The UK government has finally introduced the Digital Markets, Consumer and Competition Bill to Parliament.
The Bill has three main areas of focus:
- digital markets
- introducing new consumer protection and enforcement laws, and
- competition law reform.
We have written about the government's consultations on consumer law reform - the key areas are regulating subscription contracts and dealing with fake reviews.
In addition, the CMA will have more powers to deal directly with consumer law infringements, including a power itself to issue fines, without going to court first, and to compensate consumers. Fines will be up to 10% of global turnover. The Bill also contains provisions about alternative dispute resolution (ADR) and would put the CMA's Digital Markets Unit (DMU) on a statutory footing.
Large businesses, with substantial and entrenched market power, who are in a position of strategic significance, may be designated by the DMU with "Strategic Market Status" in respect of a digital activity and will be subject to a new regime. There is a turnover threshold, namely a global turnover above £25bn, or UK turnover above £1bn. This regime can lead to conduct requirements, such as trading on fair and reasonable terms, and using data fairly.
Finally, the Bill also contains competition law provisions. The CMA will have enhanced investigative and enforcement powers and there will be changes to the competition framework – including updated merger and fine thresholds.
The CMA says that the new measures will come into effect as soon as possible following parliamentary approval, subject to secondary legislation and the publication of guidance.
The new Bill is expected to repeal the "Consumer Protection from Unfair Trading Regulations 2008" (CPRs/CPUT), but the new Bill re-states those rules... so it's a question of 'the consumer protection regulations are dead, long live consumer protection regulations'. However, it does include some enhancements, for example in relation to subscription services.
Watch this space for more analysis of the Bill in the coming days!
Business and Trade Minister Kevin Hollinrake said: "Smartphones and online shopping have profoundly changed the landscape for businesses, consumers and the foundations of a modern thriving economy, which now lie in strong consumer choice, confidence and competition. From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap - consumers deserve better. The new laws we’re delivering today will empower the CMA to directly enforce consumer law, strengthen competition in digital markets and ensure that people across the country keep hold of their hard-earned cash."