Whilst the EU Digital Services Act Package slowly unfurls across Europe, promising to leave in its wake greater consumer protection, early insights into the content of the Digital Markets, Competition and Consumer Bill suggest that the UK may be in for a similar legislative agenda. Today, the Government will introduce to Parliament the Digital Markets, Competition and Consumer Bill. For those familiar with the EU Digital Services Act Package (comprising the Digital Markets Act and the Digital Services Act), the announcement of the Bill may incur a sense of déjà vu; as the Bill bears more than a passing resemblance to its European counterpart. Whilst we await the release of the full text, highlights from the announcement of the Bill are set out below.
One of the principal aims of the Bill is the advancement and improvement of consumer protection. Undoubtedly, the landscape of the marketplace has undergone seismic change in recent years as consumers increasingly turn to the internet to purchase goods and services, and globally legislators grapple with how best to police the online marketplace. Although the full scope of the consumer protection provisions proposed by the bill are not yet known, the announcement indicates that the Government has both subscription service providers and fake reviews firmly in its sights:
- Subscription: new rules are to be imposed on providers of subscription services, designed to enhance transparency on the ‘opt-out’ process, including an obligation on providers to contact consumers informing them when a free trial period is coming to an end.
- Fake Reviews: the Bill proposes the tightening of regulation surrounding online reviews, and increased verification processes for those who write them, alongside penalties for those who facilitate the creation of, or themselves create, false reviews.
Alongside measures to bolster consumer protection in the online marketplace, the DMCC also takes aim at digital firms with ‘Strategic Market Status’, in a move no doubt inspired by the European Commission’s ‘Gatekeepers’ initiative. The Digital Markets Unit (DMU), a branch within the Competition and Markets Authority, will take the lead in enforcing the new digital regime once the Bill is passed, bolstered by increased powers afforded to the CMA under the Bill. In the press release accompanying the introduction of the Bill, the Government paints a picture of a tech market characterised by the substantial market share of a few large players, hostile to new entrants and innovation. The Bill aims to change the course of the digital marketplace by placing additional obligations on those firms with Strategic Market Status, the exact content of these additional obligations is, however, yet to be seen.
Increased CMA Powers
As the jurisdiction of the CMA increases under the Bill, so too does its enforcement powers. The Bill proposes a substantial increase in the CMA’s powers including:
- New powers to directly enforce consumer protection law, including the ability to impose penalties of up to 10% of global turnover for a breach, bringing the penalty for a breach of consumer protection law into line with competition law;
- Far ranging powers to set rules and establish codes of conduct for firms with “Strategic Market Status”, a breach of which could result in a fine of up to 10% of global turnover; and
- Further changes to the competition framework as a whole, including updated merger and fine thresholds, and powers aimed at expediting the investigative process.
Whilst the Bill is likely to undergo some change as it passes through the legislative process, early indications suggest that the Bill has the propensity to create significant change in the digital marketplace, and the wider competition regime.