May 22, 2023
The Public Bill Committee is now accepting written evidence on the Digital Markets, Competition and Consumer Bill from anyone with relevant expertise and experience or a special interest in the Bill.
The Committee advises that submissions should be sent as soon as possible to ensure it is taken into consideration. The Committee is expected to hold its first sitting on 13 June 2023 and is scheduled to report by 18 July 2023.
The Committee explains that the Bill consists of six parts and 26 schedules. The Bill can be seen as covering two large topics: digital markets and proposed competition law reforms (Parts 1 and 2); and proposed reforms of consumer law enforcement and new consumer rights (Parts 3 and 4).
A key focus of the Bill is the Competition and Markets Authority (CMA). The proposals in Part 1 of the Bill, dealing with digital markets, would seek to:
- empower the CMA to “designate” businesses (known as “designated undertakings”) that are very powerful in particular digital activities, giving them strategic market status in relation to those activities;
- ensure that designated undertakings comply with rules on how they treat consumers and other businesses in relation to the activities for which they have strategic market status;
- give the CMA powers to address the root causes of competition issues in digital markets;
- require designated undertakings to be more transparent about mergers which pose risks to competition;
- allow the CMA to enforce obligations on designated undertakings and impose penalties including fines of up to 10% of a firm’s global turnover for breaches; and
- empower the CMA to resolve payment-related breaches of conduct requirements to deal on fair and reasonable terms with third parties, through a “Final Offer Mechanism” as a “backstop” enforcement tool.
Part 2 would reform aspects of competition law by amending existing UK law on merger control, market inquiries and the cartel offence. The Bill would also make amendments to enhance the investigative and enforcement powers for the UK’s competition regime.
Part 3 would create two separate regimes for the civil enforcement of consumer protection law to protect the “collective interests” of consumers:
- a court-based regime which would simplify and enhance the court enforcement procedure currently provided by Part 8 of the Enterprise Act 2002; courts would have the power to impose monetary penalties on traders who breach consumer laws or do not comply with an undertaking; and
- a direct enforcement regime administered by the CMA; the CMA would be given new powers in respect of infringements of certain consumer protection laws, breach of undertakings and non-compliance with CMA directions; it would be empowered to directly enforce consumer law through the imposition of monetary penalties.
Part 4 would:
- revoke the Consumer Protection from Unfair Trading Regulations 2008 (retained EU law) and recreate their effect, with minor amendments, prohibiting unfair commercial practices in business to consumer relationships; this would encompass misleading actions, omissions or aggressive practices relating to the marketing and sale of products to consumers; the 2008 Regulations contain a list of specific banned practices, that are automatically considered unfair; the Bill would largely replicate this list and create a power to make regulations that could add to it;
- tackle “subscription traps” by introducing new rules to impose duties on traders, including to give specific pre-contract information to consumers, send reminders to consumers before a contract rolls over or auto-renews into a new term, and ensure that consumers have a straight-forward, cost-effective, and timely mechanism to terminate the subscription contract;
- give new protections to consumers who make advance payments to consumer saving scheme contracts (e.g. Christmas saving clubs); the Bill would require these businesses to protect payments via a trust arrangement or insurance and give prescribed information to consumers about how their payments are protected; and
- prohibit alternative dispute resolution (ADR) procedures for consumer contracts where the provider is not accredited nor exempt; the Bill makes provision for accreditation and exception, related requirements, and enforcement.
The Bill’s competition and consumer provisions would extend to the whole of the UK. To read the Committee’s press release in full and for information on how to submit evidence, click here.