November 23, 2023
The DMCC proposes several provisions to strengthen competition and consumer law in the UK. On the competition side, for example, the DMCC proposes to address what the Government considers to be the far-reaching powers of a small number of tech companies. The Competition and Markets Authority (“CMA”) would be able to designate certain firms as having Strategic Market Status (“SMS”) in the UK where they meet specific market turnover thresholds and certain other conditions such as having entrenched market power and a position of strategic significance in respect of a digital activity. Companies designated as having SMS will be subject to specific rules tailored by the CMS to the company (e.g. preventing tying or bundling) and pro-competition interventions enabling the CMA to implement measures that address the root causes of entrenched market power that stem from factors other than conduct (e.g. harms flowing from network effects). Such interventions could include requiring the undertaking to facilitate interoperability, data mobility etc. Penalties for breach will include fines of up to 10% of global turnover.
On the consumer side, the DMCC proposes, amongst other things, to revoke the Consumer Protection from Unfair Trading Regulations 2008 and to restate those Regulations within the DMCC. In September 2023, the Government consulted on whether changes to UK law should be made via the DMCC to address unfair commercial practices associated with drip pricing (where consumers are shown an initial price for a product or service online and additional fees (e.g. booking or delivery fees) are shown only later during the checkout process) and fake online reviews.
To address what are sometimes referred to as “subscription traps”, the DMCC proposes a number of requirements for traders including in relation to pre-contract information, reminder notices, cancellation periods and allowing consumers to exit the subscription contract in a single communication and without having to take any steps which are not reasonably necessary.
On 15 November 2023, a large number of amendments to the DMCC were published. These include the introduction of class actions for breach of the provisions of the DMCC relating to unfair commercial practices and subscription contracts, and amendments relating to litigation funding for competition class actions. The government’s amendments also maintain the Judicial Review standard for appeals of CMA decisions except fines for which a merit-based appeals system will apply. The amendments were debated on 20 November 2023 during the DMCC’s report stage in the House of Commons. The following day, these amendments were passed during the DMCC’s third reading in the Commons. The DMCC will now proceed to the House of Lords for consideration.