Markets, Competition and Consumers (DMCC) Bill yesterday. The objective of the long-awaited Bill, now at Second Reading stage in the House of Commons, is to promote growth in the UK economy by ensuring free and vigorous competition amongst businesses.
The Bill notably provides the Competition and Markets Authority’s (CMA) Digital Markets Unit with significant powers to impose a new code of conduct on large tech companies and fine them up to 10% of global annual turnover, in response to non-compliance. This statutory power – which comes two years after the creation of the Digital Markets Unit – will allow the Government to effectively regulate business dominance in the UK and ensure growth is able to thrive in what Prime Minister Rishi Sunak wants to be “the most innovative economy in the world”.
The DMCC Bill will also assist the CMA when conducting competition investigations, with increased investigative and enforcement powers. Changes to the competition framework, including updated merger and fine thresholds, will make it easier for the regulator to take action against mergers which harm UK consumers and businesses.
Aside from ensuring a fair market for growth, the Bill will empower the CMA to decide when consumer law has been broken, rather than having to take each case to court. This will promptly protect against unethical practices and additionally, ensure that fair-dealing businesses can compete without being disadvantaged by those who break the rules.
The Bill, which is expected to become law next year, highlights the UK’s desire to distinguish itself from EU policy post-Brexit, with Business Minister Kevin Hollinrake stating that the nation is using “freedoms” gained by leaving the EU to address competition issues in a way that is best for the UK. The DMCC Bill differs from its EU counterpart – the Digital Markets Act – as it tailors codes of conduct for each tech giant with ‘Strategic Market Status’, in contrast to the European legislation which sets out a strict list of dos and don’ts for Big Tech platforms. Comparing the two, Hollinrake described the Digital Markets Act as risking “unnecessary regulatory burdens for firms”, in contrast to the UK’s “flexible and principles based” legislation.
Another challenge for Big Tech is that the Bill requires platforms to pay publishers for the news, as was previously ordered in Australia. In 2021, Google and Facebook paid Australian media companies around A$200 million as a result of the country’s News Media Bargaining Code, with a similar requirement in the UK expected to cost Big Tech £170 million per year. Big Tech, although not opposed to paying for news content, has been resistant to being required to pay for it on their main platforms, such as Google Search, concerned that it would set a precedent globally: which increasingly seems to be the case. Although this element of the DMCC Bill will be met with disdain by some including free-market think tank the Institute of Economic Affairs, which warned against implementing Australia’s approach in the UK, others such as the News Media Association have welcomed the legislation, saying it will “level the playing field”.
Further details surrounding the DMCC Bill will be revealed in the coming weeks and months, as it progresses through parliamentary scrutiny and Big Tech will undoubtedly have a hand to play in the final version. While the DMCC Bill can increase competition within the sector and benefit consumers, any business that offers a subscription model to consumers will need to keep a close eye on the Bill as it passes through Parliament, as its scope can be far-reaching indeed.