A changing antitrust landscape under the Digital Markets, Competition and Consumers Bill

The UK government has recently introduced the Digital Markets, Competition and Consumers Bill (the ‘Bill’).

The Bill aims to promote fair competition and address some of the challenges faced by consumers in digital markets. The proposed legislation includes several significant reforms to the UK competition law and merger control regimes.

Strategic market status

The Bill provides the Digital Markets Unit (‘DMU’) within the Competition and Markets Authority (‘CMA’) with statutory powers to oversee a new regulatory regime for digital markets and implement pro-competitive interventions where necessary. Companies involved in digital activities with a global turnover above £25bn (or UK turnover above £1bn) may be designated as having ‘Strategic Market Status’ by the DMU and may be subject to additional conduct and reporting requirements.

Merger control

The Bill also proposes changes to the UK merger control thresholds, increasing the target's UK turnover threshold from £70m to £100m. It also introduces an exemption for transactions where each party’s UK turnover does not exceed £10m. These adjustments are expected to reduce the number of transactions that require investigation and streamline the merger process for smaller deals.

The Bill also grants the CMA jurisdiction to review ‘killer acquisition’ transactions where one party has a share of supply of at least 33% and UK turnover over £350 million (even if this would not meet the other turnover thresholds).

Investigatory and enforcement powers

The Bill provides the CMA with stronger investigative powers. For example, when carrying out an investigation, the CMA will be able to compel interviews from any individual (not just those who are connected to the investigation). In addition, the CMA will be able to impose penalties of up to 1% of a business’s annual turnover for failing to comply with a CMA investigation measure (including for failing to respond to/ comply with information requests).In relation to market investigations, the CMA will have greater flexibility in defining their scope. The CMA will also be able to accept binding undertakings, trial remedies, and amend remedies if adverse effects on competition occur.

Consumer protection

The Bill also introduces new rules for subscription contracts and addresses issues such as fake reviews. It grants the government the authority to modify the list of unfair practices and gives the CMA direct enforcement powers, with the ability to fine businesses in breach of consumer law up to 10% of their worldwide turnover.

The Bill has not yet been enacted and still requires approval from both Houses of Parliament. While there is a possibility of some changes, the core principles of the Bill are expected to remain intact, and it is likely to become law later this year or in early 2024.

For more information on the upcoming changes, or for any advice in relation to these updates, please get in touch with our Competition Law team.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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