The Digital Markets, Competition and Consumers Act 2024 received Royal Assent in May 2024.  As well as reforms to consumer protection and digital markets regulation, it introduces changes to the competition law regime. What do these changes look like?

Revised investigatory powers for the CMA

The Act provides the Competition and Markets Authority with stronger investigatory powers and enforcement powers across the board.  For example, for competition law, these include being able to carry out dawn raids, having access to electronic documents and data that are offsite (eg at someone’s house, as so many people now work remotely at least part of the time), and requiring information and documents from overseas companies.

Increased fines for failing to cooperate with investigations

The Act increases the maximum fines for failing to cooperate with investigations. The CMA may impose fines of up to 1% of an organisation’s annual global turnover, with additional penalties of up to 5% of daily global turnover for continued non-compliance. The CMA can also impose fines on individuals of up to £30,000 and a daily penalty of £15,000.

The CMA can also impose civil penalties on businesses that breach commitments or undertakings, directions, orders or interim measures. These can be up to 5% of a company’s annual worldwide turnover, plus maximum daily penalties of up to 5% of daily global turnover while non-compliance continues.

Extra-territorial jurisdiction

The Act extends the CMA’s extraterritorial jurisdiction.  This means that it can investigate agreements, decisions, and concerted practices employed outside the UK that are “likely to have an immediate, substantial and foreseeable effect on trade within the UK”.  As mentioned above, the CMA can also require information from overseas companies in certain circumstances.

Other changes to the competition regime

The Competition Appeal Tribunal has jurisdiction to grant declaratory relief and discretion to award exemplary damages (although exemplary damages are not available in collective proceedings).

Merger control

The Act increases the jurisdictional threshold for the CMA to review a UK merger from £100 million from £70 million. 

The CMA also has new powers to review mergers where an acquirer has:

  • an existing share of supply of goods or services of 33% or more in the UK or in a substantial part of the UK, and 
  • an annual UK turnover of £350 million or more where the merger has sufficient connection with the UK. 

This relates to “killer acquisitions” - ie where incumbent firms acquire growing companies to stifle their development and pre-empt future competition,

In addition, there is a smaller merger “safe harbour” which means that the CMA will not be able to investigate mergers between parties with an annual UK turnover under £10 million.

In a late change which was made during the legislative passage of the Act, there are provisions regarding foreign takeovers of newspapers.

More flexibility for the CMA

The Act also gives the CMA a discretion to use its market study and market investigation powers more flexibly as well more flexibility about when to make a market investigation reference under the Enterprise Act 2002 at all. The existing informal fast-track procedure is put on a statutory footing. There is also a mechanism in Schedule 9 to the Act for remedies to be trialled.

General provisions

The Act also makes some general changes, including about investigative assistance to overseas regulators, disclosing information overseas, a duty of expedition on the CMA and sectoral regulators and new powers for the CMA to gather information about motor fuel competition.

When does this all come into force?

Most substantive parts of the Act will come into force following secondary legislation. This was due to be in the autumn of 2024, but timings may be affected by the outcome of the election on 4 July. The CMA has already consulted on guidance about its policy and approach to transparency and disclosure.